Discover the latest money-saving tips for Australians | RateCity

• Preparing a budget
  
  If you want to save some money, a good starting point could be finding out where you are spending it. You could simply write down your expenses on a piece of paper or use an app like MoneySmart’s Budget Planner to work out where your money is going and identify areas where you can score some savings.
  
  Once you optimise your budget by cutting down unnecessary items, you are likely to save some money that can go towards building your nest egg.
  
  
• Using a high interest savings account
  
  It’s possible to grow your savings faster by parking your money in a high interest savings account. Even though savings accounts don’t pay a very high interest rate, they help you get into the habit of saving by offering features like rounding up your change or setting up systematic savings.
  
  Most savings accounts charge you a small fee for withdrawing money from the account to keep you from using your savings unless it’s absolutely necessary. If you consider this option, be sure to compare savings accounts to find an account that suits your saving style.
  
  
• Using a mortgage offset account
  
  If you have a mortgage on your house, saving your money in a 100 per cent offset account could help you reduce the interest payable on your home loan and grow your savings in an account with zero or little fees or conditions.
  
  
• The bucket strategy
  
  One of the popular saving strategies online, Barefoot Investor’s Bucket Method, requires you to divide your money into three buckets - one for expenses and some splurging, another for building an emergency fund, and the third for compounding your wealth. While this sounds simplistic, dividing your money into different heads could help you build financial discipline and grow your savings faster.
  
  
• Using cashback sites for shopping
  
  Nobody minds some free money, right? Using cashback sites for shopping could help you pocket some money for free, adding to your savings effortlessly. Cashrewards, ShopBack, and Kickback are some of the popular names but there are many more cashback sites you can find for your shopping needs. There’s also Boost Your Super that sends your cash rewards directly to your Super instead of your bank account.
  

You can pick a savings account based on your convenience and whether you can truly leave a sum of money untouched for a while. For instance, a conditional savings account can, as the name suggests, come with some conditions, such as making minimum deposits monthly, or limiting withdrawals, and reward you with a higher interest rate.

Even if you choose a regular savings account, you can set up automatic transfers from your transaction account at a preferred frequency to make sure you save some of what you earn. If you have a timeline for your savings, say you want to save for a summer family holiday, you could choose to make lifestyle changes that help you cut back on expenses and push up your savings. 

Remember that most savings account providers have set interest rates to historic lows, following the Reserve Bank of Australia’s decision to maintain a lower cash rate. You may therefore have to consider taking several actions to boost your savings. 

You could compare different savings products, including online savings accounts and term deposits, to see which gets you the most interest. 

An online savings account may offer more convenience and perhaps also a higher interest rate on your deposit than sticking with the savings account you opened with your childhood bank. 

This is why it’s crucial that you constantly compare your savings account options, as interest rates are prone to fluctuation. Some savings accounts may offer higher interest rates for the first 3-6 months, also known as introductory periods. After which, you’ll earn interest at the institution’s standard variable rate. You should check both the bonus and the standard variable rate before applying for the account to avoid surprises.

As they don’t have any physical locations and don’t employ staff, online account providers generally have fewer overheads and can pass on these savings to customers in the form of higher interest rates and lower fees. 

The higher rate you may earn on an online savings account could help you save faster, but if you’re the kind of person who relies on face-to-face customer service, this can be a hindrance. Further, the online savings account provider may offer fewer products, such as credit cards or personal loans, than a bigger institution. If you like to keep all your products with the same provider, it’s worth weighing up this factor as well.