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Six steps to money matrimony

Six steps to money matrimony

Getting married involves a real change in how you deal with day-to-day life, and your finances are just one component of this. If you’re heading down the aisle in the near future, there are some important financial decisions you and your partner will need to make.

The Relationships Indicators Survey from Relationships Australia found that 71 percent of couples believe money concerns are more likely to push them apart than bring them together. Rather than take the risk, make sure you consider these issues before saying “I do”.

Open up lines of communication

Although it may sound like a cliche, being open with your partner can make a real difference when it comes to your financial future. A survey from YourTango.com found that in 65 percent of divorce cases, a lack of communication is cited as the main reason for the separation.

Debt is also a deal breaker for many couples. RateCity research found 49 percent of women would give their man the flick if they discovered he had substantial debt but are not forthcoming with their own debt – with just over half of the surveyed participants claiming they’d disclose their personal debt to their partner.

You both need to be willing to talk about money, as knowing where you stand right from the start will help you better understand each other’s views and intentions.

Set up a budget

Budgeting skills are essential at any stage of life, but perhaps even more so once you’re married. If you’re moving in together for the first time, then you are both likely to find it difficult to adjust to the new financial situation.

One way of keeping problems at bay is to establish a budget. This means weighing up how much money is coming in and what your bills equate to, before deciding how much you need to save.

Establish financial goals

Having financial objectives in mind can have a real impact on how you view your financial situation. For example, if you’re thinking of applying for a home loan in the near future, then your savings goals might need to be higher than if you’re saving for new appliances.

Financial institutions recommend saving at least a 20 percent deposit on a new home. This way, you can put yourself in a strong position with lenders, while avoiding lenders’ mortgage insurance.

Financial independence

Getting married is also a good time to discuss whether you’re likely to hold a joint savings account or merge your finances once you’re hitched, or keep your money separate, at least for the time being.

There are advantages and disadvantages to both. Relationships Australia asked people with individual accounts why they had decided to this, with the main reasons being because they hadn’t had time to merge their finances, while others wanted to be more independent.

Taking out insurance

Taking out insurance is something that many couples decide to do once they’re officially married. After all, it makes sense to protect each other and any extended family you might have if the worst should ever happen.

There are so many different types of cover available that it’s a wise idea to weigh up each of them individually. For example, you might find that life insurance is the right option for you, or that income protection cover would offer you the greatest peace of mind.

Build an emergency fund

It’s good to have a financial safety net in place, which is something you should both work towards. This will come in useful whenever you need money at short notice, such as if your property requires emergency repairs, or you suddenly need to buy a new car.

Westpac advises that saving just $10 a week will start to add up, giving you $500 to fall back on at the end of the year. However, there’s no reason why you can’t be more ambitious with your savings goals!

Read on for our simple guide to getting financially ready to start a family.

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Learn more about savings accounts

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit ingdirect.com.au.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

What is a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

What are the two types of NAB locked savings accounts?

With a locked savings account in NAB, you can earn bonus interest and learn financial discipline. NAB offers two types of locked savings accounts, each with their own terms and conditions.

The NAB Reward Saver account pays a variable base interest rate of 0.05 per cent per annum and a bonus interest of 0.55 per cent. You’re eligible for the bonus if you make a minimum of one deposit on or before the second last banking day and have no withdrawals in the month.

Meanwhile, the NAB iSaver account provides 0.05 per cent as the standard base interest rate and a fixed bonus margin of 0.55 per cent during the first four months from the date of opening the account. You can park your cash in the account and enjoy unlimited monthly transfers between linked daily bank accounts without impacting the interest rate.