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The zero-dollar week savings plan

The zero-dollar week savings plan

Becoming a conscious saver who makes regular deposits into a savings account is a fail-safe way to establish smart money habits. Take that one step further and commit to one week of no spending, every second month – and you’ve got yourself some serious savings.

Some people take their quest to save to extreme lengths, such as the flatmates in Canada experimenting with a Buy Nothing Year. But in Australia, Buy Nothing New Month in October encourages conscientious consumption and helps participants better understand their spending habits.

But there is an easier way to take charge of your spending and discover the joys of budgeting, and that’s to have one week every two months of zero expenses. While it can seem daunting to spend nothing over an entire month, getting through seven days every second month is relatively painless.

Planning ahead

Nevertheless, a zero-dollar week will require some thoughtful planning. For example, if you catch public transport to work, you will need to buy your prepaid weekly or fortnightly tickets the week before, and if you drive you may have to switch to public transport or ride a bike.

You will also need to do your grocery shopping early and think of recipes to use everything you already have in your pantry. Or perhaps cook a range of meals the week ahead and freeze them for cost-free dining that has the added benefit of buying you back time for a week.

“The idea of a spend-free week has a lot of merit because it encourages the three qualities of pre-planning, discipline and creativity,” said Greg Pride, financial adviser with Centric Wealth, “which are all good traits to have. You would start to do things differently and that could alter your habits.

“It’s all too easy to pull out the credit card and buy another item. We have made things too easy for spending, and if we set some sort of barrier to spending like this, it would take you to a place you should be thinking about in the long term. Particularly if you have big ticket items you are saving for, such as a deposit for a house.”

Another tip is to keep track of your bills and if they fall during your chosen zero-dollar week, make sure you pay them in advance.

Recruit your friends

Pride suggests, recruiting friends to embark on a zero-dollar week with you. “It would be a lot harder doing it on your own,” he said.

This way you can motivate each other, but you could also enjoy casual dinner parties together (with food and wine purchased the week before, of course) to make up for not being able to go out for that week.

“You will have to be creative in thinking of free ways to entertain yourself,” Pride added. “You could go for a walk in the park or a free concert.”

Inviting friends over for a movie or a games night is another free way to socialise. You never know, you could be starting a new tradition among your circle of friends.

Whether you are saving to purchase your first home or planning your next holiday – employing a savings plan to cut back on your outgoing expenses, while growing your savings in a high interest savings account, will be a giant leap towards achieving your financial goals.

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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 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.

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.

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.