How to save $3,000 in 2018

How to save $3,000 in 2018

Now that you’ve blown your budget over Christmas, it’s time to take saving seriously. We’ve got six ways to help you save over $3,000 in 2018.

Stay loyal to your coffee cup

A lot of people can’t make it a day without at least one cup of steamy coffee. At some point, you may have been advised to ditch the coffee altogether or brew it at home, but there’s a new money-saving caffeine hack on the block.

Many cafes will reduce your coffee price by $0.50 when you bring your own cup, making a KeepCup good for your wallet and the environment. If you drink two coffees a day, you’re looking at a saving of $365 in 2018.

Cancel the cable

If you have a big cable package, it’s likely one of your highest bills each month. Many households spend over $75 a month on their favourite channels, so cutting ties with your cable can help you save big time in 2018.

Today’s entertainment opportunities are endless, so you could consider swapping your cable for a more affordable streaming service. If you swap your $75 monthly bill for a $12 streaming fee, you’ll save $756 this year.

Set up bank accounts that give back

Staying on top of your banking can not only save you money – it can also earn you money. Do an audit of your bank accounts, asking yourself a few key questions. How much are you paying in fees? How much interest are you earning?

When you understand your accounts, you can earn more interest, pay fewer fees and save hundreds. If you have two bank accounts that charge a standard $5 per month, then switching to an account with no monthly maintenance fees could save you $120 in 2018.

Go for cold

Think about everything in your home that heats up. There’s the washing machine, the dryer, the kitchen faucet, the shower, not to mention the space heaters you blast during the winter.

Monthly gas and electricity costs range from $140 to over $500 per month in Australia, so choosing even one or two cold-water alternatives can save you cold hard cash in 2018. Simply washing your clothes in cold water can save you $0.50 a load. If you wash two loads of clothes per week, you could save $52 on your laundry alone.

Say hello to H20

Water isn’t just the healthiest option to drink; it’s also the most economical. If you consume one soft drink a day, you’re looking at a monthly bill of about $60. At $1.90 a bottle, cutting a Coke a day would save you $57 per month, or $684 per year.

Go meatless on Mondays

Going meatless is a healthy way to save money. Proteins like beef, chicken and fish usually have a higher price tag than vegetarian protein sources like beans, eggs, or nuts.

Plus, going meatless doesn’t mean giving up meals you love. Try trading your steak fajita for a three-bean taco with all the fixings.

Swapping out your meat can save you over $10 per meal, so even going meatless for two meals per day, one day per week can save you $1,040 over the course of this year.

Now that Christmas has passed, it’s time to start saving. Use a few of these tips and tricks to see how much you can save in 2018.

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Learn more about savings accounts

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

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

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.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

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.

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.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

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. 

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.

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 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.