Australia, along with America, Britain and New Zealand, hold the dubious title of having the lowest rate of household saving in all of the world’s advanced countries. Although we have seen a steady increase in disposable income in Australia for the past ten years, we have seen a gradual decline in household saving. Up until the last two years, we even dipped into negative territory regarding our saving habits.
Perhaps we feel that we can’t find the money in our budgets to save, or perhaps we just don’t understand the importance of an emergency savings account.
Without a proper savings account, we make ourselves vulnerable to a complete, financial meltdown if we lose our jobs or become disabled. Many of us, unfortunately, would not be able to make our mortgage if we lost just one week’s worth of pay.
What can we do to improve our savings habits, and how can we learn to save money each month?
- Although there are many tips for saving, one of the most important is to pay yourself first. That means before anything else is paid or any money is spent, that you automatically put a portion of your weekly or monthly income into a savings account.
- Many people find that having their savings money automatically withdrawn from their checking account or paycheck each month is a great way to begin saving.
- If you’re like many people, you think you simply do not have any money left over at the end of each month for savings. The reality, however, is that many people are careless when it comes to spending habits and are not aware that their morning coffee and doughnut can add up when it comes to finding money for savings.
- The best way to examine your monthly income and spending habits is to make a household budget. The only way to begin a positive savings habit is to first identify areas in which you can cut back on or eliminate. For many asking how to save money, this is often a great first step.
- Many experts recommend saving at least six to nine months of your monthly income in case of a job loss or emergency. Many households are now living from pay to pay just to get by. If you were to lose your job or get sick, you would be in severe financial difficulty in a very short period of time.
Tips for everyday savings
- Go without the morning coffee. The average take away coffee these days is between $3-$5. Having even 3 of these a week equates to at least $500 a year ! Consider making your coffee at work with a plunger or instant coffee - this will work out much cheaper in the long run.
- Use a capped mobile plan. The capped plans offer alot more benefit while being so much more flexible. Especially if your call volumes vary from month to month. Better yet, switch to a capped plan that is prepaid -then you can be fully in control of your mobile phone bill.
- Do your weekly grocery shopping rather than visiting the supermarket every few days to top up. Also plan ahead with your meals so you can buy what you need for the week. Less visits means less chance of you spending money on non-essentials.
- Bring back the use of the good old fashioned piggy bank. You would be surprised at how quickly all your coins can accumulate into a decent amount.
- Consider lay-buying an item instead of putting it on the credit card. Usually the fees are alot lower and you wont be paying interest on your purchase!
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