We all tend to start the new year off with good intentions and if you’ve put savings on your list of 2015 must dos then read on.
Whether your goal is to save for a house deposit, get rid of Christmas debt or take a 6 week mega holiday you’ll need to come up with a savings strategy. And like diet and exercise regimes, saving money successfully is about finding a method that suits your personality and lifestyle.
Here are some savings strategies that have been recently tried and tested by the Mozo team. Try one (or some) of them this year and become a savings superstar your friends will envy.
Quit your vice
If you have been looking for a reason to cut back on your alcohol intake, quit smoking or even the daily latte, this could be your winning strategy. Did you know that morning $3.50 cup of coffee adds up to $840 a year? If you don’t think you can go cold turkey for a year, why not commit to vice free weeks a couple of times this year. One of our Mozo staffers saved over $300 in two weeks by cutting out the daily coffee run and booze. If they do this 4 times this year, there’s $1200 saved.
Track your spending
If your goal is to save for something big or get rid of unwanted debt tracking your spending is going to be one of the best ways to get you on the right savings track. By tracking your spending you’ll see just how much of your money goes towards the ‘wants’ versus the ‘needs’. Once you’ve reviewed your spending you’ll then want to give yourself a fixed weekly spending budget (withdraw cash at the start of the week and keep the debit card at home) so that you can’t be tempted to spend.
There are a number of free apps (Trackmyspend, Pocketbook, Moneysoft) and internet banking tools (Netbank My Spend, NAB MoneyTracker) that will do the spending tracking for you so don’t have to spend hours with your receipts and an excel spreadsheet.
Mozo’s PR manager Caroline Thomas found this strategy a real eye opener. “I was amazed to see how quickly all those small purchases add up,” she said. “And having the set cash budget made me say no to anything that wasn’t absolutely necessary.”
One week on, one week off
Similar to the 5:2 diet where you eat normally for part of the week, and fast for the other days, this savings strategy means that you live life like you normally would for one week and then for the second week you cut back on everything. I loved this savings strategy as I found it worked well for all members of our family. I could give up the workday coffee/lunch for a week and the kids didn’t mind forgoing the take-out pizza for one week. It also helped me to get through some of the additional stuff in the pantry. I was a little concerned that I would overshop on the ‘on’ week but I actually found that I became a lot more discerning about what went in the trolley and now our regular shop grocery bill has come down.
For the trial, we saved just over $400 in our off week by shopping at Aldi instead of woolies, packing lunch each day for everyone and no take out. If we can keep up the discipline for the remainder of the year we would save a staggering $10,634. Even if we only do the challenge for just one week in the month we will save enough for an overseas family trip next Christmas.
Every little bit counts and when a sandwich in the Sydney CBD runs at around $8.50 a pop, that’s $42.50 a week that could go towards something more fun like a $500 shopping spree at the mid-year sales.
If you are going to go for the BYO strategy you’ll need to be more organised with shopping and planning ahead so that you can vary your meals. It’s fine to have spag bol leftovers for lunch one day a week, you don’t want to be eating it for 5 days running.
$10 note challenge
This savings strategy works best when at the start of the week you withdraw a set weekly budget in cash from the ATM and only use this money for your spending that week. Hard to do, in the era of ‘Tap N Go’ but if you’re keen to savings some money this year this method is a winner.
First challenge is to give yourself a budget for the week, be realistic about how much you will spend. Let’s say that amount is $250. Now you can only pay in cash for the week and every time you receive change if you get a $10 note you have to put it to the side and not spend it (this is your savings).
This savings method is totally random so one day you could save $30 and then next nothing. Our Mozo staffer ended up with seven $10 notes after 2 weeks.
Top accounts for your money
Now that you’re on the track to savings superstardom, you’ll need a place to stash your hard earned. Don’t keep your money in your everyday account. Firstly, it is too tempting to spend it and more importantly, you won’t be earning any interest if you do.
Options for parking your cash:
- Bankwest Hero Saver: 4.00% p.a. interest rate with $200 min monthly deposit and no withdrawals. No account fee.
- HSBC Serious Saver: 4.00% p.a. for first 4 months then 2.70% if you don’t make any withdrawals in the month. No minimum deposit requirements and no account fee.
- ANZ Progress Saver: 3.41% p.a. when you make at least $10 deposit and no withdrawals in the month. No account fee.
Compare more savings accounts on Mozo here.