There’s no doubt that getting into the habit of saving money is a hard task for many Australians, especially when their paychecks are being eaten up by essentials such as utilities, home loan repayments, food and other weekly costs.
In fact, a recent study by online provider UBank revealed that 2 million Australians have less than $1,000 in their savings accounts, with 35% admitting that they didn’t even have a dedicated savings account at all.
But fear not – these five simple savings challenges are designed for even the tightest budgets, with the potential to boost your savings account balance by over $3,000 in just a year.
1. The 52 week saving challenge
Part of the struggle of consistent saving is not only getting into the habit of putting money away, but having a target which motivates you to achieve it. That could be a long term goal like buying a new car, or even just hitting a dollar figure in your account ($3,000 sure would be nice).
That’s why the 52 week saving challenge is such a great way to kickstart your savings – not only will you be eased into the habit of saving, you’ll also have a set target you know you’ll reach at the end if you follow through.
So what is the challenge? It really is simple – every week for a year you’ll need to transfer an increasing amount of money into your savings account. In the first week you’ll transfer just $1, in week two you’ll transfer $2, in week three it’ll be $3 and so on. By week 52 you’ll have to transfer $52 which, when combined with all those other weeks, will give you a final balance of $1,378 (that’s not even including any interest you’ll earn along the way).
Pro tip: Why stop there? The Mozo savings calculator shows that if you were to keep up that level of saving (say $50 a week) using the ME Online Savings Account (which has the highest current interest rate on the market at 3.05%) you’d have over $4,000 in your savings account by the end of the second year!
Total money saved: $1,378
2. The daily change jar challenge
I know what you’re thinking – does throwing some pocket change into a jar really count as a proper savings plan? You bet it does.
At the end of every day you’ll probably have a bunch of change from your daily lunch or coffee weighing down your wallet, so the challenge is to chuck any silver coins (or gold if you’re really committed) into the change jar. That’s it.
So how much would you actually be able to save doing this? Well, even if you only threw that measly 70 cents change you get from your morning cappuccino into the jar every day, by the end of a year you would have amassed a very tidy $255.50.
Pro tip: Worried that you might be tempted to dip into your savings jar in the same way Winnie the Pooh dips into a jar of honey? Well keep your coin stash in an enclosed container like a cardboard box, or somewhere out of sight so you’re not tempted to plunder it.
Total money saved: $255
3. The fee-free product challenge
Are you sick of paying a tonne of fees for your banking products? Well you’re not alone. According to recent data from the RBA, Aussie households are being hit with $477 worth of financial product fees every year on everything from their bank accounts to their credit cards.
So could you potentially be saving hundreds of dollars a year by taking up the challenge to switch to products with no fees? Absolutely, in fact the Mozo database shows that there are currently 28 credit cards with zero annual fee, 44 home loans without upfront or ongoing fees and 55 bank accounts with no monthly service fee.
Pro Tip: Just remember that while it might be tempting to spend the money you save by ditching fees, your future self will thank you much more if it goes into your savings account!
Total money saved: $477 a year.
4. The weekly ‘ditch a vice’ challenge
Everyone has a vice, and we’re definitely not suggesting that you need to give it up altogether and live out the rest of your life as a nun. But whether it’s your morning coffee or that takeaway thai you just can’t resist, challenging yourself to ditch a vice just once a week could add up to a nice little sum in your savings account over a year.
For example, forgoing a morning takeaway coffee ($4) once a week would save you $208 over the course of a year, while giving up takeaway once a week ($15) would net you even more – a whopping $780 a year.
Pro tip: Think you could go full even further and ditch one of your vices altogether? Check out the Mozo Vice Calculator to find out just how much you could save.
Total money saved: $208 for coffee, or $780 for takeaway.
5. The highest interest challenge
Ok, so while this isn’t technically a challenge which will save you money, it certainly will help you make the money you do save earn even more interest.
Many Aussies are probably guilty of keeping the bulk of their funds in a regular bank account rather than a high-interest savings account. This means they’re missing out on some serious interest – especially given that the current average interest rate for savings accounts in the Mozo database is 1.83% while most regular bank accounts don’t offer an interest rate at all!
So just how much more could you be earning by making the switch to a high-interest savings account? Well if you were to take the money you saved with the other challenges above ($3,098 over a year) and put it into a savings account with an average interest rate (1.83%) for three years, you’d end up with a final balance of $3,273. That’s almost $300 extra just by making the switch!
Pro tip: Want to compare a range of savings accounts yourself? Head on over to the Mozo Savings Account hub to compare 200 deals from 69 different providers.