5 things you weren’t taught in school about your finances

finance-lessons

From questionable hair choices to finding rotten food in your locker, high school memories stay with us. 

But what about the bits you’ve left behind, like economic lessons? According to a Household, Income and Labour Dynamics in Australia (HILDA) survey in 2019, fewer than half of Aussies could correctly answer five basic financial literacy questions. 

So, to get you back on track, here’s a quick crash course on the top five most important things you should know about your finances.

Lesson One: Interest can be a blessing and a curse

Understanding how interest works is key to getting on top of your finances. This is because it has the potential to either help build wealth or send you into debt. Let’s consider the following scenarios: 

At the moment, Mozo’s database shows that Australian Unity currently owns the leading ongoing savings account interest rate of 1.75%. Let’s say you had $7,000 in savings and could afford to put $1,000 away every month for the next year with that rate. According to the Mozo saving’s calculator, after twelve months, your balance would grow to an impressive $19,220! 

On the other hand, the average credit card interest rate sits at 16.88%, with the average balance totalling $3,357. If you were to put $200 toward monthly repayments, it would not only take you one year and 8 months to be debt free, but you’d fork out $499 in interest and fees (this scenario assumes that the card has a $99 annual fee as well).

Lesson Two: Everyone needs a budget

When you’re young self control might be the one thing that’s tricky to put into practice. But understanding how to budget can give you the upperhand. It’s never too late to start with some good old fashioned pen and paper, there are a few things to keep in mind. 

For example, if you find that your outgoing expenses are greater than your incoming expenses, you might need to start reducing some unnecessary spending, such as streaming subscriptions or takeout. 

Still think you need some more help? Check out our creating a budget guide!

Lesson Three: Setting goals gives us purpose

Whether it’s buying your first home or travelling the world, everyone has something they’re passionate about. And because these things can’t be achieved overnight, setting short and long term goals is essential. Aside from giving us something to work toward, goal setting can also instill positive money habits along the way. 

For example, if your goal is to purchase your first property, it won’t be long until you’re switching things up for the better. This could include things like cutting back on eating out, making sure bills are always paid on time, reducing debt and improving your financial jargon.

Lesson Four: Always be prepared for a rainy day

It’s important to ensure you’re prepared for when things go awry. Although dealing with tough situations can look different for everyone, you can’t go wrong with setting up and building an emergency savings fund. 

By having an emergency fund ready to go, you won’t have to resort to credit to take care of unforeseen costs. Your emergency fund should be enough to cover three months worth of living expenses or, according to Mozo research, roughly between $7,000 and $10,000. 

Our comprehensive guide can help you take your first steps and provide insight into how long it could take you to build your emergency fund.

Lesson Five: Never take the first offer

If you don’t tap into your negotiation or research skills, you could be missing out on saving some serious coin.

For example, a recent Mozo number crunch found that the average NSW household could be saving as much as $241.77 a year* on their energy bill by switching to the cheapest offer on the market. 

Regularly shopping around can help make sure you’re getting the best bang for your buck and are not spending more than you need to. 

Ready to put some of these lessons into practice? Then you’re going to need a top savings account to get you started! Head on over to our savings account comparison tool or get started with the offers below.

*Ausgrid network, average usage of 4000 kWh a year

Compare savings accounts - last updated 18 September 2021

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Boost Saver with Go Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.50% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Intro bonus rate of 1.50% for first 3 months, reverting to 1.20% after. Deposit $2,000 each month and make 5 eligible payments from your Go Account. If you are between 18 and 25 deposit $1,000.

    Enjoy a savings account bundled with a spending account. No monthly fees. New customers can earn up to 5000 bonus Virgin Money points on purchases (conditions apply). Benefit together with a joint account

    Details
  • Mozo Expert Choice Badge
    Bonus Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.

    Winner of a Mozo Experts Choice Award 2021 in the Regular Saver category. No monthly account fees and no minimum balance requirements.

    Details
  • Online Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $500,000)
    0.35% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    No account keeping fees. No minimum balance required. Unlimited phone and internet transactions.

    Details
  • Grow Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.65% p.a. (for $0 and over)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Make at least 1 deposit and no more than 1 withdrawal, including internal transfers or external payments.

    Earn a maximum interest rate of 0.65% per year. Pay no monthly fees. Set up in-app savings goals. Benefit with joint account options.

    Details
  • Fast Track Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.05% p.a. (for $1 to $250,000)
    0.05% p.a.(for $1 and over)
    Yes up to $250,000

    Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

    Earn 1.05% p.a. Bonus Interest in the following month on your Fast Track Saver Account balance. Earn Bonus Interest on your savings, with no minimum balance required.

    Details
  • WebSavings Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.00% p.a. (for $2,000 and over)
    0.05% p.a.(for $2,000 and over)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening on balances over $2,000 only, available to new customers only.

    A high interest savings account that still lets you access your cash, no monthly account keeping fees and top up as many times as you like.

    Details
  • Savings Maximiser
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $100,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    For customers who have an Orange Everyday and in each month deposit at least $1,000 into a personal ING account, make at least 5 settled card purchases using the linked ING debit card and grow the account balance.

    No ING fees. Great variable rate every month when you grow your balance each month in addition to other eligibility criteria.

    Details
  • High Interest Savings Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $250,001)
    0.25% p.a.(for $0 to $250,001)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Kick start your savings with the 4 month introductory variable rate. No fees, no minimum balance, no minimum monthly deposit and no minimum term.

    Details

^See information about the Mozo Experts Choice Savings Account Awards

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