Most Aussies have a savings goal they’re working their way toward - whether it’s a bathroom renovation, a new set of wheels or a well-deserved end of year holiday.
But new research from UBank suggests we’re not all that good at it, with almost half of savers admitting to regularly dipping into their savings account for other spending needs.
According to UBank’s research while 62% of Aussies are saving for a big ticket purchase, like a car or holiday, three-quarters of those people are the ones dipping into their savings account on a regular basis.
The good news is that 11% of Aussies have a strict budget in place - but on the other hand, the same number admit to taking money out of their savings account each week.
To gain an insight into just how much of an impact dipping into your savings pile can have on reaching your savings goals, we’ve taken our Savings Goal Calculator for a spin. We found that if you’re starting from scratch, earning 2.80% interest and saving $400 from your paycheck every month, you could save enough to buy a $15,000 car in three years time.
But say you don’t stick to your plan, and instead dip into your savings and spend just $1,000 each year from it - less than $20 a week. All of a sudden, you’re more than $2,000 short of that new set of wheels. Not to mention, one of the conditions to score a bonus interest rate on many accounts is that you don’t make any withdrawals in the month.
RELATED: Westpac Bump Account takes out a Shonky Award for poor value and "creepiness"
With Christmas approaching and Aussies writing out their gift lists, UBank CEO Lee Hatton has urged Aussies not to throw their long-term savings goal out the window in the silly season rush.
“We are heading into a time of year that sees increased financial pressures for many. From gifts to holidays to hosting Christmas get togethers, Australians are challenged with opening their pockets more than ever. For all those prone to double dipping, we are encouraging people not to lose sight of their long term financial goals,” Hatton said.
If you have a bad habit of spending your savings before you mean to, we’ve got a few tips to make sure your stash will continue to grow.
Sort out your budget. The best way to avoid dipping into your savings is to set out an airtight budget in the first place. If you find yourself regularly withdrawing from your savings account, it might be time to reevaluate your financial plan. This might involve cutting back unnecessary spending, or it might mean parking a smaller amount in your savings and leaving a little more in your everyday account. Just remember that if you do that, it will take longer to reach your big goals.
Get tech savvy. These days, you don’t have to shoulder the hard work of sticking to a savings plan alone! There are heaps of budgeting apps and banking products designed to help you do it. In fact, this week UBank customers will be able to manage their savings with a new and improved iOS app. Check out these seven must-have savings apps for more ideas on how to go digital with your finances.
Find a high interest savings account. Ok, let’s be honest: a great interest rate on your savings account is not going to mean the difference between being able to redo your kitchen and having to settle for a new toaster instead. But sticking $10,000 of savings in an account with a 2.80% return on your savings will net you an extra $279 in a year, compared to one with a measly 0.50%. So it’s well worth putting in the time to find a good account. Check out some of today’s hot options below.