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Student savings account guide

Tuesday, 23 December 2014

Posted by Mozo

Let’s start with the #realtalk: saving money as a student is bloody hard. Primarily - no, wait, let’s try that again - entirely because you don’t have much of it to save in the first place.

But, at the risk of sounding like the parent helper in charge of your primary school banking program, saving is a really important habit. And just like riding a bike, pulling all-nighters, or accepting that you are too old to become a YouTube ukulele child prodigy, it does become easier with time.

So, if you have a little bit of money (or the desire to have a little bit of money after being more responsible with your next few paychecks) and you’re not sure what to do with it, follow us as we teach you all about the clever accounts that turn forgone bottles of vodka into second-hand cars.

Or more bottles of vodka. No judgement.

Types of savings account

With a few different types of student savings accounts that might tickle your fancy, it’s important to pick the one that’s best for you but, remember: there’s plenty of competition in the savings account market. So, search Mozo’s savings account tables to see the options on offer.

Instant access student savings accounts

Are you the sort of person who optimistically transfers their whole paycheck into their savings account, only to slowly (and disappointedly) transfer it back into their everyday account because they didn’t remember that they had to pay for textbooks this month, and gym fees, and five bottles of nice-ish bottles of wine because every one of their present-worthy friends was born in August?!

Yeah, we aren’t either.

But, those people (whoever they are) should look at an instant access student savings account, or standard rate savings account. You’ll earn a slightly lower interest rate, but being able to transfer your cash between your bank and savings account whenever you want, without restrictions or annoying fees, will be worth it.

Intro rate student savings accounts

With a high rate for the first few months, and a sub-par rate thereafter, these accounts are the ‘photoshopped Tinder picture’ of the savings account club. But, just like you can ditch the bloke who drew on Adobe abs to get the ladies, you can ditch these accounts once they revert to the flabby rate.

‘Go-hard or go-home’ savings accounts*

These savings accounts will earn you a super-high ongoing interest rate, provided you play by their rules. Normally that means depositing a certain amount each month (minimum deposit savings accounts), keeping your balance above a certain amount (minimum balance savings accounts) or not withdrawing too much each month (maximum withdrawal savings accounts). And, if you break the rules? Bam! No interest for that month.

These accounts are best for students who like a challenge, because it will take every last ounce of your willpower to not transfer money from your savings account as you live off the $17.52 in your everyday bank account with your next pay check three days away.

*May not be the technical term.

How to be the sort of person who saves money

Now you have your savings account, don’t let it join your textbooks sitting in the corner and gathering dust. This is how you can get the most from it:

Draw up a budget

Make sure you are your most honest self: take into account all of your regular expenses (necessary and frivolous), as well as any extra money that you seem to be paying out each month. For example, if you tend to need a cab to get home on a Saturday night, that might not be a planned expense but it is, alas, a regular expense, and should be included in your budget.

Draw up a better budget

Now, look at your honest self and ask: “How can I make my honest self a better self?”

Engage in a bit of personal fiscal policy and make some budget cuts. Regular, but excessive items like your daily takeaway coffee (or second takeaway coffee, if you’re really an addict) are a good place to start.

After doing this, you should have found some money you can put away each month. Give yourself a financially responsible pat on the back.

Be consistent

Remember what we said at the start of this guide about savings being a habit that gets easier with time? Yeah, that.

Force yourself into the habit by setting up an automatic direct debit from your everyday account to your savings account as soon as your pay check arrives.

Save the little bits - they matter

Remember, a dollar saved can turn into a dollar and four cents by the end of the year.

Stay on top of your rate

The savings account market can be a bit like a group of six-year-olds at the zoo, or what number wife your Great-uncle Tom is up to: hard to keep track of.

Interest rates constantly change and, while your account might have been the best account around five years ago, it might not be working as hard (or, more importantly, as hard as its competitors) now. Make sure you know what other savings accounts are out there, by searching the market on a regular basis for better deals.

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