Who are the best savers? What are their tricks?
A disciplined saver can reach their financial goals in a fraction of the time it may take a slow saver. So what are the secrets of being a good saver?
ME Head of Deposits and Transactional Banking Nic Emery says organisation and clearly defined goals are the hallmarks of an effective saver.
• Declutter your banking to save time and money
• How well do you know your bank account
• Savings tips to make your dollars stretch further
“There are two distinct camps when it comes to saving: people who live day-to-day and those that plan for tomorrow,” he says.
“Unsurprisingly, it’s the planners that crow the natural talent to save: they are goal-orientated, disciplined and have good systems in place.
“The day-to-day types on the other hand are wired to buy now and pay later, and generally do not track expenses, or set clear goals.”
But all is not lost for those who pay little attention to counting their pennies.
Emery says simple steps such as automated money transfers, where a set amount of money is deducted from your pay at regular intervals, can help them get ahead.
“For instance, it is wise to set up a percentage of your salary to be automatically deposited into a term deposit or high interest savings account so you’re less inclined to touch it,” he says. “The same applies to topping up your super.”
Common strategies of good savers
• Identifying unnecessary expenses
• Staying true to a budget by consistently committing to every minute detail
• Delay purchasing big-ticket items until they can afford it
• Investing time in improving financial knowledge
• Comparing best and highest interest rates online to help their savings grow as much as possible
• Paying off any debt, particularly credit card debt, within the interest-free period.
Where do you fit in?
Results from the ME 2015 Saving Intentions and Behaviours Survey, which polled 1500 households, reveal Australians are using a range of different savings strategies to reach their goals.
At 47 per cent, the majority say they transfer money to their savings accounts when they have spare funds, while 22 per cent have set up automatic transfers. Putting all their funds into a savings account and then shifting some to an everyday account when necessary was the method for 21 per cent. And 17 per cent said they stored their money in accounts such as term deposits, they were unable to withdraw from.
The survey also revealed bad savings habits: 62 per cent of respondents reported not consistently keeping a record of monthly expenses and 59 per cent said they don’t habitually set a budget. A further 41 per cent admitted not sticking to their budgets and 46 per cent don’t regularly pay off their credit card balances each month.
The survey also exposed vastly different savings goals across the generations. Saving for a car, holiday or big expense other than a house was the top goal for 33 per cent of Gen Y, whereas 43 per cent of Gen X say paying off their mortgage is their top goal.
Unsurprisingly, building wealth for retirement is the top priority for 32 per cent of Baby Boomers.
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