Choosing a savings system that works for you
07 Oct 2021
3 minute read
A quick Google search will show you there are thousands of different budget hacks or new saving methods out there to help you reach your financial goal. While some work for different people, they might not work for everyone. A recent survey conducted by ME Bank found that 21% of Aussie households have less than $1,000 in cash savings. So, how do you choose which savings plan to use, and stick to? We’ve broken down a selection of our favourite saving techniques to help you decide.
The 70/20/10 budget
This is a timeless way to disperse your pay, but it could also be considered strict. The aim is to put 70% of your income towards regular/necessary expenses, 20% towards your savings or debt (if you have debt, focus on paying that off first), and 10% towards spending. This structure works well for those who might have inconsistent working weeks and are paid varying amounts each pay cycle. While this division might seem a little overboard, you can easily tweak it to something more achievable or suited to your needs.
The ladder trick
Saving all your money can sometimes feel like you’re missing out on items you want to buy or things you want to do. The ladder trick works as a reward for achieving a particular goal. The idea is to work hard to save double the amount of whatever you’re wanting to purchase. Say you want to purchase a $1,000 leather jacket; you would have to save $2,000 before purchasing it. This savings model works well for those with expensive taste, or who just need a little reward along the way!
The round up
This one’s a slow burner but can pay off well in the long run. There are many apps out there such as Wisr, that will connect with your spending account and round up every purchase to the nearest dollar, depositing the round up into your savings account. Even banks are starting to introduce their own round up feature to select bank accounts. This savings model would be ideal for someone who doesn’t have an urgent need to save money and is looking to save some extra change over time.
The rinse and repeat
An old faithful savings method to reach your goal is to set aside the same dollar amount each week. This is easy to track and will give you a clear idea as to when you will achieve your financial goal. Putting the same amount aside each week will be suited to those who are on consistent income every pay cycle.
There are so many more options out there, but it’s best you choose the right one for you. If you need a little extra to tick you over until your next pay but don’t want to dig into your savings, just use MyPayNow to get a payday advance.
Disclaimer: This content is not intended to be financial advice. If you do seek financial advice, please speak to a finance professional.