Top 10 Saving Tips

As many Australians are choosing to save in the current economic environment, we’ve pulled together our top tips on saving. So whether you’re saving for a deposit on a house, renovations, a holiday, a new car, or just for a rainy day, we hope that you’ll find these useful.

1. Draw up a budget setting out your income and expenses and have a financial plan.
2. Reduce your credit cards usage - credit cards can distract you from a savings plan so keep credit card debt to a minimum.
3. Spend less than you earn - Spend less than you earn is the secret to creating wealth. You won’t get there unless you stick to this one!
4. Try and find something to give up. This one can be tough, but whether it’s the daily coffee, a drink after work, buying your lunch every day, or something else, if you can save small amounts of money on a regular basis it all adds up!
5. Never invest money you cannot afford to lose.
6. Set up an emergency fund - Should be equivalent to approximately two months of expenses and gives you the flexibility in uncertain times.
7. Keeping a money diary to record your spending – Doesn’t work for everyone but it might be a good start if you’re not sure where your money is actually going. Even if it’s for just one month, it could be just enough to identify the little things that are costing you a fortune.
8. Set goals – key to financial success. This is the fun part. Set yourselves incentives for achieving your monthly or fortnightly budget. It’s no fun putting all your money into savings if there is no reward for hard work. What’s your goal? Is it a deposit for your own home, or a holiday with your family? This is what will keep you focused.
9. Don’t gamble. Many of us are tempted by the dream of winning millions, or thousands, or hundreds, but the reality is the odds are stacked against you.
10. Commit to change. The process of getting back on track with your finances can take years and there will be some compromises that have to be made. If you are dedicated and diligent, you will reach your goal.

If the purpose of you saving is to buy property, it may be valuable for you to know that lenders and mortgage insurers are very strict in what they consider savings. For example, they don’t see the repayment of an existing debt as savings, unless you can prove that you made accelerated repayments, and then it’s only those additional repayments can be considered as savings.

Additionally, savings in non-market assets won’t work in your favour either – this goes for savings under the bed, savings invested in cars or consumer goods - this is seen as spending not savings.

Finally, lenders and mortgage Insurers will want to see your deposit grow over a minimum period of six months.

So good luck and happy saving toward that ultimate goal of purchasing your our Home!
See more tips on obtaining finance.