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I want to write a blog on how to save you money but the truth is there are so many ways you can save money, lots of little changes you can make to your banking which will save you a little here, a bit more there. So where to start? If I wrote everyway I knew in one blog post it would be too long and you would most likely be overwhelmed rather than inspired.
For now I will share 3 simple ideas to save you money and I will make sure to follow up in the future with more hints and tips.
1. Loose your account keeping fee?
In the 12 years, I was working for one of the major banks I would see clients on old banking fee structures when there was a better option for them, some clients didn’t even realise they paid a fee.
Typically, the account fee is around $5 so go to your bank and talk to them about which account doesn’t have monthly fees and switch your account to that. If that’s not an option, then go online and find a bank that has no fees (or will waive them for you)
I know what you’re thinking, it’s only $5. Yes $5 is a cup of coffee these days so that’s not much, but consider this in a year that’s $60 and over 10 years that’s $600 and you get the idea, it’s money back in your pocket.
2. Offset it instead of save
If you have a loan (this applies to most variable home loans and personal loans) you should consider opening an offset account to store your savings and or bills money rather than opening a saving account. With an offset, you are saving yourself money on the interest you are charged, whereas a savings account you are making money on your savings but usually its much less and because it’s an income you may need to pay tax on it.
For example, you have a home loan with an interest rate of 4% and a savings account with an interest rate of 3%. If you have savings of $5000 then you can either, make $150pa and perhaps pay tax on that or save $200pa off your home loan.
3. June 30 = pay rise
This could be a favourite tip I was given years ago, from a dear friend and it is such great advice. When June 30 comes around a lot of people typically get a pay rise to correlate with inflation and the cost of living.
Consider opening a spate account and asking your employer to deposit the addition income directly into that account. Once you have set it up make sure you forget it. Don’t even think of it as income and don’t use it in your budget. The theory is you have learnt to live on the income you had so the increase will only mean your new living expense will expand to include the additional money.
So, let’s look if you’re on $50k pa and you get a 3% increase that’s approximately $950.00 after tax in the first year going into that account. Then the next year after the next 3% increase you will save about $1900.00. This means your savings over just the two years is about $2850.00.
In the above example the pay rise each year works out to be approximately $18 net per week, that seems so minimal that you can see how it would just ‘go’ to this and that. So, if you set it and forget it then over two years you have enough to go on a small holiday and you haven’t had to ‘cut’ anything out of your current living costs.
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