Saving Money Faster

Posted on September 28, 2009
Filed Under Debt | Leave a Comment

Saving money takes time and discipline, but with the right strategy and a good savings account you can reach your savings goals a lot faster than you might think.

Many of the good things in life cost money and saving for big items like cars, boats, or even houses, can take months or years. It is possible to hit your savings goals and get the things you want much faster with a well planned strategy and goals.

Before you begin to plan your saving strategy, you should open a high interest savings account if you don’t already have one. This will allow you to keep your savings completely separate from the rest of your money and will pay a higher interest rate. Also, if you are willing to leave the money untouched for a certain number of months, or even years, you should be able to get an even better interest rate. There are plenty of savings accounts available, so shop around for one with good interest rates and low fees.

It’s time to start making some real goals once your savings account is ready. As with much in life, it all comes down to time and money – how much you want to save and when you want to have it by. Search online for a ‘savings goal calculator’ to see how much your going to need to save to hit your goals and how regular deposits and interest rates can impact this.

Don’t stretch yourself too far. If necessary, establish a longer timeframe so you can save without putting yourself under too much pressure. Alternatively, you could take a detailed look at your personal spending to see how you can save money here and there. Ask yourself if there are some everyday items or expenses that you could live without in order to hit your savings goals faster?

It is a good idea at this stage to sit down and make a detailed weekly or monthly budget that takes in all your expenses, such as day-to-day living, utilities, existing debts, etc. It is better to over-estimate here to make sure you have enough to live comfortably. Any extra money you find yourself left with each month can be moved across to your savings account.

Once you do your calculations and decide how much you need to put away each week/month, there are a few steps you can take to make the process easier. First, you should arrange regular auto-deposits into your savings account from your checking account as soon as you are paid. Another option is to ask your employer if they can split your salary payments to some of your pay goes direct to your savings account each paycheck. This will reduce the temptation to spend and get your money working for you in your savings account as early as possible.

Second, it is vitally important to avoid debt if at all possible. If you have longer term, larger loans then you will just have to factor that into your budget. However, any new debt, and especially debt from credit cards, should be avoided at all costs. Attempting to save while trying to tackle an expensive credit card debt is like taking one step forward and two steps back.

It does take some discipline to reach a savings goal but as your money builds and your goal gets nearer, it gets easier and easier. For longer-term savings goals you may find that your circumstances change during the process and you can save the money even faster than expected.

Tips and ideas from Richard at compareyourbank.com.au which compares banking products including. Visitors can compare products including Bankwest Savings and then apply online with the bank.

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