It has been reported that 9 out of 10 Australians are unsure of how much money they spend each month. If you are saving for a holiday or a house or a car if you want to make it easier to reach your savings goal it would be a good idea to keep track of how much you spend each month.
Here are some tips to help you increase your savings and achieve your financial goals.
Put Your Savings on Autopilot
If you are currently saving for something special such as a first home, it would be a great idea to make saving not spending your top priority.
An easy way to make sure you keep adding to your savings is to set up an automatic transfer from your everyday bank account to your savings account on every pay day.
Set a realistic amount so that way you won’t be left desperate for cash in the middle of each pay cycle. The money you have left can be spent however you wish. However, don’t use any of the money in your savings account.
Adopt a 50:30:20 method
This method is when you divide your take-home pay into three set portions. The first part is you spend 50 percent of your pay on living costs, 30 percent for fun things such as dining out or entertainment and leisure. The final 20 percent can be invested into your savings account.
These portions don’t have to be set in stone. You can play around with different percentages until you find what works for you. Think about setting up separate accounts and dividing your money between the three portions. It can make it easier to stick with your chosen spending portions.
Track Your Progress with A Budgeting App
There is a large number of different apps available to help you stay on track with your saving and spending goals. Some of the most common include; Mvelopes which is an app that allows you to allocate set amounts to regular expenses. Pocketmoney, is another app which syncs with your bank accounts, loans and credit cards,
If adopting a digital approach to money management works for you, these apps can play a huge rule in enabling you to grow your savings.
On the other end of the financial spectrum, there are plenty of apps that encourage people to spend more. From buy-now-pay-later apps to food delivery services, the common thread is that they make it harder for a person to stay faithful to a budget.
It is super important to skip the app trap by deleting spending apps from your phone or at least until you have started to achieve off some savings goals.
What to do with “surprise money” when receiving an unexpected gift or additional income
Sometimes you might be in a fortunate situation to receive some unexpected cash. A common reaction to receiving “surprise cash” for a lot of people is to spend it fast. Gifts, inheritances, a big tax refund or prize money are some key examples of unexpected money.
When receiving money, you don’t expect, pause for a while and think about what you want to do with the money and how it can be best spent or saved. After giving yourself a couple of weeks to think you will than most likely be able to do something with the money that you are happy and minimise the risk of regretting how you spend your surprise money.
During the couple of weeks, you spend thinking about how to spend your surprise money you might think of an out of the box way of spending or saving your money which is strategic as opposed to spending it all suddenly as soon as you get it and then going onto regret your rushed decision and spending habits. It is important to be strategic and to do something that will support your long-term financial future such as paying off bad debts such as your credit card.