Spend smarter to reach your goals sooner
If you’re looking at doing more with your money, it’s time to re-think your spending habits and make a plan to get ahead. Here’s how to start:
- Know where your money goes—The first step is to identify where your money is really going. It’s easy to remember how much your mobile costs or how much rent you pay, but do you know how much you’re spending on everything else? And, can you afford to?
It’s a good idea to record what you’re spending. You can do this yourself using a spreadsheet, or get help from a budget tool. This will show you where the opportunities are and where you may be spending money that can be better spent on helping you reach a goal.
- Make a plan you can live by—Now you know your position, it’s time for you to create a plan to get what you want. Creating a spending plan can help you work out how much of your income you can put towards saving for your goals, without impacting the life you want to live.
In your plan, you can list your expenses and set limits on how much you want to spend on expenses each week. Or it may simply be a commitment to change your behaviours to reduce spending, such as cooking at home more or using your car less.
- Build your savings skills—Spending less than what you earn is a smart way to get ahead. Set yourself up for success by starting with simple savings goals, so you can keep a balanced lifestyle and enjoy putting money away.
Saving to reach your goals
Many of us start saving for something without a set figure in mind. But until you know all the costs involved, it’s hard to put a realistic plan in place to help you achieve it. Here are some ways to get started:
- Make a list of all the costs—It’s not just a car you’re saving for—it’s registration, insurance, petrol and accessories. Do your research to understand all the elements.
- Shop around—With an idea of the costs involved, you can shop around to see where you can get the best price.
- Make a plan to reach your savings goal—Once you understand the price range, set your savings goal and start planning timeframes.
Make your pay go further
When you know how much you need to save, it’s time to take a good look at where your money is being spent.
- Get your debt under control—Debts come in many shapes and forms, such as credit card debt, HECS-HELP debt or a home loan. By understanding the interest rates, the payment terms and the size of the debt, you can manage it more effectively. Look into ways to take control of your debt to see how to prioritise and pay it off in the smartest way.
- Look at how much you spend—This can be easier said than done. But by spending less on entertainment, eating out and drinks, you can put that money aside towards your goal. Ease yourself into it by making small changes at first, so you can enjoy saving money and keep your active lifestyle going.
- Stay focused on your goal—If you’re saving up for a long-term goal it can be challenging to keep your eyes on the prize. You may, for example, feel tempted to take an impromptu holiday. If you have a large expense coming up, it helps to avoid buying things on impulse. Look at your savings plan and the timeframes, and see how much this new expense will push out your long-term savings plan.
Use our Budget planner calculator to see how much you’re spending.
Putting away your money to grow your wealth
One way to get more money is to cut back on spending. Saving small amounts of money over time can really add up—and if it’s in a dedicated savings bank account you’ll also benefit from interest. Some common options include:
- a high-interest savings account—A high-interest savings account will let you earn interest on the balance in the account. It can be quite easy to transfer this money to other accounts, but it’s usually less accessible than everyday accounts so you’re encouraged to save.
- term deposits—With a term deposit, you lock away your money for the duration, while you earn interest on the balance. The length of this duration can vary from three months to more than five years.
- online-only accounts—With these accounts, you’re not able to withdraw cash. It’s only for online transactions or transfers.
- other investments—You may want to consider other investment options, such as shares or mutual funds. These options are more complex than savings accounts. They can have higher returns, but they carry higher risk as well. You need to be comfortable with how these work and willing to accept the risk.
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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.
This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.
The bank product issuer is AMP Bank Limited.