Be smart with my money

There are many ways to save money and here are a few

It’s all about budgeting

It often seems like the more we have and earn, the more we spend. Then you end up having as little savings as you did when you were earning much less.

Now may be a good time to put a proper budget together. This will clearly show if you are spending more or less than you can afford to. Use our Budget planner calculator to list all your income and expenses, then go to the Summary page to see what you have left.

Budget planner calculator

Use our Budget planner calculator to assess your current financial position and how much you may be able to invest. 

Start budgeting today

How to save money

A good way to save is to put some money into a separate savings account as soon as you’ve been paid. Don’t give yourself the chance to spend it, transfer it straight away! Better yet, set up a direct debit from your regular account (the one your income gets paid into) to a savings account.

Compound interest is a wonderful thing

What’s compound interest? It’s when you don’t just earn interest on the money in your savings account, you also earn interest on that interest you’ve earned. For example, if you saved $10,000 at 5% interest per year, you’d think you would earn $2,500 in simple interest after five years with $500 for each year. This would give you a total of $12,500 after five years.

If you invested $10,000 at 5% interest, and the interest is paid monthly, you would actually earn $2,834 in compound interest after five years, giving you a total of $12,834.This is because every month the interest is added to your account and you'll earn interest on the interest.

Shane Oliver, AMP’s Head of Investment Strategy and Chief Economist, explains more about compound interest.

There's good debt and bad debt

Good debt is when you borrow to invest and your investment produces more income than the cost of the borrowing. It’s also good debt if, despite the borrowing costs, the investment is likely to increase in value after you have invested, like property or shares. An education loan is also generally considered to be good debt, as it should enhance your career prospects.

Bad debt happens when you borrow to invest but the value of the investment declines over time, or if you borrow to fund your lifestyle. Bad debts include things like a car loan or borrowing money to pay for an overseas holiday.

It isn’t always possible to avoid bad debt, but it’s worth trying to minimise it. And if at all possible, avoid credit card debt that can easily spiral out of control with such high interest rates.

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Important information

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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.