Savings Accounts: Reach Your Goals Sooner
Thursday, April 23rd, 2009 Subscribe To Our Feed
With the economy facing big problems here and around the world this year now is the time to shed debts and start some savings goals to buy major items debt free using high interest savings accounts. However, the reality is that it is never enough to simply want to save more money. That won’t quite cut it. Saving money requires a disciplined, well-organised approach.
Below are a few savings tips:
Establish specific goals for saving money
Clear savings goals keep you focused on your savings program. The motivation is higher than if you had no goals as your saving towards something you really want. The value of the goal also guides you on the amount that should be set aside each month. The goals could be:
* Saving up an emergeny cash reserve to cover 3-6 months living in the event of a period without regular income
* Saving for the deposit for your next home
• Saving more money in your super
• Saving enough for a holiday in a particular destination
Set a specific time frame for achieving each goal. When you have figured out your goals and the dates you want to reach your goals you should divide the goal amount by the number of weeks or months between now and your goal date. The result is the amount you need to save from each pay cheque.
Make saving money pay
Those who are serious about reach their goals will take time to seek out the account paying the best interest rates. The interest rates offered by standard transaction accounts won’t help you reach your savings goals. A savings comparison website is the easiest way to compare interest rates and terms side by side before you apply.
If you had $5,000 left alone for a year in an ordinary savings account, you’d be likely to still have $5,000 at the end of 12 months. If you had the same $5,000 sitting in a high interest savings account for a year, you’d likely have more than $5,400 at the end of 12 months. High interest savings accounts attract around 7–8 per cent, which means you get paid for saving money.
Make saving money automatic
Very often, one’s idea of saving money is to save the amount left over each month after paying all outgoings. While it’s good to learn some self control when it comes to spending money it is easier to act as if the money never existed. To increase your chances for success in achieving your target, remove self-discipline from the picture and make saving automatic.
One effective way of doing this is to request your employer to deposit a specified amount from your pay directly and automatically into your new high interest savings account. Once this is arranged, you have nothing more to think about. However, you may have to provide information about your high interest savings account. If you don’t want to do that, you can link the high interest savings account to your normal bank account.
Find income boosting solutions
Increasing monthly income is a great way to help achieve big goals, but it is often neglected. By raising your income, all of the extra money can be directed into savings. You could look for a second job, take on odd jobs, or work extra hours at your present job. Sell some stuff you don’t need, or find ways to generate income from your hobbies.
Summing up, learn to be patient through all these. To start with it may seem slow but as your savings accumulate it will speed up. You’ll find new ways to cut your expenses or to boost income. You may even get unexpected support or extra bonuses. Stay focused on your big goals and you’re likely to succeed.
Article by R Greenwood of Compare Your Bank which allows consumers to compare banks online.
