Tips to help you save effectively

At the start of the pay cycle, your savings are set in stone - an immovable commitment to your future bank account. But then… dinner and drinks. Those shoes. That new game. Suddenly, your savings target is set in quicksand instead, and it’s a minor miracle if you manage to break even.

We all know saving’s easier said than done. But with the right strategy, it’s not impossible. With so many ways to save money, it’s all about being aware of your incomings and outgoings, doing a bit of budgeting and making a few small changes. And yes, you’ll still be able to treat yourself when the time is right.

Keep your eyes on the prize

It’s all about the carrot, not the stick. An important part of saving successfully is always having an eye on your savings target. That could mean a figure you want to reach, or the thing you want to save for. A wedding? A new car? Maybe you’re heading overseas to celebrate the end of uni. This savings target could be your most powerful motivation.

The extra dollar’s in the detail

Now it’s time to get specific. How much are you going to need to pay for your trip or new car? Write down the actual figures and try to strike a balance between dreaming big, and being realistic. Once you’ve got your savings goal - and you could of course be saving for more than one thing at a time - break it down into monthly or weekly savings targets.

When you know how much extra cash you’ll have when you’ve streamlined your spending, you’ll be able to allocate a certain amount each week or month to each goal. You can even have separate savings accounts and give them names like ‘wedding’ or ‘end of uni trip’.

You could still save money and be able to treat yourself, when the time is right.

It’s all about balance (sheets)

You’ve got to know how much you have coming in and going out. If you’re like a lot of people, you might not have much of an idea where your money goes every month. Bite the bullet and look at your statements. Some expenses will be fixed, like rent. However, you might be surprised at how much you’re spending on something that seems insignificant, like takeaway coffee. A coffee a day can add up to around $2000. Buy a coffee every second day, and you've just saved about a grand.

Set a date for your debt

Most people have at least some debt. The trick is how you manage it. Credit card interest rates can be over 20%, so when you pay off the debt, you’re saving yourself the 20% in interest that you’d be paying every year. Plus, you’ll be used to making regular repayments by then. So once the debt’s gone, just keep the payments going… but into a high interest savings account instead.

Separate is safe

We’ve all done it. Leaving your savings in your everyday bank account can make it too easy to just chip away at. So why not create a separate account for your savings?

Choose a savings account that will reward you for saving money. Some accounts even pay you bonus interest if you meet certain conditions, such as a minimum monthly deposit and not making any withdrawals within that month.

Don’t forget that you can have multiple savings accounts for different savings goals. You can even call them different names to keep you on track, like ‘wedding,’ ‘new car.’ or ‘flat deposit.’ Then you can make regular payments of different amounts into each one.

Take away the temptation

If the money’s not there, you can’t spend it. Set up a scheduled transfer from your transaction account to your savings account every pay day before you even know the money’s there.

Give yourself a high five

Seeing your bank balance going up can be pretty motivating. So stay on top of your progress by checking in to online banking or setting up an Easy Alert to notify you when your account hits a certain balance.

Of course, life can be unpredictable, so accept that there may be some weeks where there’ll be unexpected changes to your income or expenses – either positive or negative. If you’ve had a quiet week or you find yourself with some extra cash, throw some into your savings account. All those little additional payments add up and you could reach your goal sooner.

Set up a scheduled transfer from your transaction account to your savings account every pay day.

Don’t be a monk for your money

Most importantly, don’t make your savings goals so strict that you can’t have any fun. You could create a little rainy day fund for spontaneous spending. That way, you’ll protect the money you’re saving for the future and still be able to live in the now. You don’t need to deny yourself a little fun now and then.

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Things you should know

The information contained in this publication is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this publication without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this publication.

Bankwest Easy Alerts are available for your mobile personal transaction and savings accounts. Limited alerts only are available for credit card transactions. Bankwest Easy Alerts will be sent to any compatible iOS and Android device on which you have the Bankwest App and enabled notifications. Whilst some alerts may be sent to your device once you have enabled notifications, in order to receive the full range of Easy Alerts available you will also need to activate the Bankwest Easy Alerts service within the Bankwest App. Terms of Use apply. Bankwest Easy Alerts is currently supported on iOS 9 and Android 5.0 devices and above. Bankwest Easy Alerts is not available on tablets and Windows devices.