A Self Confessed “Savings Nerd” Tells Us How It’s Done
When I was a kid I played a lot of Neopets. Nothing too weird about that – I think many current twenty and thirty-somethings were pretty captivated by that game in the early 2000s. What maybe sets me apart though, is that my favourite bit of the game was the bank. I loved earning Neopoints (the currency) and then depositing them straight into my account. It meant I watched my Neopets interest accumulate every day – or as I saw it FREE MONEY.
Since then my zeal for saving and banking has lessened somewhat (realising you cannot earn money in the real world from faerie quests was indeed a bummer) but I am still pretty nerdy when it comes to money. Over the last 7 years (and on a pretty average salary) I’ve managed to travel overseas for a couple of weeks every year and scrape together the deposit for a tiny Sydney apartment. Here’s what I’ve found works when it comes to saving cash.
#1 Payday is the most important day of the week
The morning of payday I immediately siphon money straight out of my spending account and into several other accounts. One is for my fortnightly rent/mortgage repayments, another is a shared account with my partner for bills and basic groceries and the most important one is for savings. I put the same amount each fortnight (and make it as much as I can afford) into a savings account that doesn’t get touched for anything other than holidays, big projects like home renovations or genuine emergencies. This savings account used to be a high-interest account but is now an offset account to lower the amount of interest I pay on my mortgage. If you save the same amount every fortnight (before you even really notice the money is there) it will become an easy habit.
#2 Try not to use credit cards
Once money has been siphoned off elsewhere into dedicated accounts on payday, what is left in my spending account is exactly what I have left for the fortnight. I have found the trick is to be strict with myself on this – if I get to the Monday before payday and have $20 left in my spending account then I’m eating eggs on toast for dinner and staying in with Netflix for the next few nights until my next pay. No rationalising the ‘I’ll just pop it on the credit card and go out anyway,’ mindset as this is how bad debt starts and builds. Saying no is really hard and the FOMO hurts when your mates are popping up on Instagram doing excellent stuff, but there is a certain quiet satisfaction to being totally on top of your finances.
#3 Pay off debt
If you have somehow managed to rack up some debt, make it your priority. First see if you can roll this debt over onto a credit card with a significant interest-free period. Make sure to keep a note of exactly when this period is due to expire because those deals often have hefty interest rates for any remaining balance at the end. If that’s not an option, go into the bank to see if they can do anything to help reduce the existing interest rate – just sitting down and having a conversation with someone about your debt situation and your plan to get out of it can do wonders. At the same time, still try to save some amount of cash – even if it’s just $20 bucks a week – so that you build a small safety net.
Being good at saving doesn’t mean you never do fun stuff! It’s about knowing when to splurge and when to say no. I know that whatever is in my spending account is all I have for that fortnight – but I still go on pub crawls, have extravagant dinners and exxy adventures with my mates. I just don’t do it every night. I’m free to say yes to any spur-of-the-moment ideas, but again if it leaves me low on cash I just accept that the rest of that week will be a little slow.
#5 Plan for surprises
Of course, the definition of a surprise is that you don’t know it’s coming but by preparing for the future you can try and avoid some of the nastier surprises. Putting $20 aside each week for gas and electricity, or car insurance and registration means that when that bill drops into your inbox or mailbox you aren’t blindsided. Of course you can’t always prepare for the future – but your saving account should be ready to save you in the event of a genuine emergency (and no, fashion emergencies don’t count.)
#6 Save half of any extra cash
If I’ve ever gotten money back at tax-time, half has always gone into savings. Equally, if I get a pay rise I add half of what the difference is into that fortnightly savings payment. It’s easy to let your lifestyle expand to absorb any extra money that comes your way but if you could survive comfortably on a certain amount the month before, you probably can again. As for that other half of any unexpected windfalls? See the next point….
Being this strict with your pennies is an achievement that really needs to be rewarded, so make sure you are kind to yourself regularly. Even something little like a great cocktail or a pair of new shoes can be a nice moment to reflect on how much your bank balance is going up. Be proud of what you’re doing and the position you’re putting yourself in financially. It isn’t always fun but hot damn is it satisfying.
Bonnie Sutherland is a children’s puppeteer whose show takes her around the world. She lives for food, new and weird experiences and giggles.