How to save $9,468 in a year
It's good to have savings goals, but how can you reach them?
The average savings goal Australians have set themselves for 2016 is $9,468, according to a finder.com.au survey of 1,013 people. People in NSW are particularly ambitious, with a goal of $10,602 per head, while South Australians had a more modest goal of $6,685 each. Here are the figures for each state and territory (except NT), including how much you'd have to save per week to accumulate that sum over a year:
|State||Yearly saving goal||Amount per week|
|Australian Capital Territory||$7,745||$148.94|
|New South Wales||$10,602||$203.88|
Are those targets realistic? Australians do appear to be getting better at saving. The household saving ratio was 2.5% in September 2005, but had risen to 9.1% by September 2015, according to Australian Bureau of Statistics (ABS) data. That said, with NSW residents having to spend the highest proportion of their salaries on rent, reaching those peaks won't be easy.
One useful approach when trying to establish the savings habit is to ensure that you have a specific goal in mind, rather than just putting money away for its own sake. The survey found that a holiday was the most popular savings goal, cited by 49% of respondents. General saving for "a rainy day" came in second place (36%), followed by home improvements (20%) and new technology purchases
A second key strategy is to automate your saving: have a fixed sum transferred from your regular transaction account into a high-interest savings account every time your salary gets paid. Compare accounts carefully to make sure you're getting a good deal and aren't paying excessive fees.
Finally, you should make sure that you're earning as much interest as possible on your savings account. To do that, you'll typically have to take advantage of bonus saver offers, where you earn extra interest provided that you deposit a minimum amount each month and don't make any withdrawals. Some accounts also offer bonus introductory interest.
Right now, the highest rate you'll get for a bonus savings account is around 3.60% per annum. While that's not an enormous rate, if you earned that on $9,468 saved over the course of a year, you'd score $157.79 in interest.