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6 mistakes to avoid when saving

Financial Planning  |  29/07/2016  |   2 min read

Growing a healthy bank balance isn’t rocket science. It just requires a little discipline. We’ve outlined some of the most common stumbling blocks below, so you can start saving today.

1. Believing you need a lot to get started

When it comes to saving, your opening balance isn’t important, it’s all about how consistently you can add to it. Over time, even modest deposits can add up to an impressive pool of cash.

2. Failing to set, track and celebrate goals

Having a goal to work towards is a great savings motivator, and it’s essential for a technique called ‘visualisation’ where you imagine how good it’s going to feel when you have reached your savings target.

So, give yourself something to aim for - a holiday, some new furniture, or a few home improvements. Set a savings target, and start tucking money away to make your goal a reality. Review your progress regularly, and celebrate milestones. Your good efforts growing savings deserve to be rewarded.

3. Taking a ‘manual’ approach

In our busy lives it’s easy to forget to make a deposit each week or fortnight into your savings account. The good news is you don’t have to.

Plenty of Australians use direct debits to automatically transfer a fixed sum out of their everyday account and into a dedicated savings account.  It’s a smart way to know your savings will keep growing no matter what’s going on in your day to day life.

4. Not having an emergency fund

Life dishes up curve balls, and research shows one in three Australians dip into their savings to fund unexpected expenses. But there’s a simple way to prevent financial shocks derailing your savings plan.

The solution lies in having an emergency slush fund of cash. Maintain a savings account of rainy day money and use a separate account for your primary savings goal.

5. Trying to do all the hard yards yourself

There’s nothing like teamwork when it comes to building savings, and your savings account needs to pull its weight to help you achieve your goal. That means looking for an account combining zero regular account-keeping fees with a consistently healthy rate of interest that won’t drop to next-to-nothing after just a few months.

6. Putting saving off til tomorrow

There’s no better time to start saving than right now! The sooner you begin, the sooner your money will start earning interest. Better still, it only takes a few minutes to set up a dedicated savings account, and then you’re good to go to build regular savings and reach your personal target.  What are you waiting for?

This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the relevant Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance. Issued by Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383. 

Used with permission from Members Equity Bank Limited ABN 56 070 887 679 Australian Credit Licence 229500.

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