A new year is a time for new savings goals

A new year is often viewed as a fresh start for many and it’s a good time to think of new goals.

A goal could involve making a purchase and if this is the case, it could be a good idea to put a savings plan into place to make it achievable.

The habit you want to try to avoid is making purchases without considering what you can afford. In the last financial year, the household saving ratio decreased to 4.3% from 12.6%, according to the Australian Bureau of Statistics.

These results show that savings among Australians has become less important. But there are a lot more advantages to having money tucked away for something and it can help you to avoid a financial rut. Read on for ways to help your savings goals.

Holiday: The most common savings goal, especially in the new year, is for a holiday. Most people are highly motivated when planning a trip away and being able to afford it makes the holiday even more enjoyable. Traveling abroad can be expensive so you may want to start saving early. You could even end up saving more than you planned.

Household improvements: Home renovations are also a big savings goal incentive. Modernising your home can not only make it feel more inviting, but it can also add value. Sometimes renovations must be done, especially if there is an emergency. A replacement hot water system or air-conditioner repair may be easier to deal with if you already have savings put away for it.  

Health improvements: This could include a gym membership, wellness courses, exercise gear, mobility aids and equipment, health supplements, specialist visits, home care, and medical procedures. Investing in your overall health is worthwhile and it’s also a good idea to be financially prepared for the unexpected.

Other goals to save for may include:

• Emergency funds
• Home renovations
• Car upgrade
• Retirement
• Investments
• Experiences
• Education/training
• Technology

Make a choice: Be crystal clear with what it is you want to save for. Giving it a name will help make it real and help you to kick-start your savings plan.

Create a timeline: You may want to start with a deadline for your savings and then divide the time in between into manageable and achievable goals. This can often help with the overwhelming feeling of saving up for something big.

The right savings account: It may be a good idea to keep your spending and savings separate. Do your research into which savings account is best suited to your goal. You may even want to create separate accounts for each savings goal.

• Savings account: These types of accounts usually attract a high-interest rate and are easy to use. A savings account is often linked to a transactional or everyday account to make transferring money between the two easier. The idea of a savings account is to make it a little harder to dip into as opposed to a transactional account.
• Term deposit: A term deposit is a high-interest account designed to put money in, not take it out. It is quite different from a savings account since the money is essentially locked away for a set period. This means you can’t spend it or touch it before the end of the term without penalties. This type of account is a great option for a long-term goal and for those who are easily tempted. 

Keep on track:

Make a regular check on your savings to help you stay on track with your goal. This way, you can adjust payments if you need to. You may consider keeping a spreadsheet or a money management app like Frollo or WeMoney. You may find that watching your savings grow can bring great enjoyment.

Consider top-ups:

This follows on from the last point. Some weeks we may spend less than other weeks. Consider adding extra money to your savings to give it a good boost. This is particularly important if you are saving up for emergencies and any other unexpected costs. The more savings you have, the better.

You may benefit from looking at other ways in your day-to-day to help you save towards your new year goals. Try to plan your grocery shops and buy items on special. You could also consider cancelling any unused subscriptions and streaming services, and it’s always a good idea to compare energy and insurance providers on a regular basis.

By following these simple steps and putting some helpful savings methods into place, you can dive into a new year with the confidence that you have your new savings goals planned out to be well within your reach.

Related reading: Australian Bureau of Statistics