Money Matters - How to save money in 2011
Monday 10 January 2011
by David Rootsey
Port Douglas Branch Manager - Commonwealth Bank
Happy New Year everybody. Hope it was a lot of fun and safe for everyone.
A new year brings resolutions and for many people their resolution is financially motivated, for example to save more or pay off debt.
My personal resolution is to pay off debt while also getting down and watching the Cairns Taipans win as many games as they can this season. With their new signing of Lindsay Tait as a backup Point Guard they have the best chance of winning they have ever had.
Last month I discussed how to reduce debt through managing your loans. This month I will give some suggestions that will help save you money.
Before I jump into all the ideas that you can implement for saving I will add one more tip for debt reduction.
If you have more than one debt, prioritise your debts on which to pay out quickest. If you have a home loan and a credit card debt, pay your credit card debt first as that will have the higher interest rate applicable, while paying only the minimum on the home loan.
Once the credit card is paid you can focus on the home loan. When prioritising take into account monthly/annual fees as well as the interest. If you need help come into the branch and we can sit down and go through your banking together.
Now onto the savings.
The first and best step to saving is set yourself a realistic monthly budget and stick to it. You should consider automatically transferring a portion of your pay into your savings account each week as soon as you get paid.
Whether it is $10 or 10% or whatever you can afford for the week. If you don’t see the cash, you can’t spend it.
Set up and automatic transfer on your internet banking and then hide the account from yourself. You can still access it, but it will be out of sight. If you need help with setting your Netbank up to do this come into the branch.
Get organised and do a weekly shop at the supermarket and avoid unnecessary trips. Also make a shopping list and stick to it - that way you only purchase what is on your list and not all the unnecessary extras.
Before a big night out, have your friends around for a few drinks and snacks - that way you won’t be tempted to overspend on your budget for the evening.
Make sure you keep all of your loose change and store it in one place. At the end of the month bring it into the branch and run it through our change machine. You will be amazed at how it adds up.
At the beginning of each week, take out all the cash you think you will need to see you through. That way you will save on transaction and ATM fees, plus you will know exactly how much you’re spending.
Set yourself a goal. Whether it is a holiday, car, house, or just an amount to have in your savings, a goal gives you that incentive that not spending the money now will be worth it in the future.
With goal setting, make sure it is achievable. If you are only just starting to save and you can afford $50 per week, don’t aim to save $10,000.00 straight away as it will take about four years to reach. This may be disheartening. Aim for $1,000.00 and reward yourself for reaching that goal, then set a bigger goal.
I wish everyone the best of luck for sticking to their resolutions and hopefully I will see you in the branch or at the Taipans.