A financial expert's hacks to get your savings back on track

ARTICLE

14 July 2022

3 mins read

Wellness

It's the little things that count. From payment strategies to emergency funds, we get a financial expert's opinion on budgeting hacks that'll help your savings stack up.

With the cost of living rising1, our small splurges can sometimes cost us big in the long run – especially those of us who can’t function without a daily barista-made coffee. Thankfully, there are ways to make your money go further without having to skip the things you love.

We asked financial expert and Director of Guardian Wealth Partners Damien Daviot for his top budgeting hacks, so you can boost your savings and have more money for the good stuff.

1. Plan for pay day

"When you think about saving, you probably tend to view it as an end of the month job," says Damien. "So, you'll pay your rent and bills, spend as you please, and then just save whatever's left over before you get paid again.

"What you should really be doing is setting yourself a goal for how much you want to save each month. Then, as soon as you get paid, transfer that money out of your day-to-day account so you're less tempted to dip into it."

2. Set up an emergency fund

There are always those extra expenses that creep up on you unexpectedly: the emergency dental work, the spontaneous engagement present, the flat tyre…

"Try setting aside $20 a week for a 'rainy day' fund," suggests David. "That way, your savings won't take a hit every time something unexpected happens.

3. Pay credit cards monthly

"When they offer rewards or frequent flyer points, credit cards can be a good way to get something for nothing – but they're only for the super disciplined," says Damien.

"Paying off your credit card in full every month could save you thousands of dollars in interest a year, so it's worth setting up a direct debit to help you avoid living beyond your means."

4. Pay big bills annually

It can sometimes seem overwhelming to pay major expenses, like your car rego or contents insurance, in one lump sum. But it could save you some serious dollars.

"You always pay for the privilege of paying monthly – and it can be up to 10% extra," says David.

"Instead, divide the cost of your annual premium by 12 and set that amount aside each month in anticipation for next year's payment. You're effectively still paying it monthly – just without the additional cost. Plus, you'll earn interest as your funds accumulate."

5. Review your budget

Once you've cracked your budget, make sure you block out some time to review how you're tracking after three months and every quarter thereafter.

"Calculate your projected savings and if you haven't met your targets, it gives you an opportunity to deep dive into why," explains David. "Then, you can make some changes, so that your figure is more attainable."

If you’re still feeling like you need a hand, speak to a financial planner. Seeking professional advice can help you set attainable goals and put you on the right track to achieving them.

And if you're saving more than you expected, well, maybe you can start treating yourself to the morning flat white again.

Footnotes

1 https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook46p/CostLiving

Staff Writer

Staff writers come from a range of backgrounds including health, wellbeing, music, tech, culture and the arts. They spend their time researching the latest data and trends in the health market to deliver up-to-date information, helping everyday Australians live healthier lives. This is general information only and is not intended as medical, health, nutritional or other advice. You should obtain professional advice from a medical or health practitioner in relation to your own personal circumstances.

Disclaimer:
Copyright © 2022 AIA Australia Limited (ABN 79 004 837 861 AFSL 230043). This is general information only, without taking into account factors like the objectives, financial situation, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, medical, nutritional, health, fitness or other advice. The source information of the articles is current as of the date of publication and may be subject to change. While the information contained herein is believed to be accurate, AIA Australia expressly disclaims any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from, the information.

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