We all have good intentions when it comes to savings, but sometimes it’s easier said than done to put aside a few dollars with every pay check. Unfortunately, over the last few years, there has been a steady decline in the household personal saving ratio for Australians. In fact, this year it dropped to 2.3%
However, there’s no cause for alarm! If you’re worried about your savings, there’s no time like the present to make a start. For those who are struggling when it comes to financial willpower, here are a few reasons to prioritise saving:
In the event that you might owe some tax at the end of the financial year, it’s always nice to have some money put aside already. Some people have a set percentage of their income that they keep safe from shopping sprees, while others play it by ear. Either way, some cash cushioning can help you stay up to date come tax time.
While your business is ideally booming month to month, there can be some periods where income is a little less than usual. While your incoming numbers may be lower, your outgoing is probably going to remain the same, so it’s worth having a resource to dip into during the slower months.
As much as to-do lists and calendars can help you stay organised, life does have a way of throwing curveballs from time to time. Extra cash will be a godsend in cases like unexpected illness, or a more positive surprise, like accelerated company growth.
So now you know why you should save, how do you make a start?
It seems obvious, but the first step to assessing how much you can save and how to go about it is: making a budget. The important thing to consider here is to keep the budget realistic. Don’t get too extreme and plan to live life like a monk. No going out, no exciting foods, no fun might be a great way to save money, but it’s also extremely unsustainable. It’s the same logic with New Year’s resolutions. If you need to change your life completely just to fit the budget, then it is really unlikely you’re going to stick to it.
Before you get too far in visualising your nest egg, it’s important to take care of any existing debts you might owe. Starting with the smallest, work your way through the list until you can comfortably move forward in the savings process – without outstanding debt looming over your head.
Saving can be as straightforward as popping your loose change in a jar on the kitchen bench and hoping it adds up to a nice holiday by next year. However, there are ways you can make your money work for you and the easiest way to find out which options are right for you? Speak to an expert. Our financial planning team, Accumulus Wealth Advice, knows the ins and outs of investing and setting up a passive income, so it could really pay off (literally) to just pick up the phone and give them a call.
Interested in finding out more? Give us a call to discuss and start your rainy day fund today!