Saving Money is something we all know we should do on a regular basis. Whether we do it or not is another story. Considering the average Australian earns around $1100 per week, we are roughly looking at a monthly pay cheque of around $3000 to $4000 for a full time worker.
The reasons to save money can be from a number of different angles, some will argue it’s just the given thing to put away a certain percentage of their pay cheque for the ‘rainy day’ fund. However, a number of other reasons beg to be acknowledged as better ways and reasons to save a percentage of each pay cheque for the purpose of creating real wealth.
Consider savings a certain percentage, we all know that everyday living is expensive, so try to put away an amount that you can personally handle. For instance per month try and put away 15% of your $3000 pay cheque.
By doing this, you are saving $450 per month, and $5400 per year.
Regular Savings Plan
Now that you have extra savings, what are you meant to do with it you may ask? Well, consider a number of these options below, and ensure that your money works for you to create wealth, rather than sitting stagnant in a bank account.
Consider investing in shares
This can be easily done through setting up a Share Trading account to your existing Bank Account. Set yourself a goal that every $5000 dollars you save, you will purchase a set of shares of equal value. Blue Chip shares are advised, such as Banks, Corporations and other large sectors.
Get a high interest bank account
Most banks provide them these days, and the offer competitive interest rates to make your idle money work harder for you while you decide what to do. An example of this would be a Dragon Direct account with St.George or an ING account with ING Direct; they both offer around 6.25% p.a on your cash savings. Over 12 months this would equate to over $400 profit from your idle money, meaning your money has made you $400 by doing nothing more than sitting in an account. Read more about a high interest bank account.
Rainy Day Savings Account
The old, put a dollar away a day trick so you’re prepared for when the money isn’t coming in as fast. This idea is not a bad one; some people just like to save so they feel secure which is 100% understandable. Most would suggest however that if you were to do this, ensure you use a high-interest savings account, how can refuse an extra $400 for free right?
Education is something you cannot put a price tag on; it is something that can never be taken away from you. The more you have a passion for learning, the more doors and opportunities will open for you in life. Consider using your savings for that future MBA, Masters of Business or new Tafe Diploma that is relevant to your job. Further refining your skills can be a solid investment of your money, as it will help you, in the long run, acquire skill sets that are above that of your colleagues.
Property and Home Investments
Considered that the Australian property market is booming, each day that ticks by will make it that much harder for anyone wishing to buy in. Consider setting a goal for yourself to put together a first home deposit or the down payment on an apartment. The sooner you can buy in, the easier it will be in the long run. An example of how this could create you wealth is by buying an apartment, getting a mortgage on it and then renting it out. Using the rent money to pay the mortgage along with your own money will allow you to make double repayments per month (depending on the price of the property), which will significantly cut down the time it takes to pay back.
Of course, not all of the above suggestions are suited to everyone, but hopefully it has given some insight into the fact that money needs to work for you to establish wealth, and should always have a set objective or purpose to accomplish for you.
Any other suggestions on what to do with your Savings? We would love to hear, so feel free to drop us a line in the comments below.
What reason do you have for saving money regularly?
Tell us below in the comments section.