At the heart of all good savings plans is planning and budgeting. But don't worry! This is not a hard process and it isn't always about making sacrifices.
The first step in budgeting is to write down all the income you receive.
Next, write down a checklist of your expenses. This can be a long process, but it's important that you include everything so that you can see your real financial position. If you use credit cards for some of your purchases, take a look at the last couple of statements to jog your memory on what you've been spending on.
Then you'll see how much money you have left to save. You might want to play around with the numbers and reduce some of your expenses, so your savings will grow quicker.
If you haven't saved much in the past, you may want to start with a small goal, and once you've achieved that you'll be well on your way to achieving a bigger goal. Here are some examples of how you can plan your savings:
Saving for a Holiday with an automatic savings plan: make regular savings.
Joan's goal is to save $5,000 to go on a holiday. Her budget allows her to save $100 a week, so it will take just under a year to reach her goal. She decides to set up an Automatic Savings Plan (ASP) and the money is automatically deducted from her linked bank account (which she uses on an everyday basis) into an ING DIRECT Savings Maximiser. She's also able to earn a high rate of interest while she is saving.
Savings Maximiser automatic savings plan
Saving for a Boat with a Term Deposit: lock your money away from temptation
Bob is saving for a boat that he wants to buy in about 12 months when he retires, and has already saved $30,000. He decides to transfer his money to a Term Deposit and lock away his money for a year to earn a high fixed rate of interest. That way he won't be tempted to spend it during the year.
ING DIRECT Term Deposits
Saving for a home: using a combination of savings options
Jo and Chris' goal is to save $35,000 to put down as a deposit on a home. Two years ago they opened a Savings Maximiser to earn high interest on their savings. Each time they reached $10,000 they moved their savings to a Term Deposit for a high fixed rate of interest and to lock away their money from temptation. Now they're getting close to reaching their goal, they're also looking for a straight forward mortgage that suits their needs.
ING DIRECT Term Deposits
If you want to learn the ins and outs of buying and selling property, have a look at our Mortgage hints & tips
Once you make a start with your savings, you're well on your way to achieving your savings goals. Resist the temptation to dip into your savings and time will work wonders for it.