Case study: saving and a social life — how to make it happen
Learn how Alexis saved for her big overseas trip while still enjoying life.
Like most of her friends, Alexis, 22, has grand plans to see the world before settling into her career. Here’s how she managed her spending to reach her savings goals.
Living now vs future planning
Alexis, 22, is loving her post-university life. Working in her first full-time job and living at home, she has an active social life and loves that post-shopping buzz — but she’s also planning her first big overseas trip. She doesn’t want to end up with a large credit card debt, so she’s looking to save as much as possible before she heads off on her travels. How could she meet her savings goals while still living in the moment?
Breaking it down
To meet her goal, Alexis decided to restructure her bank accounts to align with her spending and savings habits. Initially she had just two accounts: savings and spending. As she progressed, she realised that breaking down her accounts even further motivated her to stay on track.
Alexis considered her spending habits, and structured her bank accounts to reflect those areas:
savings - “the Europe fund”
life - food, going out and transport
me - beauty products and the gym
Planning out your income
Each pay, her salary would go into her life account, before being moved across to the other accounts. “Fifty per cent automatically went into the Europe fund, and I divided the rest based on where I expected to spend it across the fortnight, “Alexis says. “If there was money left in one of the other accounts at the end of the month, I’d move it into my savings account.”
Getting to your goals quicker
Restructuring her bank accounts meant that Alexis could better manage her spending, which in turn meant she could reach her savings goal faster — while still enjoying her active social life.
Like Alexis, you might be looking to save for a big goal without sacrificing your lifestyle. Here are some things to bear in mind.
Tips for saving for your goals
Everyone has different needs and goals, so structure your accounts to suit your individual situation. You might prioritise saving for a house deposit, or a car, for example.
Life is a balancing act, and many people feel the pressure to get ahead. Creating accounts for the things you love in life — then using the funds for that purpose — can help to alleviate the guilt of wanting to enjoy life while you’re saving for a future goal.
When your salary hits your bank account it can be easy to feel instantly rich. To avoid splashing your cash all at once, one strategy is to “pay yourself” first. By directing a percentage or a fixed amount of income directly into your savings account, you avoid frittering away your hard-earned money on things you don’t need.
A credit cardcan be a convenient way to make purchases, particularly if you’ve already allocated for them in your spending plan. Tread cautiously though — you don’t want to rack up a big credit card debt.
If, like Alexis, you have a short-term goal, then choose a high-interest savings account — like our Active Saver or Freedom Saver accounts.
If your goals are slightly longer term — anything from one to five years, for example — and you’ve already saved some money, consider a term deposit. You’ll know exactly how much interest you’ll earn, and once the money is placed in the term deposit, you won’t need to do a thing.
Alexis says she “nerded out” on seeing her savings go up and up — her growing nest egg was enough to keep her on the savings straight-and-narrow. But if you’re likely to dip into your savings, consider locking them away so you can’t touch them. The Active Saver account can help boost your motivation to keep saving by giving you bonus interest if you don’t touch the funds.
Further help and information
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