According to a recent survey by ME Bank, many of us are concerned about having a lack of cash savings and more than one in three of us would struggle to come up with $1,000 cash if required.
Although savings rates are hovering at their highest levels, around 10%, there are still a large proportion of us who struggle to consistently save.
Let’s face it, it’s much more fun and motivating to save for an overseas shopping spree or your dream car but it’s just as important to create a steady savings plan to ensure you have a buffer of savings in case you need to call on it unexpectedly.
I know you’re thinking insurance will cover you in a real emergency and that may be the case but having your own stockpile of cash is far more practical, accessible and cost effective.
Here are some things to get you started when planning your saving for a real rainy day fund:
- If it’s easier for you to separate your savings by goal, open a savings account for each one – with so many fee free savings accounts on the market, this will maintain your good intentions without paying for it.
- Set up an automatic savings plan whereby small amounts are taken from your salary and directed to each of your savings accounts.
- Make sure you’re getting a good interest rate on your savings. A lot of providers offer very high introductory rates that drop after a few months. Mozo compare over 175 savings accounts which are broken down by promo rate, standard rate, fees, etc. so you know exactly which account will give you the best deal in the long term.
The ME Bank survey was conducted in June 2014 and is based on a survey of more than 1,500 Australian households.