Hopefully by now you have decided what you are saving your money for, and so it’s time for you to actually get your ass into gear and start working to save that money. Right now, you’re probably wondering how the hell it is ever going to be possible to hit your savings goal when you’ve been dropping all your money stockpiling toilet paper in light of the coronavirus but, actually, now is the perfect time for you to be thinking about how you are going to save. These 3 easy steps are going to explain why separating your money is the key to saving your money successfully.
The first step on the way to savings greatness begins on everyone’s favourite day, pay day. I mean, come on, how good is pay day? It doesn’t matter if you’re collecting your new and improved Centrelink payments (thanks for the stimulus package, ScoMo) or you’re one of the lucky buggers still actually receiving a pay cheque from work – we are all going to be following the same money separation steps. As soon as my pay hits my account, all I want to do is hit the pub for a few cheeky beverages and look up the Jetstar flight deals to see if I can afford a plane ticket to anywhere-but-here. Not only is it bad news that this lockdown is keeping me from doing any of this, but the even worse news is that I make an abysmal amount of money anyway. So, unfortunately, if I were to sink a few beers and book a cheap trip to South East Asia, I would be eating two minute noodles and drinking instant coffee for the rest of the fortnight. That is why I use every ounce of willpower I can muster up and I separate my money as soon as the pay hits my account. If you want to hit your savings goal, you’re going to have to do this too. Below is a chart showing how I separate my money.
By clicking submit, you agree to share your email address with the site owner and Mailchimp to receive marketing, updates, and other emails from the site owner. Use the unsubscribe link in those emails to opt out at any time.
“So, what are these 3 easy steps that I need to follow on pay day?” – You
Good question, mate! – Me
1. Get Rid of the Money You Spend on Rent and Bills
The first thing that you have to do as soon as that pay hits your account is figure out how much of this money you actually need to dedicate to the boring things that we would all give an arm and a leg to avoid paying – rent, mortgage, bills etc. Get rid of this money first by transferring it into a different bank account so that you’re not going to be tempted to spend it when The Iconic sends you another email advertising the latest 30% off storewide sale. Personally, I send my housemate my share of the rent literally as soon as my pay lands in my account so that I completely forget that I ever even had that money. I then transfer my money allocated for bills into a separate online savings account which is then direct debited to pay for the gym, my phone, electricity and any other unexpected bills that might pop up.
2. Sign Up For A Better Savings Account
Once the boring stuff has all been taken care of, the next step is to transfer your savings money into a high interest savings account. It honestly blows my mind how many twenty-somethings don’t know how much interest they earn on their savings every month, and if this is you, then you need to bloody do something about this ASAP. High interest savings accounts are the dream because banks literally pay you money every month for doing absolutely nothing. Yes, that’s right. While you’re sitting on your couch in your pajamas, stuffing your face with Maltesers and binge-watching Netflix, the money in your savings account is earning you more money! So, why the hell is your money sitting in a low interest bank account earning you a measly $5 a month when it could be earning you hundreds a month?? Once you have transferred your allocated money into this savings account, you need to forget that this money ever existed. I’ll discuss some of my favourite savings accounts in an upcoming post, but for now, do some research on how much interest you are actually earning and figure out if there is a better option for you.
3. Use the Rest of Your Money to Treat Yourself
Your hard work is pretty much over, so all you have to do now is keep living your best young life while you’ve got it. Any money that you have leftover is the money that you are able to spend to treat yourself without ever feeling guilty about it. If you want to treat yourself to a new pair of sneakers, or take your partner out for dinner (maybe not in the foreseeable future though), or splurge on festival tickets, then you do you. Just promise me that you will buy whatever you want with this leftover money without feeling bad about it.
Obviously, there are some things you need to consider when working out how much money you are going to spend each week and these are just some examples:
- Don’t leave yourself with too little money that you have to scab essentials like toothpaste and milk off your roomies for the rest of the week
- You don’t HAVE to spend all of this leftover money (e.g. if you have an extra $20 at the end of the week then chuck that into your new high interest savings account)
- You should figure out ways to make this leftover money last you the whole week without dipping into your savings account (I’m aways posting tips on this on my Instagram page)
So, start working on setting up your money separation plan. I mean, what else have you got to do as you mooch around the house 24 hours a day in lockdown?
The Stingy Bitch
Based in Sydney, Australia.
Created in 2020.
This site and all of it’s contents are provided for entertainment purposes only and do not constitute personal financial advice. All products that are mentioned are general product advice only, not personal product advice. Not all options are presented and my opinions are subject to change. All content and posts have been prepared as a general summary only and is not intended to be financial advice with respect to any particular matter. This post should not be relied on with respect to any particular matter. If you have questions about any aspect of the content or this site or otherwise require personal financial advice, you ought to seek financial advice. The author disclaims liability to any person who relies on this post.
Do you have questions, comments or feedback for me? I’d love for you to get in touch!
Follow me on Instagram to be the first to know when my latest blog posts are released.