It’s not uncommon to have a savings goal and find yourself falling short of where you planned to be. Pinching pennies and trying to reach those savings goals can often lead to feeling like you’re missing out and, on some occasions, result in a financial splurge. If this happens, don’t beat yourself up about it!
A helpful hint to avoid this cycle is to organise your money into separate accounts:
- For bills and expenses, you can either aim to prepay these or have an account set up for your cost(s) of living. This will allow you to monitor and control your payments. If you decide to set up a specific account, make sure you add to this on a regular basis, so you don’t suffer from bill shock when they arrive.
- Have a separate transactional/spending account that you top up with some ‘play’ money for social activities and entertainment.
- Set up an “emergency savings” account that you can withdraw from, when unexpected expenses pop up. This could be an offset account (if you have a mortgage), a high interest savings account, or an online account. Whatever works best for you! Your target amount to save should be a cash buffer if something unforeseen happens – maybe based on a portion of your regular savings which will vary from person to person. Aim to build this account up over time.
- Have another savings account set up that makes your money less accessible, this will help reduce the temptation to spend it. Consider a Fixed Term Deposit Account or an Online Savings Account. This account will create an additional safety net for your finances (if required). You should initially aim to save an amount that you won’t necessarily notice missing each week, such as $5 or $10. As you get better at budgeting you can increase the amount saved and watch it build up over time.
You can also try to sustain your guilty pleasures (such as shopping or indulging at an expensive restaurant) by taking a more financially savvy approach. This can be as simple as grabbing yourself a bargain from the thrift store or getting creative in the kitchen at home rather than eating out.
Finally, review your goals monthly and reassess if these frugal restrictions are worth what you’re saving for. Perhaps you need to re-evaluate your goal(s) and give yourself a more realistic time frame to achieve them. If you’re saving for a holiday or a car, you could also consider other ways to reach these goals. We have some competitive personal loans that could help put a halt to the financial FOMO.
Don’t forget we also offer Financial Planning services. If you feel you need some additional support or guidance with saving, investing and budgeting, book an appointment with one of our qualified financial advisers today.