Australians focus on ‘centsable’ saving

Not only are more Australians saving – we’re also saving more.

ME Bank’s latest Savings Intentions and Behaviours Report confirms that almost one in two (47%) Australian households are growing personal saving – with an average of $770 tucked away each month, up from $735 in mid-2014.

By contrast, 44% of households break even each month, and worryingly, 9% of households are spending more than they earn – overspending by $480 per month on average.

Households bypass budgets

There is no question that regular saving is a smart strategy. It provides emergency cash, gives us funds to achieve personal goals, and provides the benefit of additional interest income.

One strategy that can make it is easier to grow savings is to develop a system to shift spare cash out of an everyday account (where it is often as good as spent) and into a separate high interest savings account.

ME Bank found 47% of savers transfer money to a savings account when they have spare funds. One in five (22%) set up direct debits to automatically send money to a savings account, and a similar proportion (21%) take the opposite tack, putting all of their money into a savings account and drip-feeding cash to an everyday account when it’s needed. Amazingly, 14% of savers stash their cash in an everyday account where it’s unlikely to earn interest at all.

Quick steps to boost savings

If you’re hoping to grow personal savings this year, start by getting to know your spending habits. It’s a great way to identify areas where you can cut back.

Next, work out the method of switching cash to a savings account that suits you best, but do look for an account paying competitive interest. This will help to grow your honey pot over time. Finally, set a goal for your savings. It can be the ‘centsable’ incentive we all need to stay on track.

To learn more on boosting your savings, contact ME Bank call 13 15 63 or visit mebank.com.au.

Members Equity Bank Ltd ABN 56 070 887 679 AFSL and Australian Credit Licence 229500.

This content was provided by Members Equity Bank. The views expressed are not necessarily those of First Super. First Super has shares in Members Equity Bank.