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You’ve heard it before: saving is necessary! You probably have a savings account that you move money in and out of. But when do you transfer out of it? What are you saving for? We’ve got a simple system that will help you organise your savings into three accounts, and will give you a better chance at achieving your saving goals.
This account will be the account with the least money in it, where you will draw from if on a weekly to monthly basis. This could include money for a nice dinner, a few drinks, or a day at a theme park. This is the account you will put leftover money into each week, or small amounts of money that you didn’t expect. Maybe you found $50 in an old wallet during a closet clean out, or perhaps you sold a table of Gumtree for $40. Deposit the money and move it to this account so you can enjoy a small treat on the weekend.
This is the account you will deposit into for holidays, and big purchases like home renovations or a car upgrade. You should avoid drawing from this account unless you are ready to make the purchase you have been saving for. Deposits into this account may take precedence over your ‘now’ account, depending on what your savings goals are. This account is the perfect place to transfer special bonuses or birthday money into. It could also be the account you move any ‘extra’ money you may get from side jobs or smaller tasks.
This account is for long term savings, where you will deposit money from each pay cheque. This account will be for purchases such as a mortgage down payment, retirement, and the like. This account should not be drawn from regularly. We would recommend using a special savings account for these funds. There are many accounts available at different banks countrywide that require you to go in to a branch in person to draw money from them. Doing this provides a barrier for yourself, and can be useful if you find you are always drawing out of your long term savings unnecessarily. You will ideally be making scheduled deposits into this account every time you get paid. It may suit you to make this deposit part of your monthly budget, and have the payments already automated. This will mean you don’t have to think about this money before it’s already gone to your long term savings account.
Setting up three separate savings accounts can help you prioritise your savings goals, and will help keep you accountable with your spending. It may also be of assistance if you find you are often withdrawing money from your long term savings account when you don’t want to be.
Beyond Debt is a trading name of DCS Group Aust Pty Ltd. Australian Credit License: 382607. RDAA Number: 1126. PO Box 3074 Newstead, QLD, 4006.
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