When you’re still at university, saving for the future may not seem like a priority. That said, you will be graduating soon and preparing for financial independence will help you to transition into the next stage of your life and your career.
You’re probably more focused on making sure that there’s enough money in your savings account to pay rent, stay fed, and maybe have some fun with the money that’s left over. However, setting goals, making a plan, and actively contributing to your savings account will help you to make better decisions about your finances now, and in the next stage of your life.
Here are some tips to help you save for the future:
1. Set yourself a savings goal
The key to setting a savings goal is to make it realistic. If your goal isn’t achievable, it can be easy to lose your motivation to save. So, spend some time thinking about how much money you can realistically afford to put aside from your weekly budget.
2. Work out how much money you need
If you are saving for something specific - an overseas trip, further study, maybe a deposit for your first home - setting a realistic goal will be easier. Once you know how much you need to save, you can start to develop a plan.
3. Work out what you can live without
Do you really need that latte every day? Maybe you could treat yourself once a week instead. Do you have to buy your lunch on campus? Maybe you can bring leftovers, or make yourself a sandwich at home? Can you walk or cycle to where you’re going rather than driving? Can you catch public transport rather than a taxi? Remember, every little bit makes a difference.
4. Develop a savings plan
If you want to save $5 000 in two years, you need to develop a plan for how you’re actually going to save that money. How much can you afford to put away each week? Is it $10, $50 or $100? What do you have to give up in order to put that money away? Can you earn extra money? How much interest will you be able to earn? Think about it, and put it all in the plan.
5. Which savings account?
Setting up an account that is separate to your transactional account can help you reach your savings goal sooner. For example, setting up a term deposit will help reduce the temptation to access the money before you reach your goal. Different savings and deposits accounts have varying levels of interest, which is something to think about when selecting an account. An account with the option of an overdraft facility will give you access to credit, at minimal cost, should you need it.
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BOQ Specialist - a division of Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian credit licence no. 244616 (“BOQ Specialist”).
The information contained in this article (Information) is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided. We recommend that you obtain independent financial and tax advice before making any decisions.