Today is world savings day.
Do you include a savings allocation in your budget or do you simply accumulate excess cash flow at the end of your pay period? Whatever your savings method, here’s 5 ways you can make your savings work for you financially:
Cover the unexpected - Establishing an emergency fund can help to cover those unexpected costs. It could be simply a small amount to cover your insurance excess, in the event of a claim, or a larger amount to cover your expenses for 3, 6, 12 or 24 months.
There is no wrong or right amount, just the amount you are comfortable with. Accumulating savings in a separate account can help to minimise the impacts an emergency expense can have on your overall situation.
Achieving goals - Do you have something that you wish to achieve? A new car, a holiday, a deposit for new home or undertaking renovations?
Setting aside savings on a regular basis can help you to achieve these goals.
Reducing debt - For those who have debt, the unfortunate downside is the interest costs. Directing savings towards debts helps you to reduce the amount owing, in turn reducing the amount you pay in interest.
Building personal wealth - building wealth allows you to work towards building a residule income stream. Residual income streams can be used to help fund an increase in living costs, cover additional one off expenses or reinvested to continue to build your personal wealth.
Retirement Funding - Superannuation is a longer term savings opportunity that provides income in retirement. Adding savings to your superannuation, overtime, can help you to build capital to provide you with additional income in your retirement years.
The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.
