Saving

[bulldogsfan]

Here's something that might help just read about the ING Direct cashback card. https://getpocketbook.com/blog/2013/01/15/free-money/

Anyone use it?

 

[pie chucker]

OK my view is that at some point of your life you have to sacrifice. Whether it's when you're 20, 40 or 70....

I'm 40 so will put my point of view across from middle aged perspective.

The fact is compounding interest or growth works over time. An appreciating asset is much more valuable bought at 20 then 40. So a house, shares, ING account is more valuable when bought at 20. The other fact is a mortgage never increases, rent does. Mortgages go up and down depending on interest rates but an $1800 a month mortgage looks better and better after a decade. When I got my mortgage, I earnt half of what I do now.

Also buying a house in your 20's gets easier as your income is at an all time low. It can really only increase with better experience and maybe education. Therefore just because you buy a house at 20 doesn't mean you have to wait until you're 60 to travel.

I bought a house in my late twenties. I guess I had 2 maybe 3 years of no travel. 10 years later, I travel overseas every year, have plenty of spending money, etc

From experience all my friends that bought houses when they were younger are far far better off than those that didn't. I'd hate to be 40 still renting. Even worse 70 renting living off a pension and not being able to heat your house. One of my best mates is 40, never bought a house as he spent a house deposit on travel over 10 years ago. He regrets it as now he can't get into the market. We're planning a trip to Canada and America and he is struggling to save. let alone driving a dump of a car.

So yes you don't want to sacrifice your younger years too much but I cannot stress how important it is to have one eye on your financial future as it takes you 20 to 30 years to set yourself up. Waiting until you're 40 to do this makes it very hard.

Anyway don't want to preach. You still need to enjoy life but getting a mortgage still means you can. I found that once I got a mortgage I got mates over for BBQ's as opposed to going out for big nights. Stuff like that helped saving money.

Good luck

 

[Keystone agony]

Is ING the best savings account you can get? Im 20 looking to start with 5k in there and add roughly $600 per fortnight into that account, ive already used the calculator and after 12 months will end up with around 22k if all goes to plan

 

[sabre_ac]

OK my view is that at some point of your life you have to sacrifice. Whether it's when you're 20, 40 or 70....

I'm 40 so will put my point of view across from middle aged perspective.

The fact is compounding interest or growth works over time. An appreciating asset is much more valuable bought at 20 then 40. So a house, shares, ING account is more valuable when bought at 20. The other fact is a mortgage never increases, rent does. Mortgages go up and down depending on interest rates but an $1800 a month mortgage looks better and better after a decade. When I got my mortgage, I earnt half of what I do now.

Also buying a house in your 20's gets easier as your income is at an all time low. It can really only increase with better experience and maybe education. Therefore just because you buy a house at 20 doesn't mean you have to wait until you're 60 to travel.

I bought a house in my late twenties. I guess I had 2 maybe 3 years of no travel. 10 years later, I travel overseas every year, have plenty of spending money, etc

From experience all my friends that bought houses when they were younger are far far better off than those that didn't. I'd hate to be 40 still renting. Even worse 70 renting living off a pension and not being able to heat your house. One of my best mates is 40, never bought a house as he spent a house deposit on travel over 10 years ago. He regrets it as now he can't get into the market. We're planning a trip to Canada and America and he is struggling to save. let alone driving a dump of a car.

So yes you don't want to sacrifice your younger years too much but I cannot stress how important it is to have one eye on your financial future as it takes you 20 to 30 years to set yourself up. Waiting until you're 40 to do this makes it very hard.

Anyway don't want to preach. You still need to enjoy life but getting a mortgage still means you can. I found that once I got a mortgage I got mates over for BBQ's as opposed to going out for big nights. Stuff like that helped saving money.

Good luck

It's hard to ignore posts like this that talk about real life experiences.

Just a few quick questions, when you purchased your first house what multiple of your income at the time was it? Your mate who can't get into the market, is his job (earning capacity) similar to your own?

I'm all for having one eye on the future financially, allot of life's success comes from discipline and and delaying satisfaction.

 

[RobV]

Is ING the best savings account you can get? Im 20 looking to start with 5k in there and add roughly $600 per fortnight into that account, ive already used the calculator and after 12 months will end up with around 22k if all goes to plan

I Use UBank, UBank offers 4.61% if you setup an ASP of more than $200 a month.

ING only offers 3.75% if you deposit more than $200 a month, they have a bonus rate of 4.75% but it only lasts 4 months.

Bankwest offers a 4.80% for 6 months and then 3.25%.

Rams offers 5.01% with $200 per month deposited but you can't withdraw.

Check this site for more info http://www.infochoice.com.au/banking/savings-account/online-savings.aspx

 

[Keystone agony]

I Use UBank, UBank offers 4.61% if you setup an ASP of more than $200 a month.

ING only offers 3.75% if you deposit more than $200 a month, they have a bonus rate of 4.75% but it only lasts 4 months.

Bankwest offers a 4.80% for 6 months and then 3.25%.

Rams offers 5.01% with $200 per month deposited but you can't withdraw.

Check this site for more info http://www.infochoice.com.au/banking/savings-account/online-savings.aspx

Im all new to this so mind my ignorance naive thoughts

But no bank can legally stop you from withdrawing is that correct in regards to Rams?

Also say i go with Bankwest for 6 months can i withdraw after that then go to another bank?

Also i thought ING did 5% then after 4 months its 4% (for first time bank openers with them or something?)

I will get the 200$ a month easily so no probs there

I have heard Ubank is quite good. Ill have a look more into but if you could answer those questions or anyone else that would be greatly appreciated.

 

[RobV]

Im all new to this so mind my ignorance naive thoughts

But no bank can legally stop you from withdrawing is that correct in regards to Rams?

No prob, always good to see people wanting to start saving.

No rams can not stop you withdrawing your money. I should of explained my self better.

The deal with RAMS is the standard interest rate is 4.21% but if you deposit $200 or more a month and make no withdrawals then you will get a bonus 0.80% interest making your total interest 5.01%. If you withdraw out of the account or fail to deposit $200 then the whole month will stay at 4.21%.

Also say i go with Bankwest for 6 months can i withdraw after that then go to another bank?

Yep you can do that, most savings accounts are online so its easy to move money around if you wish.

Also i thought ING did 5% then after 4 months its 4% (for first time bank openers with them or something?)

I'm just going by what I found on the ING website which states 4.75% for 4 months and then 3.00% with a bonus 0.75% for increasing your balance by $200 per month.

If you can find where your seen the 5% interest offer then look for a promo code and enquirer with ING about it.

I will get the 200$ a month easily so no probs there

I have heard Ubank is quite good. Ill have a look more into but if you could answer those questions or anyone else that would be greatly appreciated.

Just another thing, When you setup the ASP(Automatic Savings Plan) set it up from your bank side as it will clear quicker than setting it up from the saver side.

example of that: send funds from your NAB account to your ING account.

 

[pie chucker]

It's hard to ignore posts like this that talk about real life experiences.

Just a few quick questions, when you purchased your first house what multiple of your income at the time was it? Your mate who can't get into the market, is his job (earning capacity) similar to your own?

I'm all for having one eye on the future financially, allot of life's success comes from discipline and and delaying satisfaction.

My mortgage was about 5 x my salary. It is now heaps less and I've re mortgaged to buy another property.

I earn more than my mate but when he was 30 he spent $25k on a new car. At that time houses were about 200,000 so he had a deposit. He now regrets that decision.

It's easy to look back and suggest changes.... I wouldn't have bought a money pit of a car (HX statesman). That car cost me about $30k. I should have bought a house. I probably wouldn't have listened to anyone at the time but I wish someone would have told me.

 

[JHF1870]

OP is fairly old, but in general from my saving experience

I just pulled out $511.7 from my savings in only 3 months

What I did was everytime I bought something with cash, I put away all the coins, $5, and $10s. Occasionally a $20 and even a $50 and forgot about it. If I wanted to buy something, I'd say no, get that money and put it away and forget about it, as if I had actually spent it. I also made a sacrifice on soft drink, and put that money away.

The golden rule is, you don't touch the stash for a given time period. It forces you to tighten your wallet when you realize money is light on.

Alternatively you could do the same but add that money straight to a non withdrawl account, for safety fire/theft etc.

Making a simple sacrifice like, riding your bike for 20km a week, could offset money for your savings.

Pay tv (remove a channel)
no junk food ( Helps with health too)
downgrade internet/mobile plan
not buying the newspaper (news is mostly shit anyway)
sticking to a policy on airconditioner and heater useage.

All of these rules require some level of discipline however.

I would rather spend money on cheap shoes/clothes etc and keep things simple, and spend my money wisely on worth while things, like holidays and essential things, than to waste it on shit.

 

[sammm]

OP is fairly old, but in general from my saving experience

I just pulled out $511.7 from my savings in only 3 months

What I did was everytime I bought something with cash, I put away all the coins, $5, and $10s. Occasionally a $20 and even a $50 and forgot about it. If I wanted to buy something, I'd say no, get that money and put it away and forget about it, as if I had actually spent it. I also made a sacrifice on soft drink, and put that money away.

The golden rule is, you don't touch the stash for a given time period. It forces you to tighten your wallet when you realize money is light on.

Alternatively you could do the same but add that money straight to a non withdrawl account, for safety fire/theft etc.

Making a simple sacrifice like, riding your bike for 20km a week, could offset money for your savings.

Pay tv (remove a channel)
no junk food ( Helps with health too)
downgrade internet/mobile plan
not buying the newspaper (news is mostly shit anyway)
sticking to a policy on airconditioner and heater useage.

All of these rules require some level of discipline however.

I would rather spend money on cheap shoes/clothes etc and keep things simple, and spend my money wisely on worth while things, like holidays and essential things, than to waste it on shit.

whats your policy on the aircon? and heater usage?
I personally cannot stand being cold, so pmy gas bill is very high in winter.

 

[JHF1870]

whats your policy on the aircon? and heater usage?
I personally cannot stand being cold, so pmy gas bill is very high in winter.

I haven't set one for myself as I have other sacrifices.

But I'm a believer of more blankets at night, and rugging up in the lounge, rather than heating. I rarely use the heater, but I have a fireplace, so I use that when I need.

ITs a tricky one for my hose, as its a double brick. I guess if it goes over 32 in the house I'd consider putting it on. My house has a 7degree differential on a hot day, but gets closer the outside temp the longer the heatwave. I guess setting a limit, so that you minimize its usage, and save it for the most needed times.

 

[TheKanga]

Been reading through the thread, some great advice.
It's motivated me to start saving time to get serious and spend money wisely.
Sick of living week to week

 

[alex_is_on_fire]

Don't know if it's been said but every fortnight (paid every fortnight) I get the bank to automatically deduct 15% of my salary. That's normally about $250 each fortnight.

That then goes into an internet savings account.

Because it comes out every fortnight, I budget for it and it becomes an expense that I don't miss.

 

[pie chucker]

OP is fairly old, but in general from my saving experience

I just pulled out $511.7 from my savings in only 3 months

What I did was everytime I bought something with cash, I put away all the coins, $5, and $10s. Occasionally a $20 and even a $50 and forgot about it. If I wanted to buy something, I'd say no, get that money and put it away and forget about it, as if I had actually spent it. I also made a sacrifice on soft drink, and put that money away.

The golden rule is, you don't touch the stash for a given time period. It forces you to tighten your wallet when you realize money is light on.

Alternatively you could do the same but add that money straight to a non withdrawl account, for safety fire/theft etc.

Making a simple sacrifice like, riding your bike for 20km a week, could offset money for your savings.

Pay tv (remove a channel)
no junk food ( Helps with health too)
downgrade internet/mobile plan
not buying the newspaper (news is mostly shit anyway)
sticking to a policy on airconditioner and heater useage.

All of these rules require some level of discipline however.

I would rather spend money on cheap shoes/clothes etc and keep things simple, and spend my money wisely on worth while things, like holidays and essential things, than to waste it on shit.

Great advice. You have to make sacrifices somewhere as it's easy to spend your money on all sorts of stuff. Actually the mates I have (I'm 40) with no money have better stuff then me. As they are always buying on credit.

I like nice clothes so sacrifice on other things. I still drive an average car and don't have pay TV. If Collingwood is not on free to air I go to the pub or a mates place.

This sounds dumb and I surely don't need to do it but I save every gold coin I get. In a few years I have a few thousand dollars saved. I don't miss that money as I'd just spend it on more shite, but it sure adds up. I use that money on a new bike every few years!

 

[TheKanga]

Opened up a online savings account with high interest like mentioned in this thread.
Will use my normal account and debit account for everyday things & bills.
Starting next week going to put away $20-50 every week and see how much i can build it up.
Never had money just sitting in an account before so i imagine it would be quite liberating.

 

[jaymasha]

Opened up a online savings account with high interest like mentioned in this thread.
Will use my normal account and debit account for everyday things & bills.
Starting next week going to put away $20-50 every week and see how much i can build it up.
Never had money just sitting in an account before so i imagine it would be quite liberating.

Most banks and such will offer good rates for new customers, particularly on interest accounts. Might be worth your while changing it up ever 6 months or so



Sent from my iPhone using Tapatalk

 

[sammm]

Opened up a online savings account with high interest like mentioned in this thread.
Will use my normal account and debit account for everyday things & bills.
Starting next week going to put away $20-50 every week and see how much i can build it up.
Never had money just sitting in an account before so i imagine it would be quite liberating.

You gotta start somewhere. Thats how I originally started saving.

Sent from my GT-I9100T using Tapatalk

 

[jaymasha]

Not sure if this will be help to anyone, but anyway:

I have an account I use for everyday purchases (train fare, food, bills etc) and another that links into a term deposit.
If the balance in the everyday account reaches about $600 (or anything higher), i'll put $400 into the account that links to the term deposit. This forces me to seriously tighten up my wallet while still leaving enough for said purchases

 

[Scotland]

If your balance is $600 and you transfer $400 that leaves you with $200 spending money. What happens if your car radiator and water pump pack it in for example and you're hit with a $1000 bill? Can you get at the term deposit?

I have a home loan so having a term deposit or any sort of savings account is pointless in my circumstance. I have my 'savings' offset to my home loan. I get paid $100 or $1000 or $10000 or whatever and it effectively reduces my home loan principal by that amount. I spend $50 or $500 or $5000 or whatever and the principal effectively increases by that amount.

 

[sammm]

If your balance is $600 and you transfer $400 that leaves you with $200 spending money. What happens if your car radiator and water pump pack it in for example and you're hit with a $1000 bill? Can you get at the term deposit?

I have a home loan so having a term deposit or any sort of savings account is pointless in my circumstance. I have my 'savings' offset to my home loan. I get paid $100 or $1000 or $10000 or whatever and it effectively reduces my home loan principal by that amount. I spend $50 or $500 or $5000 or whatever and the principal effectively increases by that amount.

I think that only works if you can seriously save and not spend what is in the offset account. If you are unsure then do what Scotland does. It does work.

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[JohnW]

I think that only works if you can seriously save and not spend what is in the offset account. If you are unsure then do what Scotland does. It does work.

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Any one with a home loan should do this, offsetting/reducing your mortgage is effectively tax free earnings.

But instead you could look at paying the money into the loan not just parking it in an offset account. This means it wont be readily available , but could be accessed if needed (you would have to go to the bank and get them to process the withdrawal and may cost) (there are some minor disadvantages with this regarding your PPR becoming an investment property).

You then keep your day to day money and day to day savings in an offset account, that is readily available.

This means all your money will be offsetting your mortgage (tick), with a portion being accessible (tick) and the other portion being available in emergency, but restricted enough to stop impulse buying (tick) (this could change depending on home value etc).

 

[jaymasha]

If your balance is $600 and you transfer $400 that leaves you with $200 spending money. What happens if your car radiator and water pump pack it in for example and you're hit with a $1000 bill? Can you get at the term deposit?

I have a home loan so having a term deposit or any sort of savings account is pointless in my circumstance. I have my 'savings' offset to my home loan. I get paid $100 or $1000 or $10000 or whatever and it effectively reduces my home loan principal by that amount. I spend $50 or $500 or $5000 or whatever and the principal effectively increases by that amount.

The term deposit i have allows me to withdraw without incurring any penalty as such. But as you mentioned, a term deposit isn't for everyone. I'm quite lucky, i still live at home (studying at uni) and my parents allow me to use their cars, generally to commute to work, which is close to home anyway. Obviously people have different needs and will (hopefully) budget accordingly. If I know there is a large bill upcoming (mcc membership etc) then i'll allow for a little extra in the everyday account to pay for it.

 

[Scotland]

Any one with a home loan should do this, offsetting/reducing your mortgage is effectively tax free earnings.

Yep, this is exactly why I do it and why I recommend it. A penny saved is a penny earned and all that.

But instead you could look at paying the money into the loan not just parking it in an offset account. This means it wont be readily available , but could be accessed if needed (you would have to go to the bank and get them to process the withdrawal and may cost) (there are some minor disadvantages with this regarding your PPR becoming an investment property).

Yep, I do interest only & offset vs redraw because I intend to turn my primary place of residence into an investment property in the next few years and it will make it easier.

If you're bad with money and living week to week I wouldn't recomment an interest only loan, however. The forced saving of run of the mill principal and interest loans is good for some people.

 

[JohnW]

I was mainly referring to the tax deduction issues that arise if you don't use an offset account and turn a PPR into an investment property.

 

[JHF1870]

I've been burning money over the last 18 months, and at a time when I'm supposed to be more disciplined than ever.

For a number of reasons I'm going to challenge myself to see how little I can live off. And how much I can save.

1. No fast food
2. No soft drink
3. take public transport instead of driving
4. pay the last $500 on my credit card.
5. See if I can get better insurance deals
6. Not buying food and drinks at the footy
7. Pay bills on time instead of being lazy.
8. Possibly sell some unwanted stuff to get rid of the car loan, which is probably the next major economic goal.


I've heard of people eating for $2 per day, but that seems extreme. It will be interesting to see how it goes, given I workout three times a week. Its kind of disappointing how much money I've wasted particularly on things I shouldn't have spent money on and how easy it was to do. If I did things right I could be well ahead right now and be looking at some investment opportunities.