One third of all Australians do not know how much money they should save, new research has revealed.
According to Mortgage Choice's annual whitepaper: The Evolving Great Australian Dream, 29.4% of Australians said they didn't know how much money they should be saving from their regular pay cheque.
Unfortunately, this statistic isn't surprising. Australians are, fundamentally, very financially savvy. They know they should be saving a specific amount of their regular pay cheque, they just don't know how much that should be.
The reality is, we all want to save money, but many of us don't know where to start or how to become good savers.
So, what does a confident saver look like and how can you become one?
A confident saver has a budget
Behind every great saver is a great budget. This is the key ingredient to saving money effectively, as it allows savers to monitor how much is going out and coming in. Having a budget helps confident savers identify expenses they may be able to cut back on and to adapt to any financial changes, such as unexpected bills or large purchases.
A confident saver has a goal
A good saver will always have a goal in mind for their finances and this will inevitably motivate them to save and make good financial decisions. Goals can be as simple as saving for a gift, or something more significant, such as saving for a home deposit or a holiday.
A confident saver does not spend beyond their means
With a budget and a goal, a strong saver can still enjoy their money and not feel guilty about the odd splurge here and there. They will have set aside a portion of their income as an allowance and they are disciplined with the way they spend their money. It could mean they will say no to one purchase in order to afford another.
A confident saver pays off their credit card on time and in full
Credit cards are a convenient way of paying for things, but they can be a trap for some people. A confident saver is able to utilise a credit card without falling into debt by spending within their limit, and paying off their whole bill on time each month.
A confident saver puts their money into a different account
A good saver will always place their savings in a savings account that is separate from their everyday transaction account. This prevents them from spending money recklessly, and encourages regular saving habits. Savings accounts typically have a higher interest rate, allowing a person to earn more interest each month.
A confident saver is always reviewing their goal and budget
Saving money is always a work in progress, so a confident saver will regularly be reviewing their budget and their goals. If necessary, they'll make adjustments so that their saving strategies are relevant to their current financial situation.
You don't need to be a financial genius or a mathematical mastermind to be a confident saver. You just need to know your limitations, be able to control your spending and set clear goals for yourself.