Change SPENDING HABITS AND SAVE
net close to $7050 over five years. If you usually drink two coffees a day, this figure will be closer to $14 120 — a substantial sum in anyone’s book.
• • • Mr Larber encouraged parents to teach their children, from a young age, how to manage money and prepare them for the financial challenges of adulthood.
• “In a time of credit cards, internet banking and online shopping, children don’t often see people buying products with physical money like notes and coins,” Mr Larber said.
• “Not seeing money exchanged for purchases makes it harder for kids to get their heads around what things cost. “Giving kids pocket money is also a great opportunity to teach children the value of money and help them understand about saving, spending and donating.”
For more tips go to
www.moneysmart.gov.au udgeting is the most effective way of managing your money and ensuring that you spend less than you earn, but preparing a budget and sticking to it can be easier said than done. Australian Securities and Investments Commission MoneySmart website offers practical tips, easy-to-follow advice and simple strategies to help you save money. ASIC MoneySmart senior executive leader Miles Larber said setting savings goals could be exciting, and once a regular savings plan was started it could be surprising how much could be achieved. Mr Larber said whatever the circumstances, it was never too early to start saving, no matter how small the amount that could be put aside. He encouraged people to “pay themselves first” by having savings deducted from their pay or benefits, and to keep a separate savings account, preferably with a competitive interest rate and no ATM or EFTPOS access, to prevent them from dipping into it when they’re tempted by an impulse purchase. “Add in your windfalls, try to save any pay rises, bonuses or tax refunds,” Mr Larber said. He said small changes could make a big difference to a person’s bank balance, and by changing one thing they did regularly, they could save money. Mr Larber suggested: Give up drinking coffee or cut down on alcohol — it might sound scary but it will save you money and can have health benefits; Make your lunch at home; Have people over for dinner rather than going out, and ask everyone to bring a plate of food to share; Borrow books and DVDs from the library; Lock-up your credit card for a month and only pay for things with cash; Set a limit for birthday and Christmas presents or give homemade gifts. “Not many people consider how much small purchases can add up over the longterm. Take, for example, a cup of coffee; many people purchase one a day, and some buy two or more,” Mr Larber said. “If we assume the average price for a cup is around $3.50, this adds up to an annual cost of close to $1280 or an eye-watering $2560 if you choose to buy two. “A daily deposit of $3.50 with interest compounded monthly at 4 per cent will
B “Take the time to consider other seemingly small, frequent purchases such as chocolate, gum, or bottled water and you will soon realise this can lead to big savings in the long term.”