Key rea­sons why your sav­ings are go­ing back­wards

Wangaratta Chronicle - North East Regional Extra - - News -

AC­CORD­ING to a new ME sur­vey, over a third of Aussie savers have failed to ‘keep their sav­ings on track in the past 12 months’.

Right now is the ideal time to check your sav­ings progress, and if you’re slip­ping be­hind, you could be fall­ing into one of the five traps re­cently iden­ti­fied by 1500 Aussie

savers.

Trap 1: You’ve been thrown a curve­ball Of those un­able to sus­tain their sav­ings mo­men­tum, the top rea­son cited in ME’s sur­vey was due to an ‘un­ex­pected event or emer­gency.’

Alarm­ingly, only half of Aussie savers (46 per cent) re­ported to have emer­gency sav­ings in place to cover things like a job loss, un­ex­pected med­i­cal ex­penses or prop­erty re­pairs.

“These find­ings are con­cern­ing as emer­gency funds should be one of peo­ple’s top pri­or­i­ties,” said ME head of De­posits and Trans­ac­tional Bank­ing, Nic Emery.

“It re­duces the risk of in­creased debt when faced with a fi­nan­cial emer­gency and helps you main­tain your sav­ings mo­men­tum,” he said. “Get started with an emer­gency sav­ings ac­count. “Add a lit­tle to your slush fund on a reg­u­lar ba­sis, and en­joy peace of mind know­ing that a sur­prise bill doesn’t have to be a fi­nan­cial shock.”

Trap 2: You set the bar too high “Aim­ing to save too much too fast can be a recipe for dis­ap­point­ment,” adds Emery.

“By this stage of the year you prob­a­bly have a good idea how much you can com­fort­ably set aside from each pay. “Use this as a guide, and work to­wards a re­al­is­tic goal.”

Trap 3: Re­al­ity caught up with your bud­get “If over­spend­ing on bud­geted items is hold­ing you back from your sav­ings tar­get, re­view your spend­ing look­ing for ways to save. Plenty of apps are avail­able to help track your spend­ing.

Trap 4: You’re giv­ing in to ‘re­straint bias’ “Re­straint bias de­scribes the sit­u­a­tion when some­one wants to save, but gives in to temp­ta­tion when they see, say, a bril­liant new out­fit on sale.

“We all have lim­ited willpower and the eas­i­est way to curb re­straint bias is to au­to­mate your sav­ings by set­ting up a trans­fer of funds each pay day.”

Trap 5: You’ve lost your sav­ing mojo “Sav­ings goals you set in Jan­uary may be los­ing their lus­tre.

“Reignite your sav­ings mojo by break­ing down longer term goals into short term tar­gets.

“If sav­ings burnout is be­com­ing a real pos­si­bil­ity, take a short break, re­vi­talise and hit the ground run­ning with your sav­ing goals re­freshed.”

UN­SURE: There can be many traps that ham­per sav­ings ef­forts.

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