Saving and SpendingBasics of Banking

Do you have trouble saving? This part of the site will give you some neat ideas to help you save more.

One of the best things to do is separate your savings and spending, check out how Glenn does it.

How to save.

Aim for a goal

Create a budget

Delay spending

Top savings tips

Calculator

Whatever your age, it's easy to feel you never have enough money. And guess what? You'll always feel that way. Unless you get serious about saving! Saving is basically the only way to ensure you can afford to buy and do the things you want. Not just now, but in the future too.

The sooner you get into the habit of saving, the easier it will become, and the more money you'll have. So you won't need to worry about it so much. And that's a relief!

We can't promise to make you rich. But even if you follow half of what we suggest, you could have much more money than what you have now.

So start boosting your account balance now. Read the secrets of how to save.

How to save

We're not going to tell you that saving is easy. No one finds saving easy at first. But there are ways you can make it easier. And then it can become a habit, with powerful and lifelong benefits for you.

Aim for a goal. It's much easier to save if you've got something in mind. If you don't have a savings goal, saving can be like running a race with no finish line. Boring. And pointless!

You can have a couple of savings goals: one goal might be for something fairly cheap and that you could afford relatively soon; another might be for something much more expensive, that will require a longer period of saving.

Be realistic in what you're aiming for. Saving for that personal Boeing 747 you've always wanted could be a stretch.

Create a budget

Is your money always disappearing so that by the end of the week you never have any left to save?

Unless your bedroom is burgled each week, we strongly suspect you spend all that money on yourself. Bet you can't remember where it all goes!

Here's a tip. Get a piece of paper, and write down exactly what you spend it all on. Next to each item, write down the price. Now add it all up. We reckon you'll be surprised to see where it all goes.

Now that you've got your Chronic Spender sheet, get another piece of paper and write down the things you really need to spend money on each week. In other words, eliminate some of the yummy stuff. Now subtract this figure from the amount of money you actually get each week.

Congratulations! You've just created a Budget, which is the key to saving. The final figure will be the amount you can afford to bank, and save.

If there's still no money left to save, you're going to have to make some more decisions about what you spend your money on. You can also check out the Dollars and Sense Budget Planner.

Delay spending

Before you lash out with your cash, think hard about whether you really need that item. It can help if you leave the shop and go for a walk to think about it. Maybe even give yourself a day or week to mull it over. Take a cold bath if you need to. Take several!

The more times you make a considered buying decision, rather than an impulse purchase, the smarter a shopper, and better a saver you'll become.

Top savings tips

Expert savers use a great one called "Paying Yourself First". This means that when you get some money, you bank some of it immediately before you even think about spending it and thereby putting the money in someone else's pocket.

Read some more smart savings tips.

These smart tips can help accelerate your saving.

1. Make your own gifts
   We all love giving and receiving gifts but they can cost heaps. Make your own gifts and cards. People will appreciate the effort you put into them.
   
   
2. Junk the junk
   Is spending money on junk food really worth it? Those little treats add up. Even a dollar a day is $30 a month! Save that money and you'll have a healthier body and teeth, and a better bank balance.
   
   
3. Ditch the arcade
   Are you an arcade game junkie? Some kids can easily spend $20 in one quick visit. Imagine how that money could add up in a savings account.
   
   
4. Keep a money jar
   Keep a money jar in your room. Put any loose coins that you earn or find in it. You'll be amazed how much you can save. When you have a stash, put it in the bank.
   
   
5. Think big
   When you've got a big goal in mind, it can be easier to get there. So save for big things and go without some of the little things.
   
   
6. Picture what you want
   Set a goal and cut out a picture of it from a magazine, or print out one from the Net, and stick it on your bedroom wall to motivate you.
   
   
7. Odd jobs
   Ask parents and relatives if there's odd jobs you can do to earn extra money. The Scouts and Guides have been doing it for years. So can you! With your parent's permission, ask the neighbours. Saving starts with income. So, get going and earn some more!
   
   
   • Wash cars
     
   • Clean windows
     
   • Mow lawns
     
   • Sweep leaves
     
   • Walk a dog
     
   • Babysit kids
     

Check out these other saving tips Rule members have sent us.

Figure it out!

Like to know how long it will take to save for something?
Or how much money you'll have saved by a certain date?
Click here to launch our calculator.

Why bank?

"Why should I deposit my money in the bank, rather than hiding it under my bed?"

If you ever ask that question, you obviously don't have a curious little brother!

Seriously, a bank is a much safer place for your money. But more than that, it also pays interest on your money. This is because when you deposit money in a bank you are actually lending the bank that money. The more money you lend the bank, and the longer it is there, the more interest the bank will pay you. So the money grows faster.

With a Youthsaver account you can even earn bonus interest.

Banks are just like other businesses. Their product is banking services.

• When you put your money in the bank, it lends it to other people who need it.
• The other people pay the bank interest on the money they borrow.
• The bank then pays interest to you.

The difference between the higher interest rate, which a borrower pays and what the bank pays to the depositor is called the margin or spread.

The bank uses the margin to pay for its staff, buildings, electricity, etc. and provide some profit in the form of dividends to the many thousands of people who hold shares in the bank, and who together own it. Your family may own some bank shares.

So banking works for everyone: depositors, borrowers, and the bank's shareholders.

A Youthsaver account can pay you Bonus Interest.

When you put money in a savings account the bank pays you interest on that money. That's what interest is - your money earning you more money.

How much interest you get paid depends on how much you have in your account, how long you leave it in and the type of account.

With a Youthsaver account it's possible to earn Bonus Interest.

You can deposit and withdraw your money at any Commonwealth Bank branch during business hours.

A Youthsaver account can also be linked to a Keycard, so you can make withdrawals conveniently through ATMs (Automatic Teller Machines) and purchases through EFTPOS terminals in shops.

You can also link your account to NetBank or Telephone Banking.

If you're under 16, you'll need a parent or guardian's permission to link your account to take advantage of these methods of electronic banking.

ATM stands for Automatic Teller Machine. The machine is connected to your financial institution by a phone line. When you put your debit card in, the ATM asks you a series of prompts and in response, you enter your Personal Identification Number (PIN) and the amount you want to withdraw, deposit or transfer. You can also check your account balance. When you complete your transaction, you get your card back and a record of the transaction.

EFTPOS stands for Electronic Funds Transfer at Point of Sale, and that's exactly what it does. The EFTPOS machine is connected to the bank by a phone line, just like an ATM. Funds are transferred out of your account into the business's account.

You may incur a transaction fee when you use EFTPOS, depending on your account conditions. Remember to read the terms and conditions for your accounts. They should list the fees for each type of transaction, including EFTPOS.

The Bank will also provide you with a copy of the Electronic Banking Terms and Conditions for use of your PIN and card. Ensure you read this booklet carefully! Your card and PIN will be posted to you separately for security reasons or you may be required to collect them from a branch.

Telephone Banking - you can check your balances and transfer funds from your home. As with all other forms of electronic banking, you need to keep your password secure, so no one else can access your accounts.

NetBank - you can check your balances and transfer funds on your computer, any time night or day. NetBank also requires a Client Number and password.