September 1999 Volume 80 Number 9 "serving the protectors"
Police Credit Union

Smart Savings - Setting Goals

Saving for your future is not only smart, it may prove to be a necessity. The likelihood is that, when the majority of us retire, the aged pension will no longer exist. So it makes sense to start providing for your future now.

This may sound daunting, but set yourself a series of increasingly larger goals. For example, you may always have wanted to go on an overseas holiday. Pick a departure date. Give yourself 12 months' notice, and set yourself a savings target. For example, if you save $100 per week, at the end of the 12-month period, you will have $5,200 to put towards your holiday.

To make your savings plan more interesting - and to retain your commitment to it - intermingle your goals. That is, after your overseas holiday, and having proven to yourself that you can save, dedicate the next 12 months' savings towards a retentive nest egg.

At the end of the 12 months, this money could be transferred to a term deposit, to earn higher interest.

Alternatively, after two years of saving at this rate, you would have enough for a deposit on your first home.

Many financial institutions offer bonus savings accounts, whereby if you start with an initial balance of $500, and add increments of at least $100 per month with no withdrawals, you can earn an extra 3% p.a. on your savings.

This type of account provides a solid basis for building your asset base. Alternatively, rather than keep all your eggs in one basket, investments can be diversified. If purchasing a home is not a priority, you may want to consider investing part of your savings in the share market, which offers high long-term returns, capital growth, and tax advantages. Similarly, funds can be placed in term deposits which represent low risk and guaranteed returns, and may pay monthly interest dividends.

Saving can be fun if you set goals that are realistic, and of importance to you. Saving will give you a good foundation for the future.

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