November 1999 Volume 80 Number 11 "serving the protectors"
Police Credit Union

Smart Savings - How to Achieve Your Goals

It’s a proven fact that, while many people have no difficulty in making a regular, fixed repayment to a loan, they are unable to contribute a similar amount to a retentive savings account.

Regular savings should form an integral part of your monthly budget.

Many financial institutions offer financial counselling services, however, the solution to smart saving may be as simple as a budget analysis.

A budget analysis will highlight any unnecessary expenditure, and perhaps put you on the road to a more financially secure future.

When completing the budget analysis it is important to be honest, and provide the full financial picture. You will need full details of all fixed expenses, i.e. insurance costs, fixed loan payments, car registration, school fees, health insurance, and fairly accurate estimates of other expenses, such as averages for electricity, gas, phone, council and water rates, food, petrol and so on.

In addition, you will have to allocate funds for non-specific items such as entertainment, clothing and holidays.

Remember, in this situation it is always better to overestimate in case of unforeseen circumstances.

The figure derived after your expenditure is deducted from your net income should give a fairly accurate indication of your surplus funds each month.

As many financial institutions offer direct payroll credits to nominated accounts, the sensible approach is to set up an account designated to cover all known bills and accounts. For example, from your budget analysis you may have determined that each month you need to put away $400 to cover quarterly bills, car insurance and registration, health insurance, and a percentage of annual council rates. With this amount accumulating in the account each month, you will alleviate financial pressure by having the money on hand.

Loan and mortgage payments can be directly credited to the relevant accounts.

With the remaining surplus funds, set up a sensible savings plan. Plan for Christmas by taking advantage of Christmas Club accounts which are available through some financial institutions. A regular deposit of $50 per fortnight could reach $1300 at the year’s end to assist with presents. In addition, try to establish a savings account, which is not touched, but left to accumulate on a regular basis. A savings account that pays bonus interest on your funds if you do not make a withdrawal during the month is often the best option to motivate you not to touch your savings.

With careful planning, it is possible, and should be easy, to save. Perhaps a budget planner is your first step towards positive savings, and a more financially secure future.

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