10 great tips to save money for retirement
The Association of Super Funds of Australia says the average couple needs $640,000 in savings for a comfortable retirement, while individuals need $545,000. As Equip Super notes, “Even if you’re coming up short, there are a number of things you can do to boost your balance. As long as you’re still working and contributing to your super you have options available.”
Here are 10 ways you can save money in the short term, and ultimately improve your outlook for retirement.
1. Offset your mortgage
If you've got both a savings account and a home loan, it's time to combine them. Refinance your mortgage to a better rate and make sure you get a 100 per cent offset account, then your savings will offset the interest you pay on your home loan while still being accessible for use. Win win!
2. Don't pay an annual fee
If you're paying an annual fee on your credit card, ask to have it waived. Worst case scenario is your balance transfers to a better rate and a card with no annual fee – easy!
3. Make side money
Be it ride-sharing services, room-renting or selling the product of existing hobbies (baking, knitting, freelancing skills) off at a suitable price – and remember, a higher price than most might not turn people off, if anything it's a sign of high quality. Take a deep breath and dive in.
4. Stop spending on small luxuries
Your daily work lunches might seem cheap at $10 a day, but then that's $200 a month and approximately $2,200 a year (excluding a month's holiday). Dedicate an afternoon each week to grocery shopping, and pack your lunches rather than purchasing them. Make sure you take a prewritten list to avoid impulse buying.
5. Transfer your debt
Dramatically lower your interest repayments by moving your existing debt onto a balance transfer card. Balance transfer cards can see you pay 0 per cent interest for a fixed number of months (between six and 24!). With such significant saving potential, there's no excuses to not compare your options, transfer your debt and start saving! But make sure you pay it off before the time runs out, or you could find yourself paying extra.
6. Drop all your loose change into a jar
You'll be surprised how fast you'll save a small fortune. Reward yourself for employing new money habits and allow yourself access to the change jar every other month. Take yourself to dinner or a movie, to an ice-skating session or a comedy show… whatever floats your boat.
7. Shop around online
Online shopping is becoming increasingly popular and retailers competing for customers are continuously releasing exclusive discounts and deals. Don't commit to a purchase until you've done your research, be sure that you've found the best deal available.
8. Use apps to change your mindset
There are plenty of apps available, free of charge, that monitor your financial progress. Download an app to assist in your budgeting, to track your expenses, to suggest cheaper products. A visual representation recording your financial situation can be more effective than a bland list or similar.
9. Ensure your partner is on the same page
Dedicate a night to budgeting together. Record your expenses, predict your investments and monitor your progress as a couple, endeavour to set recurring dates and hold these sessions frequently.
10. Consolidate your super
If your super isn't in a single fund, fix it. Locate all the super accounts you have open and transfer them to the most appropriate, single provider. Consolidating your super will be of benefit as you're generally rewarded for the more money you invest. Before you decide, research your different options. Are there any termination fees? Can your current employer contribute to your elected fund? What level of insurance is offered?
Do you think you’ll use any of these saving tips?
Written by Bessie Hassan. First appeared on Stuff.co.nz.