How I save my money every time I get paid. Saving is of the utmost importance when it comes to living a more self sustaining, financially independent life. If you are new to the frugal living space then you need to know firstly, you need an emergency fund.

In the following paragraphs I would like to share with everyone how we choose to break up our savings into different sections and work towards our goals of becoming less and less financially dependent on a weekly income. 

Not to say we won’t need it, but we hope to achieve the status of not anticipating every payday. Although we do not see money as a determining factor to our happiness. It is a necessary tool in this lifestyle we have adapted. Having savings helps us inch towards that financial independence.

Before we go any further I want to state firstly that I will not be divulging any specific details about how much I hold in savings or investments. For obvious reasons, ya know. ‘Privacy’. But I do not need to to be able to show you how and where I split my savings into.

The importance of savings

Developing a regular savings habit is one of if not the most important financial habit everyone should develop. 

Having savings is crucial because it will help support you in case of a financial emergency. Roof repairs, medical emergencies, anything unexpected can be covered by a solid foundational savings. 

The importance of saving money should not be understated. You. Need. To. Have. Savings!

How we split our savings 

How I save my money. Our weekly savings are split into 3 sections. Early debt payoff, investments and High yield savings accounts.

Early Debt payoff

Years ago, I obtained a large personal loan which still 5 years on I find myself paying off. I have only ever contributed the minimum repayment because, well because I didn’t care enough about where my money was going.

With the interest in financial independence growing to an actionable standpoint early this year I began a goal of paying off my personal loan debt as early as I could. I want to lower the amount of interest I am paying by paying extra into the principal of the loan weekly.

Currently my loan is on a 12.99% Interest rate which I plan on lowering by refinancing the loan to a much lower rate available in the coming weeks. I will refinance to the lower amount that I have paid off to also. This will lower my minimum repayments meaning I will be able to contribute more onto the principal of the loan without decreasing my actual income. 

ASX Investments

how I save my money

I have had an interest in investing since in my early 20’s but never took the step to take the leap. This year I changed that and now regularly invest. 

Investing in the ASX does not come without its associated risks though. Anyone looking to invest for the first time should do their due diligence and research. I would research hours upon hours making sure I was understanding what I was doing before doing it thoroughly.

I now hold a small portfolio consisting of mainly Australian Exchange Traded Funds (ETF’s) and a couple small cap companies I have well researched. These small cap companies I have invested in are considered high risk but I have done my due diligence and am confident with these investments. The ETF’s I am invested in are a long term strategy. Over the course of my research discovering that ETFs are generally lower risk and over long term will increase in value almost definitely. 

I contribute to my portfolio weekly as part of my savings goals. Increasing my investments weekly.

save my money everytime I get paid

High Yield/Interest Savings Account 

A savings account is simply a bank account that you use to accrue interest, growing your initial deposit. –Canstar.com.au

What is known as my Emergency fund, Holiday fund, Sinking fund etc. Holding them all in the same account. I know I should have them split up but for now they are all lumped together.

Contributing to this account weekly. When there is money used from it I pay it back. Every week the amount increases. Over time this account attracts interest and steadily grows with my regular contributions. 

Recently this year I had a family emergency on the other side of the country. On such short notice the flights and accommodation pricing was, let’s just say exorbitant. Without this emergency fund I would not have been able to attend. A prime example of why this type of savings is important. It has been a struggle to pay it back but I am there now and continue to grow my emergency/everything fund. 

Be sure to make multiple comparisons when looking for a high interest savings account. Use websites like Canstar to compare these products.

Major key when it comes to choosing your savings account below!

There are so many savings accounts that don’t charge you to store your money so it doesn’t really make a lot of sense to go for a savings account that charges a monthly account keeping fee. If your savings account doesn’t have a high interest rate to begin with (or you don’t have much in savings), that monthly account keeping fee will sting even more.

Other fees to be aware of with savings accounts are branch deposit fees, EFTPOS fees, electronic transfer fees, withdrawal fees, and over-the-counter transaction fees.

https://www.savings.com.au/savings-accounts/how-to-choose-a-savings-account

How I save my money

In the near future I hope to pay off our personal loan debts for good. We have already made a pact to never apply for another one. EVER. They are a trap and now with a mortgage to pay off we can use that to our financial advantage in the future instead. 

Contributing extra to personal loan debt will decrease the loan term by years. It’s going to be a long journey but I am super happy that I have started it.

This savings strategy may not work for everyone. I am not a financial advisor of any kind. These are just the methods I am currently using and I must say, it works for me. I decrease my debt and increase my savings and investments. And that’s how I save my money.

When making any financial decision be sure to do your due diligence and research.

If you have any savings tactics you’d like to share with us, we’d lost to post them on our blog! Get in contact with us !