Considering opening a term deposit to lock away your savings? The minimum deposit you need will vary depending on the authorised deposit-taking institution (ADI), but the general rule is simple: the more you lock away, the more interest you’ll earn over the term. If you’re trying to grow your savings to lock away in a term deposit, these are some simple strategies that may help you get there faster.
1. Track your expenses
It’s surprisingly easy to underestimate how much you spend each day, week and month. Little expenses can quickly add up over time – from your daily coffee to some bigger, impulse buys. If you're serious about growing your savings, the first step is to get a clear view of your financial habits by tracking your expenses.
The good news is that you don’t have to do it manually. A Google search will show plenty of available online tools and apps that may make tracking your spending simple (and even fun). By keeping tabs on your day-to-day spending, you can quickly identify where you might be overspending and where you can cut back to boost your savings.
Tracking your expenses can help you spot patterns, adjust your habits, and find a comfortable balance that works for your lifestyle while still helping you save more.
2. Create a budget (and include savings in that budget)
After you have a clearer picture of your spending, you can begin creating a budget. One of the rules of budgeting is to include your savings goals alongside your expenses and seek to meet them. Make setting savings goals a fixed part of your monthly financial plan. If you wait to see whatever’s left at the end of the month, chances are, there won’t be as much as you think there will be. Everyone’s income and expenses are different, so there is no single rule of how much you should save each month.
Tip: Remember to include not only your daily and monthly expenses but also those larger, less frequent costs, like car registration or insurance in your monthly or annual budget.
When you include a regular savings amount in your budget, you’re actively working to set yourself up for financial success, making it easier to contribute a larger sum to any term deposit account you decide to open.
3. Find ways to cut spending
Once your budget is in place, you may realise you’re not able to save as much as you’d like. That’s when it’s time to look for areas in your life you can cut back on spending. Think of this like decluttering your financial house. Some areas you may want to consider cutting back include:
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Dining out. Cooking at home is often cheaper, and planning your meals can make a huge difference. You can treat yourself occasionally but try to make it a planned indulgence, rather than a habit.
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Subscriptions. Review your recurring subscription payments (e.g. gym or other memberships) and consider cancelling the ones you don’t get full value from.
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Non-essential purchases. Waiting a few days before making impulsive buys can help you realise what’s a “want” versus a “need.”
Making these adjustments in your spending may help free up funds to put towards your savings goals without causing you to feel like you're sacrificing too much.
4. Set clear savings goals
It’s often easier to save when there’s a clear goal in mind. What are you saving for? Is it for an emergency fund, a new car, or perhaps you’re saving for retirement? Having a defined purpose can give you motivation to stay on track.
Once you know what you’re saving for, you can work out how much you’ll need and how long it might take to reach your target. Breaking it down into manageable chunks can make even large goals feel achievable.
5. Make saving automatic
One of the most effortless ways to grow your savings is to automate the process. By setting up automatic transfers, a portion of your income can go directly into a savings account, meaning you’re saving before you have the chance to spend that money. This "set it and forget it" approach can help you stay on track with your savings goals.
Many ADIs allow you to set up automatic transfers from your everyday account to your savings account, and you can choose how much and how often this happens. By automating your savings activities, you may remove some of the temptation to spend that money elsewhere, making it potentially easier to build your balance steadily over time.
Once you've built up your savings, term deposits can provide another largely automated option to continue building your savings. Like automatic savings transfers, term deposits can be set up to automatically roll over on maturity. When a term deposit matures, both the principal and earned interest can be rolled over into a new term deposit (at the prevailing interest rate at maturity), and you can consent to automatic rollovers continuing until you decide to provide different instructions.
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