Most people know that saving is a good thing, and know WHY they should save. The problem is that many people don’t know HOW to save. Here’s 10 steps you should take so you can get on top of your savings, and make your savings faster, easier and less stressful.

1. Understand what you get paid.

You would be surprised at how many people don’t know their annual salary, and don’t know what that equals in terms of net pay per month.

First, if you’re an employee, you need to know what you earn. Have a look at the net pay on your payslip, this figure should be burned into your brain. Understand what deductions are coming off your payslips (HECS, voluntary superannuation, RemServ), and understand where they go. Have a speak to your employer/payroll department about which of these is voluntary, and which are mandatory.

If you’re self-employed, the best option is to create structure for yourself and pay yourself wages as if you’re an employee. Don’t treat your company account like it’s your own personal transaction account. This will help with budgeting from both a personal, and a business perspective. Your bookkeeper/accountant will also like you more.

If you get paid monthly, you’re going to do a monthly budget, if you get paid weekly, make it a weekly budget. Try to keep all your timeframes consistent, it will make things easier for you.

2. Do up a budget.

This phrase makes many people sweat, but the truth is that it’s pretty easy. Once you know how much you get paid, it will make it easier to understand your outgoings. First up, work out the essentials. Rent/mortgage, groceries, transport, insurances, medical and health, childcare, education etc, the things you can’t ditch. These also tend to be the categories we’re not as likely to splurge on and will mostly remain consistent from month to month. To make things easier here, try to do one grocery shop per week.

Then, figure out what you would spend ideally on the remaining categories like recreation, dining out, alcohol, and other discretionary spending. For most people, this section comes as a bit of a shock. Don’t stress, we all spend more on this stuff than we’d like to admit. Just own it, understand where your money goes, and don’t bury your head in the sand.

Keep your timeframes consistent here again. If you’re paid weekly, you should have a weekly budget. If you’re paid monthly, keep it monthly.

3. Use steps one and two to calculate how much you can save per month.

Take what you’re paid, and minus the amount you’ve calculated as your spendings in your budget. Give yourself 10% leeway. For example, if you earn $5000 per month, and you spend $3000, then you’ll save $2000 per month. You’re going to keep this conservative and knock 10% off that $2000, for a savings figure of $1800/month. There’s a few reasons for this. Firstly, life happens, and we get unexpected costs, events, and dinners that get out of hand. That’s cool, just own it.

Secondly, it’s better to be conservative with your savings and consistently meet your targets. If you’re constantly coming in at $1900/month when you set yourself a goal of $2000/month, you’ll feel discouraged. If you set yourself a goal of $1800/month, and you’re hitting $1900, you’ll feel much better about the whole process and will be far more likely to stick with it.

Once you have your savings figure, it should also be imprinted on your brain, just like your earnings.

4. Plan for the future

Next, you’ll want to figure out how long it’s going to take you to save the amount you’re aiming for. Research shows that having a combination of long and short-term goals is the best way to make sure you stick to your guns. If you’re planning on saving for a $20,000 car or holiday, you take the $20,000 and divide it by your monthly savings. Using our example, that’s 20,000 divided by 1800.  This gives a figure of 11.1, meaning that in just over 11 months, you’ll have saved enough for that car or holiday! Put that date in your calendar, that’s what you’re working towards!

5. Get your accounts set up correctly.

From step 2, you already know what you will spend on certain items per month, and you’ll know which of those are direct debited. Set up a new bank account, this one will be purely for your monthly direct debits. Split your pay each month so that the total amount debited over the course of the month goes directly into this account. This way, you never have to worry about any of those direct debits bouncing or going into dishonours. Another handy feature is that if you decide to move banks, you don’t have to go sifting through all your transactions to find the direct debits to move across, they’ll all be in the one place!

Here is where you’ll also set up your main savings account. You’ll want this to be with a separate bank, and ideally one where it will take a while for the money to be transferred out of it should you request it. The reason for this is that you’ll be less tempted to use this money for impulse spending if you know it’s going to take 5 days to transfer out. Like the direct debit account you’ve set up, you want your savings amount ($1800 using our example from step 3), to be split directly from your pay each week/month and head directly into this savings account.

6. Set up a passive savings account like Raiz.

Many banks have automatic savings features like roundups, where if you spend $3.50 on a coffee, the figure will be rounded up to $4 and the extra 50 cents will be saved. With a Raiz account, it will link with your existing bank, and the extra 50 cents will get invested into a managed fund. The best thing about this is that as it’s small amounts, you won’t tend to notice a hit to the pocket, but it will steadily accumulate and you’ll likely exceed your savings targets.

7. Stick a blank sheet of paper to your fridge.

This is where you’re going to write down any impulse items you feel like buying, the date you felt like buying it, and the price. As an example:


Disco shoes with goldfish in them – 3/9/2020 – $200

If, after 30 days you’ve decided you still really REALLY need those shoes, you can get them. Most of the time though, people decide that they probably don’t need what they thought they did once they’ve had time to stop and consider it. This goes a long way towards stopping the impulse buying habit, and the next step will help you go even further.

8. See how many days you can go without spending money.

Now that you’ve hopefully got the impulse spending under control with more expensive items, see if you can change your habits around smaller incidental spending and see how many days you can string together with no spending at all. The idea here isn’t to stop you from buying food for your child or anything drastic, simply to make you stop and think if you REALLY need that takeaway coffee, or if you can wait until you can get home to make one. This trick is surprisingly effective at curbing the tap and go habit that most of us have developed as a part of payWave technology.

9. Constantly revisit your budget.

Once you’ve developed some good habits using the above tips, you’ll find that you’re able to cut out some further spending which you initially struggled with. It won’t feel as drastic as you will have been able to slowly change your lifestyle, rather than feeling like you’ve cut out everything at once.

10. Once one expense stops, save it.

Most people who earn more end up spending more, and it’s not a conscious decision that most of us make. It’s simply due to the fact that with more income, you’re able to spend more before you run out of money. To mitigate this, once you’ve had an expense stop, it’s a great time to arrest that cycle and actively save that same amount.

For example, if you have been paying $360 in HECS per month and you’re about to pay it off, have this amount go directly into your savings account instead. You’ll be saving an extra $360 a month with no change in lifestyle. This also applies for car loans and credit cards you’ve paid off.

Follow these 10 steps, and you’ll find that you’re able to better stick to a savings plan, and you won’t have the guilt from burying your head in the sand!