• Home
• Introduction - Get smart about everyday banking & saving
• Banking basics
• How do I know what type of bank account I need?
• How do I choose the best bank account for me?
• How do I open a bank account?
• How can I access & use my bank account?
• How can I make the most of my bank account?
• How can I minimise the cost of banking?
• How can I increase my savings?
• Where to go for more info?
• All that jargon - a glossary of terms

Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

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Banking is not just about handling your day-to-day finances. Managing your money is also about planning for the future, and having money put aside in case something unexpected happens.

We’ve already looked at some different types of accounts that can help you save. For example, term deposits give you a better rate of interest than most transaction accounts, and allow you to lock away funds for a period of time without the temptation to dip into them.

It’s also wise to get into good savings habits early to try and build your money, and eventually to invest for the longer term.

SAVINGS STRATEGIES

To get started, you need to have a look at what is coming in and what is going out. For most of us our income (what’s coming in) doesn’t change all that much. If we want to save that means we need to think about our expenses (what’s going out).

STEP 1: KNOW WHAT YOU'RE EARNING AND WHAT YOU'RE SPENDING

For many of us doing a budget can be quite daunting. But doing a budget is simply a matter of noting down all your income and all your expenses, and then subtracting your expenses from your income to see what you have left.

Doing a budget is important because:

• A budget helps you see where you’re spending your money. You may find some things you weren’t expecting.
• A budget means you’ve got an accurate starting point when you’re trying to establish some savings goals.
• A budget helps you identify areas where you can spend less and find ways to cut costs.
• A budget gives you an overview of your financial position.

Cutting back on your expenses is an important way to save.

STEP 2: ESTABLISH GOOD MONEY HABITS

Good money habits will also help you save. Here’s some tips you can use to help you save:

• Pay yourself first – work out the amount you think you can save each pay period (aim for a minimum of 10% of your after-tax pay) and have the money put somewhere you can’t access it immediately. You could arrange a direct debit from your transaction account, so the money comes straight out of your pay and into a savings account. Or you could ask your employer to arrange for your pay to be divided, so some money goes to your transaction account and some money goes straight to your savings account.
• Save any additional money you come into – for example, if you receive a bonus, an inheritance, a gift, or a tax refund, try to save or invest this money, rather than spending it. Or if you receive a pay rise, try to maintain your expenses at the same level so you can save the extra money, rather than spending it.
• Reduce your debts – talk to your bank or lender about how you can reduce your interest costs so you can pay your loans off faster. You could set up more frequent repayments or large repayments. Plan to pay off your high-interest debt first.
• Reduce your fees – look at ways to reduce the fees you pay on your bank accounts. (For more information about reducing your fees, click here)
• Pay your bills electronically instead of using cheques – transaction accounts can come with a cheque book – these accounts are sometimes referred to as ‘cheque accounts’ – but usually there is an additional fee. Cheques might be handy in certain situations, but ask yourself whether you really need a cheque account. These days there is less need for a cheque book than there used to be because paying bills can easily and more cheaply be done by direct debit or using payment services, such as BPAY.
• Set up a dedicated savings account – keep your savings separate to reduce your temptation to dip into your savings for day-to-day needs.

• Maximise the interest rate on your account – once you have saved a lump sum, consider moving it into a term deposit that earns a higher rate of interest. If you’ve got savings that you don’t want to touch, a term deposit might be the best account for you. The higher rate of interest is usually paid at the end of the specified term. But remember, if you withdraw your money before the end of the specified term, you mightn’t earn the same interest rate.
  
  Some banks have savings accounts which offer a higher rate of interest if you don’t make a withdrawal. Interest on these savings accounts might be calculated and paid more frequently than on a term deposit. But remember, the interest rate might change on these accounts, and the interest rate on the term deposit is guaranteed for the specified term.
  
  You should closely consider what bank account option best suits your needs and your savings goals:
  
  
  • Ask yourself: Is interest calculated daily, weekly or monthly? Is interest paid into your account, monthly or at the end of a specified term?
  • Ask your bank: How is interest on my bank account calculated and paid?

STEP 3: HAVE A BANKING STRATEGY

This booklet provides you with lots of information about how to get the most out of banking. Having a banking strategy in place will help you minimise your costs, maximise your money and achieve your savings goals.

Speak to your bank about a banking strategy that best suits you.

Or you could speak to Centrelink’s Financial Information Service (FIS) to help you to understand your financial affairs. For more information on Centrelink’s Financial Information Service, go to www.centrelink.gov.au or call 13 2300.

Or you could speak to your financial adviser. Once you have some savings in place, you can look at investing strategies.