How to save your way to 1 million dollars
16 October 2017
Imagine saving your way to a million dollars. Sounds too good to be true, doesn't it? Well it isn't. You could just enter the lottery; you have about a six-hundred thousand to one chance of winning the million-dollar jackpot on a weekday lottery. They're pretty long odds. You could spend a million dollars over a lifetime chasing that windfall and never get there. What if you could achieve this goal just by saving? Think of it as a DIY jackpot.
High interest savings accounts aren't just places to squirrel away change for a rainy day. They can help you save and fulfill your dreams, whether that's a spectacular overseas trip or a down payment on your home. It's not all delayed gratification either. Nothing beats the satisfaction of seeing your savings grow, and that's within your grasp right now. You don't need to already own properties or master the share market to invest in your future. All it takes is a little determination, the right account, and willingness to put one foot in front of the other.
The first step for any saving project is to have a clear goal in mind. Intention fuels our actions. Visualising that new car or your dream wedding will help you stay on track.
The Suncorp Savings Calculator is a fantastic tool to help you figure out what's possible. How much will you need? When by? Then you can determine which kind of account works best for you. Suncorp Bank have a suite of savings accounts to meet different financial needs.
One way to ensure your savings goals support you is to check that they're SMART:
- Specific e.g. 'I want more savings' vs. 'I will save $30,000'
- Measurable e.g. 'I will save as much as I can' vs. 'I will put $200 into my high interest savings account each week.'
- Action-oriented e.g. 'I'll be more frugal' vs. 'I will do the following things to reduce expenditure...'
- Realistic e.g. 'I want a million dollars by next week' vs. 'I want enough for a house deposit.'
- Time-Based e.g. 'I'll get there eventually' vs. 'I will achieve this in three years.'
Take small steps
Saving money is ultimately about changing your financials habits to bring them in line with your intentions. According to the Australian Psychological Society (APS), "the key to successful behaviour change is setting realistic goals with verifiable outcomes. Daunting goals can be broken into manageable steps so that they are seen as a series of sub-goals."" Try to create practical savings targets for the short and medium term. If you save $10 today you otherwise would have spent, you're already on your way.
It's useful to get a clearer understanding of your current budget. Even if you're someone who struggles with finance or doesn't keep receipts, try charting your expenditure over the course of one week. If most of your transactions are electronic, this is even easier – the records are all online. Just plug them into a spreadsheet or jot them down.
Having the numbers in front of you can be an enlightening experience. Odds are you'll discover that there are more opportunities to cut costs than you imagined. Then sketch out a budget, and decide how much to put away each week.
Find easy savings
Start by cutting expenses you aren't attached to. This is easier than going straight for those luxuries that matter, and the sense of achievement you'll feel will inspire bigger sacrifices. If you love your morning coffee but only buy those muffins out of habit, start by limiting the snacks.
Look for areas where you could easily substitute an expense for a cheaper alternative, like trading in your gym membership for a daily run. Remember that regular small expenses accumulate rapidly. If you spend $15 on lunch at work every work day, that's $75 a week and $3750 a year.
We usually make these purchases because they seem convenient, but this is often an illusion. It can be useful to think of your money in terms of the time it took you to earn it. Is spending five minutes to make lunch the night before really less convenient than working for 40 minutes to pay for it?
Go for big wins
The most satisfying savings are the ones that also benefit you. Identify habits you want to cut from your life, calculate their costs, and use your savings goals as the boost you need. Frustrated that you're spending too much time streaming TV? Kill two birds with one stone by cancelling your subscription. Drinking more than you'd like? Cut back on the beers and work towards your summer body and summer vacation at the same time.
If you're a smoker, you're in luck – you have a huge opportunity to save. If you smoke the national average of thirteen cigarettes a day (The Department of Health), quitting will save you over $4000 a year!
Sustain your savings
Finally, remember that saving is a marathon, not a sprint. We've all made New Year's resolutions than haven't outlasted January, but we've also all stuck to commitments that have made meaningful differences to our lives. The best way to maintain personal discipline is not with pressure but support.
If you miss a savings target or accidentally splurge, there's no point beating yourself up. It actually makes things worse, because when we're stressed we seek comfort and are more likely to throw in the towel. Mistakes are a natural part of the process, and an opportunity to practice getting back on track.
Saving isn't about suffering your way to success. It's about doing a little bit now for the bigger reward in the future. Compare Suncorp Bank Savings Accounts to get you started and find one that's right for your needs.
Want to know more about how you can achieve your savings goals? Speak to a friendly Suncorp Banking Specialist today on 13 11 55.
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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.