All savings (where there is a chance of receiving interest as a return on your money) is a form of low-level investing. Whether that's getting 1% interest on a term deposit, 3% return on your Superannuation Fund, or 7% on a private loan, investing-to-save and saving-to-invest are important interchangeable terms to get to know.
The ways to save and reach your financial goals are as varied and flexible as the people saving for them.
Learning to save involves many additional skills and benefits and is a valuable life skill set we need to teach and pass on to our children too. Modeling financial skills and learning how to better talk about money matters is part of parenting and learning to successfully navigate your own financial world.
And when it comes to adult children, being able to understand adult financial concepts like the reasons behind using a documented family loan agreement are important life lessons to be learned early.
Many financial advisors suggest that by age 40, you should have twice your annual salary saved for retirement.
There are good reasons for this number, but for many people, it seems absurdly out of reach. Figuring out how to save money is a complicated topic. Retirement is expensive, and it can include significant medical costs. How to budget can be an even bigger challenge, especially in a troubled economy in which many people have lost their jobs or been forced to face rising interest rates, and therefore rising rental payments too.
The reality is that many people won’t save as much as advised, as quickly as advised so we need to look at incremental and automatic strategies that make this easier.
Financial Fact: About 30% of Australian households led by people age 45 and older, claim to have no retirement savings outside the balance in their default Superannuation fund. Many of these same people are expecting to retire with mortgage or credit card debts still to be paid.
Whether that's maxing out your additional superannuation contributions, rounding up all debt repayments to the nearest one hundred (or one thousand dollars), or using an Insurance Savings Bond as a long-term saving plan to supplement your superannuation – as soon as you start saving, you will soon be watching your savings grow.
Pro Tip: If you're saving for a specific goal, why not consider using a separate 100% offset account on your mortgage, so you can reduce your interest debt, while you save for a longer-term goal? If you're saving for your first home, consider whether the government's First Home Saver Scheme is appropriate for you. If you've decided home ownership is not for you, consider replacing that goal with one that involves significant savings-to-invest.
Draw up a realistic, detailed budget that tracks all money going in and coming out, including debt repayment. If a budget is not for you, be sure to learn about alternative percentage-based budgeting. Discretionary income that’s not needed for expenses should go toward savings, but you can do more than that. Your goal should be to free up as much money as you can and begin funneling it into savings. Remember that any costs you don’t reduce now will likely have to be reduced in retirement, so every dollar saved now will be worth exponentially more by the time you retire.
Once you’ve worked out your costs and figured out how much you can afford to save, set up automated contributions to your savings and investments. It’s easier to build your savings when you don’t need to actively think about transferring the money every time you get a paycheque and dollar-cost-averaging- into your investment can reduce your exposure to market volatility. There are also many banking apps and digital products to help automate your savings across different accounts or by rounding up small amounts of money on purchases you make.
Not everyone can take on a second job. The demands of one job and running a home and family can be overwhelming, but if your lifestyle can accommodate a side gig, consider picking one up and devoting the proceeds exclusively to growing your savings. Whether that’s monetising a hobby, mastering the art of niche buy and sell on eBay or learning more so you can earn more, an extra paycheque will boost your savings faster than cutting corners on your expenses.
Saving is a learned skill for all types of investing. Reaching a savings goal can be very satisfying and will continue to motivate you to save. Learning to save, to focus on a goal outside your current focus and defer instant gratification is a core part of the investor's skill set.
Saving can give you a financial cushion to give you time to adapt to life’s changing circumstances. Saving just for the skill of savings is a strong habit to grow and can be an effective part of a 100% offset account attached to a mortgage.
Access to emergency savings (not emergency debt) can help you focus on the financial challenge today but not at the expense of tomorrow and be able to take advantage of opportunities, usually the domain of the saver.
Automate paying yourself like paying a recurring bill. Normalising perpetual small consumer debts through payday loans and use-now-pay-later services means you actually live with less than you actually have. The interest you don't have to pay is money you don't have to earn.
Everything we know we have to learn, from someone or somewhere, from a positive experience or a difficult one. Passing on our financial skills to the next generation is part of growing financially independent and secure adults - and we never stoop being a role model to someone.
Every skill learnt and practiced ultimately sets us up for the next opportunity. Getting better at living a more proactive live (rather than only a reactive life) makes you happier.
Having a strategy for your savings is an important part of providing for yourself and your family into retirement while reducing the pressure on your business as the sole source of your future retirement funding too.
Contact us for a confidential chat about your needs.
", "image": "https://mail.sapience.com.au/images/site-pics/intro-to-savings-sapience-financia.jpg", "url": "https://mail.sapience.com.au/services/saving-and-investing/savings-101", "provider": { "@type": "Organization", "name": "Drew Browne", "image": "https://mail.sapience.com.au/images/brand-logo/sapience-financial-square-logo.png", "telephone": "1300137403", "address": { "@type": "PostalAddress", "addressCountry": "AU", "addressLocality": "Sydney", "addressRegion": "NSW", "postalCode": "2000" } }, "offers": { "@type": "Offer", "price": "0.00", "priceCurrency": "USD" } } ``` ```json { "@context": "https://schema.org", "@type": "Article", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://mail.sapience.com.au/services/saving-and-investing/savings-101" }, "headline": "Savings 101", "description": "Savings 101 — Saving as learning to invest All savings (where there is a chance of receiving interest as a return on your money) is a form of low-level investing. Whether that's getting 1% interest on a term deposit, 3% return on your Superannuation Fund, or 7% on a private loan, investing-to-save and saving-to-invest are important interchangeable terms to get to know. The ways to save and reach your financial goals are as varied and flexible as the people saving for them. So before you consider the how first check in on your motivation to why. Then check your timeline, and decide whether that's fixed or more fuzzie? Savings for children's education and weddings using a long term Insurance Savings Bond might be a future reality to plan for, but exactly when that might be, can be very different from saving to set up your own emergency fund. Learning to save involves many additional skills and benefits and is a valuable life skill set we need to teach and pass on to our children too. Modeling financial skills and learning how to better talk about money matters is part of parenting and learning to successfully navigate your own financial world. And when it comes to adult children, being able to understand adult financial concepts like the reasons behind using a documented family loan agreement are important life lessons to be learned early. Time for a Different Approach Many financial advisors suggest that by age 40, you should have twice your annual salary saved for retirement. There are good reasons for this number, but for many people, it seems absurdly out of reach. Figuring out how to save money is a complicated topic. Retirement is expensive, and it can include significant medical costs. How to budget can be an even bigger challenge, especially in a troubled economy in which many people have lost their jobs or been forced to face rising interest rates, and therefore rising rental payments too. The reality is that many people won’t save as much as advised, as quickly as advised so we need to look at incremental and automatic strategies that make this easier. Financial Fact: About 30% of Australian households led by people age 45 and older, claim to have no retirement savings outside the balance in their default Superannuation fund. Many of these same people are expecting to retire with mortgage or credit card debts still to be paid. There’s a savings shortage in Australia, and at times, the gap between where one should be and where one actually is can seem enormous. One thing to be aware of is that time is one of the most important pieces in your savings plan. Start now — and start small if you have to. Whether that's maxing out your additional superannuation contributions, rounding up all debt repayments to the nearest one hundred (or one thousand dollars), or using an Insurance Savings Bond as a long-term saving plan to supplement your superannuation – as soon as you start saving, you will soon be watching your savings grow. Pro Tip: If you're saving for a specific goal, why not consider using a separate 100% offset account on your mortgage, so you can reduce your interest debt, while you save for a longer-term goal? If you're saving for your first home, consider whether the government's First Home Saver Scheme is appropriate for you. If you've decided home ownership is not for you, consider replacing that goal with one that involves significant savings-to-invest. 3 Steps to Smart Saving 101 Know your Budget Draw up a realistic, detailed budget that tracks all money going in and coming out, including debt repayment. If a budget is not for you, be sure to learn about alternative percentage-based budgeting. Discretionary income that’s not needed for expenses should go toward savings, but you can do more than that. Your goal should be to free up as much money as you can and begin funneling it into savings. Remember that any costs you don’t reduce now will likely have to be reduced in retirement, so every dollar saved now will be worth exponentially more by the time you retire. Automate your Savings Once you’ve worked out your costs and figured out how much you can afford to save, set up automated contributions to your savings and investments. It’s easier to build your savings when you don’t need to actively think about transferring the money every time you get a paycheque and dollar-cost-averaging- into your investment can reduce your exposure to market volatility. There are also many banking apps and digital products to help automate your savings across different accounts or by rounding up small amounts of money on purchases you make. Consider a Side Gig Not everyone can take on a second job. The demands of one job and running a home and family can be overwhelming, but if your lifestyle can accommodate a side gig, consider picking one up and devoting the proceeds exclusively to growing your savings. Whether that’s monetising a hobby, mastering the art of niche buy and sell on eBay or learning more so you can earn more, an extra paycheque will boost your savings faster than cutting corners on your expenses. Why should you Save? Reach Your Saving Goals Saving is a learned skill for all types of investing. Reaching a savings goal can be very satisfying and will continue to motivate you to save. Learning to save, to focus on a goal outside your current focus and defer instant gratification is a core part of the investor's skill set. Greater Security Saving can give you a financial cushion to give you time to adapt to life’s changing circumstances. Saving just for the skill of savings is a strong habit to grow and can be an effective part of a 100% offset account attached to a mortgage. More Options Access to emergency savings (not emergency debt) can help you focus on the financial challenge today but not at the expense of tomorrow and be able to take advantage of opportunities, usually the domain of the saver. Pay Yourself (not interest) Automate paying yourself like paying a recurring bill. Normalising perpetual small consumer debts through payday loans and use-now-pay-later services means you actually live with less than you actually have. The interest you don't have to pay is money you don't have to earn. Share your Skills with Another Everything we know we have to learn, from someone or somewhere, from a positive experience or a difficult one. Passing on our financial skills to the next generation is part of growing financially independent and secure adults - and we never stoop being a role model to someone. Get Better @ Life Every skill learnt and practiced ultimately sets us up for the next opportunity. Getting better at living a more proactive live (rather than only a reactive life) makes you happier. How we can help Having a strategy for your savings is an important part of providing for yourself and your family into retirement while reducing the pressure on your business as the sole source of your future retirement funding too. Contact us for a confidential chat about your needs.", "image": { "@type": "ImageObject", "url": "https://mail.sapience.com.au/images/site-pics/intro-to-savings-sapience-financia.jpg" }, "publisher": { "@type": "Organization", "name": "Sapience Financial", "logo": { "@type": "ImageObject", "url": "https://mail.sapience.com.au/images/brand-logo/sapience-financial-square-logo.png" } }, "author": { "@type": "Person", "name": "Drew Browne", "url": "https://mail.sapience.com.au/services/saving-and-investing/savings-101" }, "datePublished": "2022-09-26T08:58:41+10:00", "dateCreated": "2022-09-26T08:58:41+10:00", "dateModified": "2025-10-10T12:54:59+11:00" } ```