How to save if you suck at it
Having good cashflow is one of, if not the most important element in getting your shit together financially for adulting. So, if you suck at it now, you need to check yourself and get it sorted before you get knocked up or have a mortgage to deal with. This set up will help you nail it and the best part is, it doesn’t come with the usual gut wrenching, FOMO inducing, heartbreaking pain of saving.
You’ll need a few things:
1. A Big Ass Account: Set up a high interest account, this is where all your income will go and your savings will chill. Make sure you check the conditions/ restrictions for receiving the higher interest rate, not all banks will have a suitable account. If you can’t be arsed looking into this, just use an ING Direct Savings Maximiser — you’re welcome.
2. A Weekly Account: A normal transaction account at the same bank as your big ass account (for instant transfer times).
3. Your Weekly Spending Amount: Work out how much you spend a week, making sure you average out those things that are paid monthly or quarterly like your bills, clothes and ridiculously overpriced F45 membership.
Then you want to set up an automatic transfer from the big ass account to the weekly account which will happen on a Monday — if you do it later in the week you’ll blow all your money on the weekend and screw yourself over for the remaining days.
It’s also crazy important that you add some fat onto your weekly spending amount, even more so if you’re crap at saving. If you spend $400 a week, make your amount like $450, so that you can have some left-over cash building in your weekly account for when you stuff up/ Meredith tickets come on sale/ Yeezy releases a new $300 plain white tee. The fat should be treated like your ‘mini savings’ and is for special occasions only, exercise your self-control and aim to move the saved-up fat back to the big ass account after a month or two, once you’ve got more than you need.
The most important thing here is that you’re consistent, so if you’ve never been able to save, start slow and be generous in your weekly amount, then slowly start reducing your transfer amount once you get the hang of it. The aim of the game is to never need to dip into the big ass account.
In theory, you’ll have all the money you need coming into your weekly account, so ignore the big ass account as much as possible. This shit works, so it can be tempting to cash out once you have $$$ built up in your savings, like buying a $500 GoPro on a whim that you’ve used twice in your life — whoops. This account is for big ass spending so save it for home deposits, travel and having back up money if shit hits the fan. If big one-off expenses come up, it’s ok to take pay for them from this account as long as it’s a necessary spend (eg car rego).
This is one of those things that’s so simple that it’s easy to say ‘I’ll get around to it’, or people will start it and over-confidently stop prematurely once they think they’ve got the hang of it. If you’re bad at saving (or even if you’re not) it should be something you do forever. Just set it up and let it ride, you’re never going to not need savings.
Optional: If you’re having a heart attack that you might not have enough cash in your weekly account when it comes to direct debit time, you can set these up to come from your big ass account, just make sure you take these costs off the weekly spending amount.