Saving $20,000 in a year seems overwhelming — but looking at it in smaller numbers can make it less daunting.
With 2024 upon us, Téa Angelos, the Australian founder and CEO of Smart Women Society, has created a three-part money-saving challenge to help you boost your bank balance.
If you’re hoping to save $5000, $10,000 or even $20,000, the lawyer-turned-finance-guru says the key is to break the amount down into bite-sized goals — with the flexibility to put aside more or less funds — based on your monthly budget.
To get started, Angelos says you need to know exactly where every dollar is going as this can help you stay focused.
To avoid spending temptations, the author of Smart Moves: Simple Ways to Take Control of Your Life suggests automating your savings so the money is out of sight, out of mind.
“Set up an automatic transfer to your bank account the day after your pay day,” she says.
“The best part about this is the saving happens without you having to think about it and before you can spend it.”
If you’re living pay cheque to pay cheque, Angelos says you should start actively tracking where your money is going.
By looking through your bank statements, you will be able to reel in any unwanted or unnecessary spendings.
“Start by reviewing your current spending — you will really understand where all your money goes every month and reflect on your purchases and if they were necessary,” she says.
“Next, try and cut the spending that doesn’t impact your current lifestyle.
To cut down on your spending, Angelos points out the five things that will “kill your financial growth”.
- Buying things to impress people
- Living beyond your means
- Not having an emergency fund
- Impulse shopping
- Always needing the newest car, bag or latest gadget
“It’s never too late to start working on your finances for future you,” she says.
Bank accounts to set
If you’re looking to “grow your wealth”, Angelos suggests the five bank accounts you need to set up.
- Daily account: Everyday expenses
- Daily account: “Play” money for eating out, shopping and “fun” activities
- High yield account: Short-term goals including holidays
- High yield account: Long-term goals such as buying a house
- Emergency fund: Ideally you should have three to six months of living expenses saved in case anything goes wrong
