Quay Credit Union

The simple budget rule to boost your savings


Savings Boost

Budgeting can be simple. Yes, really! Don’t believe us? Take two minutes of your day to read this article and we’ll prove it to you.

How to budget in an instant

The simplest way to organise your finances so that you can afford the necessities, splurge a little and save for a rainy day is to split your salary with the 50/30/20 rule. Ask your employer to deposit 50% of your salary into an ‘Essentials’ bank account and use this account to pay for all of life’s must-haves – rent/home loan, bills and groceries. Then have 30% deposited into a ‘Fun’ account. This is your splurge fund – coffees, haircuts and nights out. The final 20% should go into a savings account with no debit card access.

By siphoning off your salary into separate accounts like this, you’ll see your savings grow quickly and budgeting will feel like a walk in the park.

If you find the end of each pay cycle feeling a bit squishy (not enough money for the bills? Nothing left for an impromptu drink with colleagues?), look at where the money is going and whether all the expenses are necessary. Do you need the streaming TV service? Can you cut back on grocery spending by completing a meal plan? Is there an opportunity to negotiate for a better deal on your bills?

Putting a rocket under your savings

Ideally 20% of your salary should be going into a savings account every month. This should leave you enough to live on while building your nest egg.

What happens when 20% isn’t enough to save for what you want, when you want it? If you can reduce your living costs by $20, $50 or $100 per week, you’ll see a huge increase in your savings quickly.

Think about this – a daily coffee at $3.50 equals $24.50 every week. If you started making coffee at work or bringing it from home, you could easily put an extra $20 per week into your savings account. After five years, that would total $5,200! Enough for a bonus overseas holiday or to fund that course you’ve always wanted to do. Cutting back on the coffee and buying some of your groceries in bulk could save you an extra $50 per week. After 12 months, you’d have a bonus $2,600 in your savings account!

As you can see from the table below, the savings add up quickly. The first trick to making these changes stick is having a solid goal to save towards (something you really, really want that will keep you motivated). The second is making the lifestyle shifts to free up the extra space in your salary. These shifts need to be achievable and long-term to have the desired impact. You may feel an initial discomfort making the changes, but you’ll most probably find watching your savings grow so quickly increases your motivation to keep going.

Bonus savings payments After 6 months After 12 months After 2 years After 5 years
$20 per week $520 $1,040 $2,080 $5,200
$50 per week $1,300 $2,600 $5,200 $13,000
$100 per week $2,600 $5,200 $10,400 $26,000

That’s it! It really is that simple. As a rule of thumb, save 20% of your salary every pay cycle. If you need to boost your savings faster, try making a few lifestyle adjustments to free up additional payments.

If you’re looking for a new account to pop your savings into, check out our Savings Accounts.


  Important Information

The information on this page is of a general nature and is not intended to be a substitute for personal advice. This information has been produced without taking into account your personal financial circumstances, objectives or needs. You should consider the appropriateness of the information to your financial situation and seek personal advice before acting on any of this information. Before opening an account with us, you should read our Terms and Conditions for Savings Accounts and Payment Services or call us on 1300 747 747. Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.


Article published January 2018