Nobody likes to hear news of interest rate rises, but one of the best ways to make sure you are prepared for them is by having a good savings plan in place.
By putting away even the smallest amount of money each week you can help prepare for rainy days and prevent yourself from living week to week.
Savings can be a blessing not only when interest rate rises pop up though, but also for when unexpected bills arrive or you need to take a holiday or buy a new car or laptop for instance.
For those of us who don’t have a home already, practising saving now can also be a great way to save up for a home deposit.
It’s easy to start saving. First figure out what you can afford to put aside each week. Even if it’s as little as $20 it’s still a start (savings don’t happen overnight). Some people choose to save a percentage of their wage eg. 5% or 10%. To make the most of your savings it is a good idea to put your money into an account that earns you interest too. You can shop around for the best deals online or by asking your bank (just be aware of penalties such as such as transaction fees, account keeping fees, or one-off charges).
It is a good idea to shop around and compare features of different savings accounts. If you are paying off a home loan it might even work out better for you to put your extra money towards mortgage repayments. Have a talk to a professional financial advisor to find out which saving plan would work best for you.