How I Manage My Money
August 21, 2008 | Filed under Money
How do I manage my money? As I post so often about saving money on what I spend it on, it might shed a bit of light if I were to explain how I save money without spending it. Like many others in our new electronic society, most of my money is managed via online banking. I have two bank accounts – one is my easily-accessible “Online Savings” account, the other is my untouchable “Term Deposit” account.
I currently have roughly $11,000AUD in my Term Deposit account, and $7,000AUD in my Online Savings account, coming to $18,000AUD in accumulated savings that I can draw upon. It’s an adequate amount for someone my age who’s still only working part-time, but due to the lifestyle I like to lead (overseas holidays, etc.) it’s certainly not as much as it could have been. In fact, I’d have about $50,000 in savings if I hadn’t kept going overseas, or bought a car, or paid university fees. Anyway. Necessary expenditure.
How my Term Deposit works: You leave your money in there, and you don’t touch it. In fact, there are specifications on when you can touch it: I have a three month term deposit (e.g. the amount rolls over every three months), so I can only touch it once every three months, on the actual day that it rolls over. In fact, in my whole working life, I’ve only taken money out of this account once – $10,000AUD (plus $4,000AUD from my other account) last year to pay for the car.
The impossibility of access is a great deterrent to spending the money. I get the benefits of higher interest rates (I earnt $650AUD in accumulated interest in that account last year), as well as a great way of accumulating savings for larger purchases (home deposit for the future, etc.).
How my Online Savings account works: This is my everyday account. All my regular income (pay from work, etc.) goes into this account, and all my regular expenses (phone bills, rent & board, etc.) come out of this account. All my day-to-day expenses (petrol, food, shopping, going out, etc.) is generally paid for in cash from my babysitting gigs, so I can moderate my spending accordingly week-by-week. I manage to save a good $100-$400 every week (depending on whether it’s university term time {e.g. less income} or vacation time {e.g. more income}) in this account, which is used in either one of three ways:
- Paying off university tuition fees
- Paying for a holiday
- Making a contribution to my term deposit account or superannuation account
This account has never gone over $10,000AUD, or under $5,000AUD for the simple reason that once it starts nudging $9000AUD, I always have to pay university fees, or I feel the need to take an overseas or interstate holiday, or I chuck $2,000AUD into my Term Deposit. It never goes under $5,000AUD because I’m a cheapskate and I just stop going out and spending money until it reaches an acceptable level again.
Based on my experience, I would recommend that: If you have over $10,000AUD in funds to invest, put half into a high-interest savings account that you cannot touch. You’ll find it much easier to save money for large purchases (like how I bought a car, and am gradually saving up to buy my first home), and this fiscal safety net only grows in size! And – if you don’t have over $10,000AUD in funds to invest, start following my other saving money tips until you do!
13 Responses to How I Manage My Money
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Whoa!! I never had that kind of money during university, needless to say my car was a 21st gift, and my mentality at the time was that the money from the part time work is for spending rather than saving. loool. Then again, I was earning a massive $7.50 per hour at one stage!
kat on August 21, 2008 #
Oh is that what a Term Deposit is! I try to regulate myself somewhat on that system in my general savings account but it’s not easy. I might look into it!
Belinda on August 22, 2008 #
Time to revert back to my old ways of not spending…. at all. This is a great tip though. I’ve always considered opening a second bank account. Will look into that.
And I now aim to be able to save as much by the time I hit university, rawr.
As for me, I start going all paranoid when my bank account hits lower than $300. Haha.
Eina on August 22, 2008 #
Daaaaaaaaaaaaaaaaaaamn girl! And here I was bragging ’cause I didn’t touch the $15 on my Term Deposit account for three months, heh. Pay this semester’s tuition for me, please??? *begs* =P
Robmarie on August 22, 2008 #
So smart… and skilled… unlike me. DX
I have one year left of high school and I only have about $45 in my wallet. I can’t really get a part-time job in this country until I turn 18, which sucks.
I should take note of this. It could help me in the near future. Thanks for sharing. <3<3
Mimee on August 22, 2008 #
Great tips! I have a few term deposits as well, but I reckon they’ll be gone for when I start uni and get my first car. I’m gonna be sad, even though I know the whole point of those term deposits was for that purpose lol.
Jess on August 23, 2008 #
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I followed a complicated web of links from your more recent posts to this one, and all I have to say is… *looks at own bank account* – *looks at Amanda’s account balance* – *blinks* – *blinks some more*… No, forget it, I have nothing to say :P I’m ashamed.
There’s an upside to having a pitiful amount in my case, though, because when I file the FAFSA for government loans for school, they only take my financial state into account, not my mom’s, because I’m a grad student. Therefore, the less I have, the more they’ll give me. When I filed the FAFSA for this year, I had no employment history, no tax history and $217 to my name on the day of filing – it was a pretty sweet deal, all things considered :P
Reply: I have to admit, I’m a bit out of touch! Until everyone started going “OMG”, I really thought $18,000 just…wasn’t much. :S
Alex on October 6, 2008 #
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Awesome tips! I’m heavily considering searching for a job and hopefully relieving my parents off of my biweekly allowance. It’s time I have to be aware of these crazy money terms.
Aravis on October 25, 2008 #
Oh snap, that comment was meant for your blog entry, “Unemployment: How To Handle It.” Sorry!
Aravis on October 25, 2008 #
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