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Uni’s well and truly in session and your workload is gaining momentum like a steam train. Dreaming of pumping those breaks and travelling the world on your trimester break? Perhaps the dream to travel is causing a bit of a struggle to decide whether to spend now or save for later. We spoke to Dr Adrian Raftery, Senior Lecturer in Financial Planning and Superannuation at Deakin University, for some top tips to help students save for their dream holiday.
According to Dr Raftery, ‘The best way to save is to set up automatic transfers.’ Students can find juggling part time work with Uni commitments stressful, but Dr Raftery claims that the temptation to spend money as a way to let off steam is ‘the biggest curse to saving.’ To beat this trap, he suggests setting up an automatic transfer to a separate savings account. So as soon as your pay comes in, it goes out again ‘That way the money is already gone before you have a chance to spend it over the weekend.’
No matter if you decide to set up an automatic transfer, or just manually move your funds, make sure to choose your bank account wisely. Dr Raftery says to ‘use a comparison site to compare high interest saving accounts, saving for three months at a 1% higher interest rate is fantastic.’ Choose an account hard to withdraw money from, or with a loss of bonus interest for a withdrawal. The fear of losing that extra money you’ve earned will give you second thoughts about taking money out of the account.
Creating and sticking to a budget is hard for the best of us. But according to Dr Raftery it doesn’t have to be. He suggests using the vacation planning template that comes with Microsoft Excel. ‘Budgeting is important, but don’t worry to the last cent, you can keep it at round figures.’ If you’ve started a budget, then regularly check in and monitor it. ‘There’s no point in starting a budget and not monitoring it. Automatically transfer your transactions to Excel and take two hours a month to budget, use it as a procrastination tool if you have to,’ Dr Raftery said.
Saving means you can’t spend what you want, whenever you want. Dr Raftery suggests getting creative with a drastic measure if you really can’t get on top of your freewheeling spending ‘Put a post it note on your debit or credit card with big letters spelling out ‘do I need this? Your guilty conscious should keep you in check.’ Cut all discretionary spending, eat at home, don’t use your car and take public transport, these are all things that can help you save money,and help you get on your dream holiday. As Dr Raftery says ‘The key is motivation, if we all shoot for the moon we hit the stars, and as long as you’re heading in the right direction who cares how much you’ve saved? The fact is it will be a significant amount.’
Find out more about finance at Deakin University, and if you want more tips from Dr Adrian Raftery take a look his website – Mr Taxman.
Course Director for Financial Planning, Faculty of Business and Law, Deakin University
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