The first step towards financial freedom is to set a savings goal. For many Australians, saving money and building a healthy bank account balance is a long and difficult journey. High rent, expensive groceries, and expensive weekend getaways can take a big bite out of your budget. Having a goal in mind will help you stay focused and avoid overspending on things you might otherwise indulge in.
The trouble comes in when deciding the best method to track your savings. Do you go with the latest in technology and computerised tracking, or do you stick to the more traditional and time-honoured method of using paper? Both methods have many benefits in tracking your savings and staying on budget. However, the best method will depend on your personality and your daily habits.
Exploring Digital Savings Tools
The benefits of using technology to track your savings and budgeting goals are numerous. For one, technology allows you to track your savings anywhere and at any time. Whether you’re sipping a cup of coffee or on your way to work, checking your savings goals on your smartphone will be easy and convenient.
Most Australian banks offer a built-in goal-tracking system within their mobile banking app, like ING’s online savings accounts. These computerised tools will automatically calculate your interest and savings balance. You can also easily automate your savings by setting up a system to automatically transfer money directly from your paycheck to your savings account.
The drawbacks to using technology to track your savings goals lie in the fact that staring at numbers on a computer or smartphone screen for long periods of time can be difficult. You might find yourself getting caught up in the many different budgeting tools and apps on the app store.
The Appeal of Paper-Based Savings Methods
Writing down your goals by hand gives you a sense of reality with your money. Traditional methods include using a notebook, a printed out budget planner, or even a chart stuck to the refrigerator. Physically colouring in a savings chart as you achieve certain milestones gives you a tremendous psychological high.
Writing down your goals by hand makes you think very deeply about how you spend your money. You will become much more aware of where every single dollar is going by manually writing down all transactions. This will create a much stronger emotional commitment to saving and becoming financially successful.
The Downside to Paper-Based Savings Methods
The major downside to traditional methods is the tremendous amount of work and commitment required. You will have to remember to update your records regularly, which can be very tedious after a long day. You can easily lose or even damage your paper-based trackers, effectively negating months of work with a single mistake.
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Winning with a Hybrid Method
You don’t have to pick just one method. Using a combination of the two methods will likely yield the best results. This is because you will be able to reap the benefits of both methods while minimising the disadvantages.
For example, you might use an automatic digital transfer to move your savings every payday. This ensures the money is safely tucked away without requiring any work on your part. You can then use a visual paper tracker on your desk to colour in your progress every month. This approach offers the security of digital automation with the daily motivation of the physical tracker.
Start Your Savings Journey Today
There is no single perfect way to track your money. What works best for you is the method you can stick to for the longest period. It’s worth giving a digital tool a try for a week or two, and then switch to a paper-based tracker.
Tonight, in a few minutes, you can clarify in your mind exactly why you are saving. Choose a method that suits you best, and make your first deposit tomorrow. Your future bank balance will thank you for taking the first step today!
