I made a decision in January this year to write a “Frugal Frieda” post each month. Life has been busy and I missed the month of May altogether! Now it is June and getting close to the end of the financial year Frugal Frieda has thoughts about saving and spending – sense savings.
Have you heard about ‘sense savings’? It is more than just a new buzz phrase – ‘sense savings’ is a new way of banking. It is a combination of two accounts; an everyday account and a savings account, with one statement. The ‘sense savings’ account does analysis on spending and saving and provides information using tools such as pie charts and graphs. At a glance you can find out how successful you are in reaching your financial goals. This type of account would be great for young people saving for a home or a car. It could also be beneficial for retirees who have an income of $2000 or more per month and like the idea of someone else doing the tracking of spending and saving.
There are now only a few banks that offer this and one of these is St George Bank. Read more here. As Frugal Frieda says “even if it sounds attractive make sure you do your homework and are getting the best interest on your money”.
While Frugal Frieda is not promoting a bank she does emphasise tracking your spending and tracking savings. It makes sense to track what we are doing with our money. If we don’t manage our money than our money will slip through our fingers and where it goes, no one knows!
Frugal Frieda and I are constantly surprised by the number of people waving around that small piece of plastic for a purchase and then waving goodbye to the receipt as the shop attendant places it in the bin. How do these people track their expenses and make sure there are no unauthorised transactions on their bank statements? Even with my ‘squirrel’ type behaviour of keeping every receipt and tracking expenditure there are times when one will go missing and I am trying to work out from the statement what the transaction is all about.
One major issue for Frugal Frieda is to keep a good record of expenses. It makes sense to do this as part of a budget management plan. Without tracking expenses and savings, it is easy to overspend and then wonder where it all went. Perhaps Frugal Frieda should put up her hand to help with the Federal Budget! For Frugal Frieda it is easy peasy to manage your money. On one side of the ledger there are expenses (outgoings), the other side what comes in e.g. salary (income). Frugal Frieda likes the simple approach. It is a simple mathematics formula, that is, subtract expenses from your income and savings balance. What you have left is what you can spend or better still spend some and save some.
If a bank can help with spending and saving that is a bonus and always something to consider without having to work it out ourselves. Frugal Frieda is pleased that a few banks are offering such a service to customers when all the time customers are getting less face-to-face services.
The banks are changing the way they do business with their customers. I found this out a few months ago when I visited a bank where all the tellers had been replaced with machines. The machines are very intelligent and efficient, they can count money quickly and with the press of a few keys your money has gone into either yours or someone else’s account. My first experience of this was quite traumatic as the money disappeared into the black hole of the machine before I knew what was going on. Fortunately, I have moved with the times and are now quite reasonably comfortable with the process apart from the receipt not giving me the details of where the money ends up!
As Frugal Frieda states “the world is in such a flux of change and we have to adapt to change rather than fight against it”. In adapting to the changes all around us we have to ‘wise up’ and start saving. The financial debt of everyday Australians is at an all-time high which tells us people are ‘spending’ rather than ‘saving’ and at times ‘spending’ more money than they have!
Frugal Frieda’s Tip: Keep a track of your income and expenses. Instead of buying something on a credit card and paying it off over months or years “save for it”! If you need a new piece of furniture look for a second-hand item or something on sale – once you have the money! It saves being anxious about debt. As Frugal Frieda says “true happiness is being ‘sense’ able and not overspending”. It is a simple formula and without all the strife a life of overspending brings.