I'm getting a bit back from tax and Centrelink so I'm wanting to save this money. Do I
a. Put it in a Christmas club account where I can't touch it? (I'm a big bad if I can access it and I see something I want/need I'll use it)
B. Put into my personal loan (downfall is I can't redraw these funds if something happens and I need cash)
C. Put half in the Xmas club and keep the other half in cash stashed at home
D. Stash it all at home.
I'm trying to save an extra $600 per month as well and I'm not sure what to do with this money either?
What options would you all choose? I'm keen to pay off my debt BUT I also want to have money if something happens as I'm a single mum and don't have anyone else to rely on for help if something was to come up.
If I can save this tax money and also the $600 a month I'll have $6000 by December which will be something that hasn't happened in a long time. Messy seperation.
What to do with extra funds
What to do with extra funds
Posted in:
Money
7 Replies
Open a sub account that you can put money into put cant spend? With mine its just an internet tranfer if i do need it, but its not habit to use it. Perhaps write down your goals to control yourself. Ie) christmas spending $1000. So you need to reach your goal of 1000 before you can purposefully transfer it out and spend it.
I know if i had cash at home a lot of it would disappear through everyday spending.
I'd suggest reading the barefoot investor - it gives great financial advice and helped us feel more in control of our money. We have a long term savings account in a high interest account with UBank. All of our other banking is with ING - transfers are set up automatically and because it's with a seperate bank it's kind of out of sight, out of mind
AGREE!!!
Why not do both, split it down the middle and put half onto the loan and half in the bank, then do the same with your savings,that way you can build up your money whilst reducing your loan so if something ever happens you will have savings plus may have paid debt off sooner or have some freedom to lower repayments, my hubby and I do this every year, half goes to something we need ( rego and new bed for child) other half goes into savings for a home- we lay by Xmas gifts so pay them off weekly so we don't spend the money we saved( it's in a linked account and we treat it as if it doesn't exist)
This is what I do, because I sound so similar to you.
When I get "extra" money I split it into thirds.
1/3 for Debts
1/3 for savings
1/3 to spend on whatever my heart desires
I found this way helps as I can be a bit frivolous whilst saving and paying of debts. Anything I don't spend on me within a month goes onto my debts.
Pay off loan
It depends on your longer term goals, what are you saving for? If you are trying to get a deposit for a house loan for example then you would need to start by clearing all your existing debts and demonstrate a savings history, which you can't do with cash stashed at home. Look into a progress saver account or similar, where you get awarded bonus interest each month you make deposits and no withdrawals, but you can still access the money if you really need it. But as someone else said, any interest you earn is being negated by interest you are paying on loan so try to sink extra funds into that to reduce capital and/or clear it if possible. And give yourself some spending money, just decide in advance how much that will be.