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Need some help saving? Try not thinking about it.

Many people make the mistake of spending first and saving last. The problem is that there is no limit on the number of things that we could spend our money on. Spending first and saving last becomes spending everything and saving nothing.

Happily, there are a number of simple solutions. One of the simplest solutions is to establish an online saver account. As the name suggests, an online saver account can only be accessed electronically via the Internet. Usually, an online savings account needs to be linked to a regular savings account. Money is then moved electronically between the two accounts. Only the regular savings account can actually facilitate cash withdrawals via an ATM or EFTPOS payments using a plastic card. That is, money in the online savings account cannot be accessed immediately – it needs first to be transferred to the regular savings account.

Usually, this kind of transfer takes 24 hours to effect. This means that it is not possible to spend money in an online savings account impulsively – you actually need to plan to spend that money. What’s more, you need to ‘sleep on it’ at least once before going ahead with a purchase. This gives you the best chance to manage any temporary impulse you get to blow your dough.

Online savings accounts work really well in conjunction with regular direct debits. For example, if you are paid on the 15^th of each month, this money will typically be paid into your regular savings account. You might then organise to direct debit a targeted savings amount from your regular savings account into the online savings account on the 16^th of each month. If you have a savings target of 20% of your income, and you are paid $5000 per month, this would mean direct debiting $1,000 into your online savings account soon after payday each month.

The beauty of direct debits is that you can organise many of them at one time. For example, you can organise monthly direct debits for the next 12 months. The transfer of money will take place provided there is sufficient funds in your regular savings account. You don’t have to remember to save – and you particularly don’t have to remember to save after you’ve been paid and when your cash is available!

Basically, you let a silicon chip do the remembering for you.

Because they provide little in the way of services (such as ATMs and physical bank branches), online savings accounts can often offer a higher rate of interest than you get with a regular bank account. At the moment, interest rates are low everywhere. But it is better to get even 1 or 2% more on your savings and to get nothing at all.

Online savings accounts are offered by many banks and similar institutions. Some require you to have a regular savings account at the same bank; others do not. Interest rates and other features vary from account to account. So, if  an online savings account would suit you or somebody you know, why not get in touch and let us help you establish a regular, painless savings routine that will reap big rewards in the end.