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What’s your saving style?

Understanding your attitude to putting money aside could help you on the road to better saving.

5 minute read

Saving can be hard – especially when money is tight. When you do feel in control of your money and have extra left over after your day-to-day expenses, choosing what you do with it is likely to come down to your saving style, and how closely you look at your finances in general.

Understanding your saving personality and how you could make changes might be just what you need to start becoming the saver you've always wanted to be – so you can be better prepared for whatever life throws at you, and ready to reach your goals. What’s your saving style?

Novice saver

As a novice, you’re new to saving and might not really know how to go about putting money aside. You probably have good intentions, but money seems to get spent as soon as it arrives. This means you save very little or not at all, and could even spend more than you earn.

If you do ever get a windfall, it’s likely you'll have one thing in mind – spending. In fact, your tendency to buy rather than save means it can be too confronting to look at your bank statements.

If you’ve ever started saving, chances are you’ve taken a break when the perfect spending opportunity came along. That’s because you may prefer to live life in the now, and tend not to focus on the future.

Tips:

• Before you think about saving, you may need to focus on paying off high interest debt - this may include debts such as credit cards, store cards, and personal loans.
• Review your household budget. See if there’s anywhere you can make savings, after covering household essentials (such as mortgage, rent, food) and your utility bills (things like power and internet). One way is to find free budgeting information at Money Talks or Sorted. Money Talks is an independent and confidential service which is completely free. The financial mentors can help you with confidential advice and talk you through your options for getting on top of debts and covering the essentials.
• Set up an emergency fund as soon as you can to help cover any unexpected expenses that might come your way.
• Open a savings account and put in place an automatic transfer that comes out of your salary or wage account on pay day.
• Start small and build up – it’s better to start saving now than never at all.
• Think about the long-term and make sure you’re also enrolled in KiwiSaver – if you’re working and put money in from your pay, in most cases your employer must also contribute at least 3.5% of your regular pay. You could also be eligible to get up to $260.72 from the Government into your KiwiSaver account each year. Just keep in mind you’ll only be able to access your KiwiSaver savings in specific circumstances, which may include buying your first home or when you turn 65.

Amateur saver

It’s not that you don’t think about saving, it’s just that you might do it half-heartedly – in a putting spare change in a jar kind of way. Having said that, you like to live within your means and probably don’t have a credit card. If you were to get some extra money, you’d probably put it towards something useful, but wouldn’t necessarily save it.

You do think about your finances, though, and check your bank statements occasionally – but mostly to see what your balance is. Although you can be tempted to spend, you’re sensible about it.  When it comes to long-term planning, you’d like to save for retirement, but don’t feel you can. 

Tips:

• Make the most of online banking technology to understand how you use your money. Some banks have money trackers which group your spending into categories like groceries, entertainment, and eating out, so you can see how much you spend on what.
• Classify your spending into wants and needs to see where you could make savings.
• Research different savings accounts and find the best one for you. You could also talk to your bank about which savings accounts are more likely to be suited to your needs.
• Set a realistic savings goal and track your progress online.
• Think out of the box to see how you could add to your income – like selling things you no longer need, or turning that hobby into a side hustle.

Semi-pro saver

Saving isn’t new to you. In fact, you put a little away each month to save for big purchases, like holidays. For less expensive items, you use your credit card every now and then but always pay the balance when it’s due. 

If you were given birthday money, you’d probably put half of it in the bank and use the other half to head out for a nice dinner – life is a balance after all. If an opportunity for an unplanned holiday came up, you’d try to delay it by a few months so you could focus on saving for that sensible car instead. 

When it comes to keeping track of your money, you’re pretty good at checking your statements to make sure you haven’t overspent. You have a KiwiSaver account but don’t think about it too much. Overall, you pay attention to your finances, but saving can be hard.

Tips:

• Sit down and make a long-term plan.
• Set some spending limits where you can, and try to trim back on costs – start by setting up a budget.
• Depending on your long and short term goals you may want to consider putting some of your money into a term deposit. By locking it a way at a fixed interest rate you may earn higher interest on your money in comparison to a savings account.
• Review your KiwiSaver fund and fees at least every two years (or if your KiwiSaver goal or situation changes), and find the best option for you.

Pro-saver

You put money away each pay day and have a clear savings plan which you stick to. You’re disciplined with your spending and go through your online banking like a forensic detective, cutting down on non-essentials if you need to. 

You buy most things on your credit card to get the rewards it offers, but pay it off in full each month to avoid being charged interest. If you ever get a bonus, it goes straight into your savings account to start earning interest. In fact, you're so goals-focused, unplanned spending just isn’t a consideration, and you save almost every spare cent you earn.

This is also true when it comes to retirement planning – you pay close attention to your KiwiSaver account and put in extra money whenever you can, and might even have other investments like shares or a managed fund. You’re on top of technology too, making the most of any new saving or investment tools you can find. 

Tips:

• Regularly evaluate the structure of your savings accounts or investments to help you stay at the top of your game.
• You may want to consider putting your money in a managed fund if you don’t already have one. This could be a another way of growing some of your savings through investing if you don’t want your money locked away until you’re 65.
• Work out your net worth, which is the difference between the value of what you own and the total amount that you owe. If you know your net worth, it’ll help you track your progress and make financial goals. You can improve your net worth by reducing your debt, saving more, or both.
• Make sure your goals are clear and you’re saving for the things you really want in life.

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