Sometimes, despite your most diligent saving plans, life gets in the way.
This happens especially around certain life junctures – such as when you want to buy a property, when you’re saving to have a family and when you’re putting money aside for retirement.
With recent statistics revealing 31 to be the most expensive age (thanks to many of these life milestones taking place around the same time), Sydney-based financial advisor, Canna Campbell, revealed how to save for the three priciest stages of life.
Canna – who is the author of The $1,000 Project – managed to save $36,000 in just 13 months by putting aside ‘parcels of $1,000’ from her own salary.
Sydney-based financial advisor, Canna Campbell (pictured), revealed how to save for the three priciest stages of life – the deposit, the family and for retirement
When you save for a deposit, Canna (pictured) advises starting as early as possible – she said even putting away ten per cent of what you earn each packet makes a difference
Canna Campbell’s money-saving tips
* Start the saving process as early as possible in order to make it less painful.
* Sell off unwanted items in your clothing collection or old furniture.
* Pick up some extra work, whether it’s a weekend job or freelancing.
* List your skills on Airtasker.
* Get creative with ways to make money – you could list your home on Airbnb.
* Take your lunch to work.
* Entertain at home rather than going out.
* Set up a separate savings account so you are not tempted to spend your hard-earned savings.
* Review and subtract living expenses often, so you can reduce and subtract expenses that you no longer value.
* Increase your savings by the same amount you subtract from living expenses.
* Be prepared – start thinking about your future and set aside money for it.
* Build additional income streams beyond retirement accounts – whether it’s from an investment property portfolio or shares.
1. The deposit
The first life milestone that you might come up against is saving for a deposit.
For this life stage, Canna told FEMAIL you should ideally have a 20 per cent deposit saved up, alongside some buying costs for your new home:
‘Start as early as possible and make the process easier and more enjoyable as a result,’ she told Daily Mail Australia.
‘Even putting away ten per cent of what you earn each packet makes such a big difference.’
For those looking to kickstart their savings, Canna recommends ‘selling off unwanted items and picking up some extra work – whether it’s a weekend job or freelancing’:
‘Even listing your skills on Airtasker is a great income earner,’ she added.
For those who want to take a serious approach to saving, you could try out Canna’s $1,000 Project, which is the subject of her new book on the subject:
‘The $1,000 Project was a financial challenge that I set myself whereby I took on one big goal, and broke it down into mini, manageable and therefore achievable goals of coming up with $1,000 at a time,’ she told FEMAIL.
‘There was a catch though – none of the money could come from my salary or savings. I had to get out there and come up with creative ways to make extra cash and save extra money.’
For those who want to take a serious approach to saving, you could try out Canna’s $1,000 Project, which helped Canna to save $36,000 in 13 months (stock image)
For Canna, she did this by renting her home out on Airbnb, taking her lunch to work, selling clothes and furniture online, working at the weekends and entertaining at home rather than out:
‘I opened up a separate dedicated savings account to put this newfound and created money aside, so that I would not be tempted to spend it,’ she said.
‘The moment I had $1,000 saved up, I invested it. The investment I chose was shares and ETFs. I shared the portfolio on my website and YouTube channel and over 2.5 years, I invested $68,000.
‘The passive income is now over $3,600 per annum and growing.’
For the $1,000 Project, Canna (pictured) had to get creative with earning money outside her income; she did this by renting her home out on Airbnb and working at the weekends
2. The family
The second life stage you might find you need to save more money for is the family stage, when many couples are choosing to settle down and save for children:
‘For the family stage, preparing to see what the changes are going to be when it comes to having children and potentially dropping down to one income will help you work out how much you need to save up and how long it will take,’ Canna explained.
‘Preparation is key.’
The second life stage you might find you need to save more money for is the family stage, upon which point Canna (pictured) explained that preparation is key
Speaking about how best you can be prepared, Canna recommends you ‘review your living expenses, and where you can reduce or subtract expenses that you don’t value’:
‘Increase your savings by the same amount, putting the money into a separate savings account,’ she said.
Once again, this is the wisdom behind the $1,000 Project – when it’s not in sight, it’s out of mind.
‘The $1,000 Project is a great challenge to do where you create the goals, rules and rewards,’ she said.
‘You can use it to save for IVF, getting out of debt or your growing family.’
‘For people planning to retire, getting professional advice is definitely worthwhile, but also being informed makes a big difference to your financial decisions,’ Canna said (stock image)
The final life stage that might eek significant figures from your bank account is retirement.
‘For people planning to retire, getting professional advice is definitely worthwhile, but also being informed makes a big difference to your financial decisions,’ Canna said.
‘This includes how much much you want to retire on and how much you need.’
The financial advisor highlighted that there are plenty of retirement calculators online which are free and will give you some sort of idea of goals to work towards:
‘Start putting aside money for your future when you’re thinking about retirement,’ Canna said.
‘Really know what your cost of living is and build additional income streams beyond your retirement accounts.
‘This may include building up an investment property portfolio, shares or simply cash.
‘You must invest in line with your goals and risk profile and of course never do anything you don’t understand.’
To read more from Canna Campbell or to find out more about her book, you can visit her website here.