Saving for a rainy day has never felt more relevant.
According to CBA in 2020 Australians amassed a huge $200billion in savings (https://www.businessinsider.com.au/australian-pandemic-savings-spending-government-cuts-2021-1)
For those who were able to save this represents an average of up to 4 months living expenses. Not bad at all in a pandemic, and of course potentially at least in part due to government stimulus measures – free childcare, jobkeeper and jobseeker.
Amazing! We applaud this. But what should you do with it when deposit interest rates are miniscule?
Well the government would kindly ask you to stimulate the economy with it, but…
· An offset account is a great way to have this cash “offset” the balance owing on your loan saving you interest on that portion of the loan
· Some loans even allow multiple offset accounts – for those who like to segregate their savings
· Or, for loans that allow additional repayments and redraw – tucking it away out of sight, out of mind and saving interest is another good idea.
Financial wellness series with thanks to MFAA