So, how can you waste away your savings? I mean, wouldn’t you have to spend it to waste it? Or is this one of those armageddon articles that tells you that everything is horrible and the world is going to end and you need to hide all your money under your bed before everything implodes? No, this isn’t one of those pieces but yes, you can waste savings even if you don’t spend it. Just give me a couple of minutes to explain.
In my experience, while working at a bank, I have seen too many times for my liking and I have to admit, it’s a little infuriating, as some people willingly choose to throw away thousands of dollars per year. Yes, this happens all the time and yes, I do explain to them how to stop this, as if I didn’t, I’d be horrible at my job.
However, for reasons I don’t want to touch on too much (honestly it sometimes comes down to just laziness but that’s quite rude to say), this continues to happen. The worst part is after I tell people that it’s happening to these people, they then continue to willingly allow money to just disappear.
So, this is a piece that I hope someone will use to learn from and potentially prevent the same mistake from occurring. By the way, this is not financial advice and honestly, you shouldn’t be taking financial advice from a random person on the internet. I.E. I am the random person at this very moment.
So, what have I made you read four paragraphs for? Well, it’s simple, where are you storing your money? If the answer in your head was not a high-interest savings account, you’re one of the people wasting away your savings. Think about it, if you’re saving, your money is just sitting there anyway so, why not earn money from it sitting there. I hear millennials (i say millennials as a millennial myself) trying to make “passive income” through YouTube, a blog or Shopify but this probably the easiest way to do it.
With interest rates continuing to drop in Australia, the amount you make isn’t enough to live on. Unless you have millions in your account that is. However, that doesn’t mean it’s a waste of time either, as you’re not really doing anything. You can set up automatic payments that send money to that savings account just after you get paid using internet banking, which means you don’t even have to think about it either.
However, the reason most people (usually older less tech-savvy people) chose to not do this is that they must step out of their comfort zone to start this. Most of these accounts are managed best online and if you think the internet is scary, then this may be daunting. However, I just want to point out that just because learning how to use internet banking may seem daunting, it doesn’t mean that you’re not wasting an opportunity here.
I have seen people with hundreds of thousands of dollars sitting in a debit account, which earns them no interest at all. I have helped set these people up with savings accounts and when I check up on how they’re going with it all, they haven’t used it. One time, a customer had blown away $1,500 by not using the account, as in the time between me setting it up and then speaking to the next, it’s the amount they would have earned from interest.
If internet banking isn’t your thing, which makes transferring money from account to account, also not your thing. Maybe ask your bank of other ways to manage your money but by not having your money stored in a location that helps you earn interest with minimal effort, you’re essentially doing yourself a disservice.