BUILDING YOUR FUND
Step 1 - get rid of your lifestyle debt
Pay down any credit card and 'lifestyle' debt first.
Step 2 - automate your savings
Start an automatic savings plan to get funds into a savings account. This can easily be done through your online banking. Set it up as a regular automatic transfer, this way it will happen without you even having to think about it!
Step 3 - where to put your emergency fund money
You’ve told us you’ve got an extra (Please commit to a savings amount) each month to put into your emergency fund, which will be a separate account. If you have a mortgage your offset account is probably the best place for your money, or you can set up a separate emergency fund bank account:
Get the banking details (bank name and BSB, branch location, name of account and account number) for the account you will use to transfer money from, into your emergency fund.
Choose your preferred online savings provider, complete the online forms and open your account with the amount of money required – usually $20 or $50. Remember: the higher the interest rate, the more money your account earns and the quicker it grows. It’s a good idea to compare savings accounts using a site like Canstar to get the best rate, and make sure it has the ability to create an automatic savings plan.
Set up your automatic savings plan, entering the amount you want to contribute, how often and the details of the bank account it will come from (point 1. above).
Once the application process is complete you’ll receive confirmation details about your new account via email or post, and you can start to watch the balance grow as you make your monthly payments.
Setting up a mortgage offset account
Contact the bank where you have your mortgage and ask to set up an offset account. Make sure you understand how it works and what it costs to use.
They can usually set up this over the phone for you or you can visit a branch in person. You can also set it up through your mortgage broker.
Ask your bank or broker to set up a monthly payment to reach your savings goal. Alternatively you can do this via online banking.