A Simple Straight Forward Plan To Save
Here is a sure fire, real simple savings plan to get you on the road to investing and saving for the long-term.
Open up an online, high-interest earning savings account (most banks have them and you will be earning around 6-8% interest free of any fees) and start transferring as much as you can into this account. Set up a weekly (or fortnightly or monthly) transfer into this account and forget about it until the total in it hits $1000.
Take this $1000 and place it into a term deposit account (I recommend and use the Suncorp FlexiRate account), making sure you are earning more interest than in the online account. Lock it in for 3 months and in the mean time continue to save your next $1000 in the online account.
Each time you hit $1000 place it into a term deposit account until you have $5000 in total.
Upon Reaching $5000 invest it in an Index Fund and start placing 50% of you savings into this fund each month (you can transfer a minimum of $100 per month via BPay with Vangard Index Funds).
Continue creating $1000 bundles with your online savings account and placing them into Term Deposits until $5000 is reached again. With this new $5000 open up an overseas-invested Index Fund. Funnel 25% of your savings per month into this fund.
With what is left of your base savings (should be 25%) continue creating $1000 bundles with your online savings account and place them into Term Deposits. Bundle these up when $5000 in reached and funnel the final 25% of your savings into these FlexiRate Term Deposits. This will be the cash portion of your investment portfolio.
After all this is achieved, not only will you have a nice nest-egg with which to build upon, but you will have a nicely diversified portfolio as well.
That’s it! Easy, isn’t it?
Have you ever thought about a savings plan?
Image credit: mtowber
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Seems a bit complicated, but it would probably work. I do pretty much the same thing, but just leave the money until I hit $5k in my savings, then I transfer it over to my Vanguard mutual fund.