Five ways to boost your savings this financial year

“The strategies that work best for you will be dependent on a range of factors – your goals, your circumstances, your behaviours,” says Olivia McArdle, Head of Payments and Deposits at Macquarie Bank. She shares five ways you can boost your savings this year.  

1. Make it manageable: Making plans is important, but sticking to them is where you see results. Reflect on your spending and savings habits from last year and be realistic about what works for you, and what doesn’t.
2. Review your silent spending: Do you regularly pay for subscriptions you don’t use or a membership you don’t need? Has it been a while since you last reviewed the deal you’re getting on your utilities and insurance? Take a look at those payments as though you’re signing up for the first time and consider if the costs are worthwhile and competitive.
3. Supercharge your set-up: A competitive interest rate on your savings is one relatively straightforward way to build on your savings throughout the year. But are you actually receiving the rate you signed up for? Check the fine print of your set-up and look for options where you don’t need to meet a range of conditions to receive the rate you want.   
4. Bucket and budget: ‘Bucketing’ is a common strategy, involving dividing your savings into separate accounts, each with their own purpose. For example, you might have one account for everyday spending, one for a home deposit, and one for a holiday fund. This can also work as a budgeting tool, as you can clearly see which goals are on track – and which need some attention. 
5. Track, track, track: Over the course of a year, you might be surprised where your money goes. Tracking your incomings and outgoings helps you stay laser focused on your goals, and what spending and savings habits are helping or hindering you in reaching them.

“Finally, no matter what your strategy, keeping your money secure should be a top priority,” says McArdle.  

“Make sure you’ve got your layers of defence on your bank accounts lined up, such as multi-factor authentication.”  

Pulse check: what are other savers doing?

Data from the final few months of the 2024 financial year is in, showing that individuals and households are responding to a higher cash rate environment and tighter cost of living conditions.

• Scanning the market: Earlier this year, almost three in four savers were checking if their interest rates are competitive.¹
• Stagnating savings: Households saved only 0.9 per cent of their income during the March quarter.  This contributed to total savings remaining below 2 per cent for a year for the first time since the March quarter of 2008.²
• Essential spending: Household spending rose 0.4 per cent in the March quarter. Spending on essential services was a contributor to the quarterly rise - spending on electricity and gas rose 4.9 per cent.³

FY25 standouts for savers

We are in a relatively high cash rate environment in Australia, translating into higher interest rates on bank deposits compared to years gone by.

For some context, at the beginning of 2020 the cash rate was 0.75%, and it didn’t move beyond 2% until September 2022. Since then, its overall trend is up, moving above 4% in June 2023 where it has stayed since. 

It's worth familiarising yourself with the market and ensuring you’re making the most of the higher rate environment.

Also, conditions at the moment – though challenging – are relatively stable compared to the beginning of the 2020s. During that period, the cash rate was regularly moving in response to the emergency conditions of the pandemic, and inflation was climbing to highs we hadn’t seen since the 1980s and 1990s.

There’s no guarantees with market or economic conditions, but at the moment, the mid-point of the 2020s is more stable than the start.