Take control of your finances: A guide to smart, systematic banking.
Want to take control of your finances and achieve your financial goals sooner rather than later? A well-organised and systematic approach to managing your money could be the answer you’re looking for.
We’ve described two different systematic approaches to banking below. The first is a guide for people without a mortgage and the second is a guide for people with a mortgage.
The best approach for you will depend on your personal circumstances and what you are trying to achieve, considering things like how many bank accounts you have and what types of accounts they are.
If you don’t have a mortgage.
If your objectives are to control your money and maximise the interest you earn, and you don’t have a mortgage, this approach could be for you.
For everyday transactions and spending.
Use a Transaction Account for everyday transactions and spending. It should be the hub of your banking, with money coming in when you get paid and going out when you spend it or pay bills. You should shuffle any excess money from this account into your high-interest savings account to maximise the interest you earn. You could even look to automate this process to save time and effort.
Try to use a fee-free transaction account that supports a wide range of transaction types including a debit card, ATM and EFTPOS access, internet and mobile banking and branch access if you need it.
Check out the Beyond Bank Purple Transactor Account as an option that supports a wide range of transactions and has no account keeping fees.
If you have good financial habits and a consistent income, consider using a credit card for everyday transactions. This isn’t a suitable option for everyone and will only work if you have the discipline and cash flow to pay off the credit card in full before the due date each month. If you’re at all worried about your discipline and cash flow, stick with the transaction account and only spend the cash you have.
If you are going to use a credit card, use a low fee, low interest rate card that gives you an interest free period of at least a month.
Check out the Beyond Bank Low Rate Visa Card as an option, with its low interest rate and up to 62 days interest free.
For paying bills.
If you want extra control to make sure you have the cash available to pay your bills when they are due (or to pay off your credit card before it’s due), consider setting up a separate bills account. You can transfer money into this account to keep it separate from your spending money to provide certainty come bill time. Make sure you are putting aside money regularly to meet larger, less regular bills like your car registration, car insurance and home insurance. When the bill is due, pay it from this account.
If you use a bills account, you’ll probably have money in this account for short periods of time before you use it. It makes sense to use a savings account that pays reasonable interest and provides some flexibility for withdrawals (many high-interest savings accounts only pay their bonus interest if you’ve made no withdrawals).
Check out the Beyond Bank monEsaver account as an option, it pays interest on your balance and has no minimum deposit or withdrawal requirements.
Where to keep your savings.
When you have more money in your transaction account than you need for immediate spending or bills, move it into a high-interest savings account to maximise the interest you earn. These accounts often have a low base interest rate, a relatively high bonus interest rate and eligibility criteria to earn the bonus interest. Make sure you understand the criteria and can satisfy them most of the time, otherwise, you’ll miss out on your bonus interest. If you have to make a deposit each month to get your bonus interest, either set up a recurring transfer in internet banking or put a recurring reminder in your calendar.
Check out the Beyond Bank Purple Bonus Saver account as an option. It pays bonus interest when you deposit at least $50 and make no withdrawals in a month.
If you have a mortgage.
If your objectives are to control your money and minimise the interest you pay on your mortgage, this approach could be for you.
Your mortgage.
Make sure your mortgage has the features you need and the lowest interest rate you can negotiate. For this systematic approach to banking to work, you’ll need a mortgage that allows at least one offset account and have your income paid directly into it.
Check out the Beyond Bank Total Home Loan Package – Fixed or Beyond Bank Total Home Loan Package – Variable, both have competitive interest rates and the option of an offset account.
For everyday transactions spending and bills.
One approach is to have your everyday transactions, spending and bills paid from your offset account. Using this approach, you’ll keep money in your offset account until you spend it, reducing the interest you pay on your mortgage.
If you have the discipline, you’ll get an even better result by using a credit card for your everyday transactions, spending and bills. The more of your everyday spending you can put on your credit card the better. But don’t overdo it. This is not a license to spend more – you want to spend as little as you can – but when you do spend, put it on the credit card. Then, use money from your offset account (remember this is where your income was paid into) to pay off your credit card in full before it is due each month.
If you are going to use a credit card, use a low-fee, low-interest rate card that gives you an interest-free period of at least a month.
Using this approach keeps your money in your offset account even longer by utilising the interest-free credit on your credit card.
Check out the Beyond Bank Low Rate Visa Card as an option - it has a low interest rate and up to 62 days interest-free.
Where to keep your savings.
Using this approach, you’ll keep your savings in your mortgage offset account. You won’t earn interest on the offset balance, but you’ll reduce the interest you pay on your mortgage. This tactic works because the interest rate you pay on your mortgage is higher than the interest rate you would receive from having the money in a savings account.
Check out the Beyond Bank Total Home Loan Package – Fixed or Beyond Bank Total Home Loan Package – Variable, both have competitive interest rates and the option of a Beyond Bank Mortgage Offset.
We're here to help.
Remember, the success of these two systematic approaches to banking depends on your circumstances and your ability to commit to them.
If you have any questions about the above approaches or wish to talk through any of our Beyond Bank offerings, get in touch with one of our consultants and we can step you through the process. Remember, we’re here to help.
Please read this important information.
This information is of a general nature only and does not take into consideration your objectives, financial situation or needs. The information must not be relied upon as financial product advice. Before acquiring any product, you should read the relevant guides, Product Disclosure Document, and consider whether a product is suitable for your circumstances to decide if a product is right for you.
