[!@#$%!]

Originally Posted by choc e-Claire

Heh, thanks

At this point I have two main savings goals - a guitar and a trip to Germany. No timeframe or cost on the guitar (it's just a daydream, pretty much), but I'm going for $4,000 for the holiday and I'm doing it in November 2020 after I finish Year 12. I should easily have enough money.

And I'm trying to cut down on my impulse spending :P

haha you gotta budget a little for impulse spending. can’t live like a nun. right? asceticism is hard.

the trip sounds like a ton of fun and you should be in track for it. but it’s still an expense, just a deferred one, not savings proper. but still you have to accumulate your money, yes?

your inflation looks like 1.5-2% a year.
https://tradingeconomics.com/australia/inflation-cpi
and that’s the rate at which your dollar loses value if you just hold it. your paycheck loses value also unless you get a raise. roughly $80 off your intended $4k in 12 months.

the inflation rate is just an average. inflation can be different for different items though. e.g. if fuel costs rise 25%, your airplane ticket could follow the same way.

savings accounts in australia seem to barely keep up with inflation, but this one for utes pays a little more:

https://bankaust.com.au/tools/rates/accounts/mySaver/

 

i’d shop around for a good rate for the main savings. you wanna stay ahead of inflation.

but if you want your money to work for you, instead of you always having to work for your money in that sweaty parking lot, then maybe use another 10% for “risk capital”? stock returns are not guaranteed, especially in the short term, but they can also pay a lot more than savings accounts if you hold them for the long term.

see:
https://tradingeconomics.com/australia/stock-market
look at the monthly chart. your homework: tell me what was the percentage grow of that index year to date.

for this maybe your dad could help. you’re good with numbers and that’s a valuable talent. use that to your advantage.

so anyway, since you don’t have to support yourself yet, you could have a ratio like:

10-80-10 (fun money-trip-investments)
or 10-10-70-10 (splitting trip & guitar)

or whatever other ratio works for you.

but ratios are a great way to organize your money in a balanced way that feeds your goals and wishes, if that makes sense.

i use a grownup version (lol) where i budget needs/wants/savings (because i have to pay for food, housing, transportation, etc., as well as invest).

the wants part is extremely important because otherwise life would be no fun. but it’s confined to a ratio, see. so there is discipline to it.

anyway just some thoughts for you, free of charge haa haaa haaa