I'm a 19yr old full time uni student and I have around 3 grand in savings at the bank (commonwealth) and I make around $250p/week from my part time job.
My question is, what's the most efficient use of my money at this current moment?
3 grand savings - What's the best use of my money?
LSteve238 on 09/02/2014 - 18:50
Comments
Doesn't Commbank require a minimum of $5000 though? Or are you referring to another bank (cus I'm also interested!)
Ah, I wasn't aware of the limit. My mistake.
Hi there, if you're saving I suggest:
Opening up a Goal Saver Account (via netbank) which can earn you 3.91% interest
Conditions:
1) Must deposit a least $200 per month to get the bonus 3.90%
2) Only withdraw once (max) per month but also deposit that amount + $200 for the bonus interest.If you can't manage that, netbank saver provides 2.5% interest p.a
With the goal saver you'll get around $10 interest per month with your current amount. (It'll rise).
By the way, are you eligible for youth allowance/study benefits?
EDIT: Do NOT get a Term Deposit with that amount.
many other financial institutions offer much better rates with less restrictions
The OP is already with CBA.
Well, if you're going to do that, then do it at UBank for more interest and with more withdrawals.
Dont forget to take 2.5% inflation into account. So, even in a 3.91% interest account, you're only making a 1.41% profit. Something like $60 a year?
silver. currently $20 oz.
altomic, where/how do you invest in silver (and gold)?
what's the most efficient use of my money at this current moment?
beer, blackjack and cheap hookers?
So you think you will be better off getting nothing under your mattress rather than the $0 the tax man will claim? Read the post, the OP earns under the tax threshold.
Where do you buy your tinfoil hats from?
Even if the OP were above the tax free threshold, this is bad advice…
The tax man would only be looking at the $50 interest and you'd still be better off (clearing at worst $25) than having it under your mattress earning $0 interest
nice, i'm in a similar situation man - also poor uni student :p i also thought term deposit is your best bet (albeit nothing special). although tbh some of the rates aren't that great (couldn't find much more than 4% for 1-2 years). the ubank usaver account is pretty good at 4.26% though, although i'm not too sure about any T&C's
Interest rates are low at the moment…
I'd suggest going on a overseas holidays 2014-2015 Summer holidays. 3k is enough for an Asia or Europe tour. I mean, if you've got the stable income, the interest from your money is hardly anything (close to $10/month like AntiSlavery said).
If you have any debt, pay it off first (unless it's hecs).So, for this year, put it in an online savings account as per BanSlavery, then at the end of the year, go on a travel tour. Trust me, after uni, you won't have an opportunity. Now's the best time to go with your 3 month holidays.
Gains/Losses of going: $120/year, plus your $3k reserve OR see the world, have the time of your life with your mates.
Hell I know what I'd do.
(Similar position. Planning a North America or Europe trip for 2015/2016 when I graduate)
Agreed, use it for travel. I traveled in my 20s after Uni and had the best time of my life.
Now I am married with a mortgage etc and look back at those times fondly… you have plenty of years ahead to worry about what high-interest account is the best, have fun now while you can!
this some u should traveled some i look back now to that have bill to pay.
+1 for travel before full time employment or regret it :(
I spent $3k on a 2 week tour to Vietnam. Didn't regret a cent / day of it.
Also, take any opportunities your uni degree gives you to go overseas. Study tours, exchange programs, internship opportunities etc. I had friends who took them and all had very positive experiences, and it gives you something to talk about to your future employers.
How? I was there for 3 weeks, and only scraped through with $1k, and ate/drank/went places at all my stops.
It was a uni study tour. The $3200 included insurance, air fares (also covers air travel between Da Nang, Hanoi and HCMC), plus a whole bunch of activities, and included some meals.
Do your uni study tour. i did last yes we did new york and Germany it was only 1,200 for me are all free money. 4 weeks i did summer school in Germany that hell of good thing future employers. i went one top design school in the world.
Bitcoin
Risky investment but possibilty of huge returns.
The price apears to be close to the bottom of the dip before the next big price surge.I do recomend you spend it on travelling while you can.
Buy $3K worth of cocaine, then flip it for $4K, rinse and repeat.
Might as well kill the buyer and keep the $3K Coke and then repeat.
I'm in pretty much the same situation and I'm just keeping it in the bank. Only have $4000 and get like $8 a month in interest.
Edit - Also I am doing that 52 week money challenge. It's just save the dollar amount on which week it is. E.g. Week 1 = $1, Week 12 = $12. If done correctly it will add up to $1300+
You're more likely to snort the cocaine than you are to kill the dealer, so you're probably going to be at a loss.
If you do not intend to use the, or only using some, ever thought of super-annuation?
If you do not intend to use the money, or only using some, ever thought of super-annuation?
the OP may well die before the age of 65. i'd be inclined to utilise the money instead of hoarding it for someone else
Terrible advice for a young person.
Super will charge them 15% tax on any income, and is locked away until age 55 at least, and I expect will be made equal to the age pension, 67yrs, in the not to distant future.
If you want to maximise the compounding of long term savings, invest now in the highest low risk interest rate while the interest is tax free, then move the lot into super when your marginal tax rate exceeds 15% when you are hopefully earning full time.
In the real world, however, I would take the advice up thread to travel while you can do it cheap and easily.Whoa, one negative vote already. Is it because I double-posted or bad advice? (Pls help, I cant delete the duplicated post.
Another thing I forgot to mention is that I have benefited from Super Co-contribution. Must admit I am not a super expert, so read here for more details: http://www.ato.gov.au/Individuals/Super/In-detail/Contributi…
Depending on the OP's other circumstance, super can be a forced-savings. Every now and then I bumped into someone over age 60, and they often feel sorry that super wasnt fully implemented when they were young.Problem with Super is that it's locked away and you can't get it back again.
At 19, it could be the start of a house deposit.
Spend it. 3k that took you how many years to save? Once you're working full time, 3k could be 2 weeks pay.
…the MORE you can save into super when your young the MORE you will have when your 55+! Plan for this time, not for the time in between because its easy to live cheap with any job but come 55+ and you may have to live on what you have saved now (what the gov give is a pittance and thats of you surrender all your privacy and you qualify and they dont change the rules)
dont tithe, its theft by your church but save it into your super if your ok with it being locked until 55-67
buy silver, an ounce at the time (the return will be higher than gold over time)… Its not locked away, easy to hide (bury) and the return over >20 years is awesome!
bank interest, term deposits are for day to day cash, its CRAP for making money but its ok for saving (for super/silver/shares) as inflation isnt much less and so you make almost nothing even at advertised rates of 4%, with INF@3% or more…
Agreed. Inflation is very important to consider and inflation makes it especially important to at the very least put your money into at high interest paying account. High interest accounts should not be looked at as ways to earn money but rather to help prevent the money you do have from being eaten away by inflation, taxes and fees.
As an example let’s assume your money is currently in a CBA netbank saver account earning 2.50% interest. After inflation your money is still going to be worth less at the end of the year than it was at the start because the rate of interest you are earning is less than the current rate of inflation which is currently 2.70% http://www.tradingeconomics.com/australia/inflation-cpi
So you need to be earning “at least” 2.70% interest just to be standing still, more if you were earning enough money from your work to be paying tax or you chose an account that had fees and penalties.
Although depending on the amount of starting money you have and then amount you can save per week you may be limited in your choices.
Save $1000 (into an high interest account) and when you have another $250 transfer that into the interst account and BUY, INVEST or contribute $1k to SUPER., INVEST, METALS..
SUPER, setup your own or when you have say $30k do it then, transfer the money and invest in property/rental with a SUPER loan
INVEST buy shares, just pick your poison but ROE (return of equity) and DIV (divetend, franked tax prepaid) should become the first things you educate yourself on. managed trust if you want property but not through super
BUY silver, gold and sit on it… every bit counts and come the crash (which will come once in your lifetime) you will be rich enough to buy whatever you want or need….
TERM DEP (good if you suspect you want a new mb every 6 months) but crap, advice on high month to month savings rocks IMO!
Pay your uni fees in advance if you can (you also receive a discount).
You will be grateful you did when you start working full-time
Discounts are gone, since 1/1/14.
Nope you're wrong. The bill didn't pass the senate. The discounts are still in effect, as is the centrelink youth allowance start up scholarship.
In any case prepaying your HELP is pointless. It is the cheapest loan you will ever get. If you put the money you would have spent on your HELP debt into a savings account for the year, the interest income will be higher than the increase from indexing of your HELP debt.
When you start working full time your employer will withhold the relevant amount of Tax to cover the amount of HELP you will be required to pay based on your income. Provided its done right by your employer, you'll never have to pay a cent other than the amounts withheld from your pay each period.
source - i'm a tax accountant
You used to get a 25% discount for paying upfront…
That's pretty hard to beat if it's still the case.It's now 10% upfront, and 5% if you do incremental payments
for most people you can usually earn more by investing the money because its only adjusted for inflation and eventually your earnings will outweigh the discount anyway
Apologies, discounts are gone when senate passes the bill (one for repeal day maybe?)
They won't send it back in its current form. Not worth the risk. For the immediate future though the discounts remain.
Come the age of 25/26, you will have many many things that this money would be helpful for.
My tip? I would aim to grow it each and every month and simply stash it in a high interest account or a notice saver if you don't trust yourself.
I am not saying this is the smartest use for your money, I am simply saying that I can't tell you how much I wish someone else would have given me this same tip many years ago.
I'm also 19. In 2007 I launched a website and offered online services. You don't have much to lose at this age and there are plenty of opportunities. Consider selling some imported products on eBay/Gumtree. Learn coding as an extra skill it will be great for the future. I started with $150 at the time for hosting and it was the best investment I made. Interest rates are too low, if you don't have the time to do this consider a stable blue chip share like telstra with a 4.7% div yield. Hope I helped.
it was the best investment I made
What kind of return are we talking about here?
I'd rather not go into specifics. The general point was that he has a lot more to gain if he invests that money into it. The website purely relied on Ad impressions.
Invest in yourself. Travel.
19 is the perfect age to start.UBank.com.au
If you're thinking about investing then $3k isn't really enough. You could buy a kilo of silver but it doesn't pay interest and quite frankly the price performance has been miserable over the past 3 years.
If you're feeling extremely adventurous perhaps a bitcoin or two?
you can do a lot with the 3k! i'm assuming you're still living with your parents therefore any expenses such as rent, food, etc is covered by your parents. So the $250 you make from work is all yours.
what you can do is:
1. Open an account with nab(NAB Reward Saver 4.06% interest[1.0 base + 3.06 bonus])which doesn't have any fees
2. Deposit 3k into it and deposit at least 100 a week from your pay via your CBA account
3. Join with a Superfund, personally i use Hostplus which has low fees and highly organised fund
4. Make co-contributions of AT LEAST 1,000 BEFORE June 30 and the government will contribute $500 depending on your incomeCatches…
- The nab account is only used online and any withdraw will not allow for the bonus interest rates you also have to make at least 2 deposits a month for the bonus interest
- i would keep the cba account as an emergency acccount or income from work account so there isn't any withdrawals from the interest saving account and just use the account to transfer the money into the interest account
- Info personally coming from a 19 y/o still studying accounting…this is what i see is the fastest and safest way to make money….Doing this overtime will contribute a lot towards the future and allow you to retire much earlier!
+1 on the NAB reward saver but I think its only 1 deposit a month required for the bonus.
NAB Reward Saver account – Bonus Interest4.2 Subject to clauses 4.3 and 6, NAB may also pay bonus interest calculated on the daily credit balance of your account as at the end of each day up to and including the day before the last banking day of each month and if applicable will credit the interest to your account the next banking day.
4.3 NAB may pay bonus interest on your account when you make at least 1 deposit to your account in the month and no withdrawals in the month. Any bonus interest paid is in addition to the base interest earned on your account.
2 Words
Ubank 4.62%pa
Ubank 4.62%pa wouldn't help him as he needs to deposit into the UBank Saver or Ubank Ultra Saver Account a minimum of $2k per month. Otherwise his interest rate reverts back to 4.26%. Based on his earnings of $250/week he'd only be able to deposit up to $1k per month.
not when you're a student. There are no fees and no minimum deposits. However you lose the bonus when you withdraw money
I must have missed that tidbit of info. Do you have the web link that shows this? Ta.
So if he doesn't deposit 2k, he only gets 4.62%?
That's not bad though..I'm assuming you mean 4.26%. In order to get the 4.62%, he'd need to deposit $2k per month.
In any case, he'd be better off opening up an ME Bank Online Savings Account and linking to an ME Bank Everyday Transaction Account. This way, he'll earn interest at 4.60%. The other good thing is that there's no bank fees, minimum balance & minimum deposit per month restrictions. Additionally, a differential of 0.02% is neither here nor there. The only downside is that he'd have to close this account again once the 5 months promotion has ended, otherwise his interest will drop from 4.60% to 2.90%. But hopefully by then there'd be better high interest saving accounts or other better investment options. See here https://www.mebank.com.au/personal/bank-accounts/online-savi… for the ME Bank promotion.
DO NOT put money into super. Your employer will automatically be putting in 9.25% of your gross income into an account anyway. Any large deposits are tax and the marginal fees will increase.
Put it in ubank or ING, let it sit and don't think about it.
Machej - plz tell me what you meant by learn coding, it is great for the future, thanks
A couple of options:-
1) Invest it conservatively in equities by setting up a Commsec account. Consumer staples or stable infrastructure shares. You do not have enough money to flip a lot of equities (the brokage will kill you) but dipping your toes in the water will teach you a lot. If you can put up with the heartache of the up and down, you will probably make more money than if you left it in…
2) Ubank. Good stable choice. I have all my money there as right now I never know when I might need it. Before then I had it in infrastructure shares. Wish I'd left it there most days.
3) Holiday. Use it as a lump sum and apply for a working holiday somewhere. It will be the best bloody year of your life trust me. Geez I wish I had done more of that now.
Put it in the highest interest account you can find, and travel as soon as you graduate. That's what I did. 7 years later, I haven't stopped :)
Travel is the only thing that makes you richer.
First home buyers savings account.
not a bad option. Effectively a 20% return on your money over three years with no risk.
don't be afraid to spend it if you can find things that are valuable to you.
the interest you get on 3k isnt really worth much, but it is a good idea to set up some accounts so that when you do have more money then u get interest on that.
3k —- put in UBANK Usaver and add money weekly. Then in June, there are usually sale fares to Europe so you can buy yourself a holiday.
Crack and hoes my son. Crack and hoes
I found a great deal on hoes! 54% off - Absolute bargain! OP could buy at least 10 hoes!
http://www.ebay.com.au/itm/PlantCraft-Cultivator-Tiller-Rota…
DUDE! don't save, go travelling. I've traveled extensively from when I was 18 till I was 25/26. Then i focused on a career and savings. The experiences from traveling are priceless. It opened my eyes to the world and gave me a better understanding of what I wanted from life.
My younger brother saved. His whole life. Now he wants to travel but he can't. He has a mortgage and two young kids.
Each to their own I guess, but the way I see it you only live once. Make the most of it!
This is true. Do things when you are younger, otherwise you will regret it when you're older and you can't.
Deposit the lot into Superannuation and get $500 off the government free!
Don't you only need to deposit $1000 to get the $500?
If so, stupid to put it all in at once.. Put in $1000 now and $1000 next FY to get 2x$500.
Or better still keep the money on the "off chance" you might need to use it in the next 45 years!
Super is awesome and putting money into Super is awesome, but only if you're a crappy saver which the OP clearly isn't!
OP, every Oz bargainer loves a few extra dollars in the bank but given your life stage think about the following:
Don't look at the first home buyer savings accounts unless you have a crystal ball and know how your life will pan out - property is often a joint purchase with your spouse, if you don't use it to buy a home it goes into your super.
While admirable to think about getting a solid start financially, $250pw is chump change compared what you'll be pulling in later on. The opportunity cost of those savings at your age outweigh IMHO the extra dollars. This is the time of your life to go out and have those experiences - they will come in handy for later in life and you won't have the chance when you're married / have kids + mortgage.
Think about the hours you're putting into your part time job, and what it is likely to lead to. If you're not on the path to getting the sort of experience that'll help you when you graduate, start thinking abt this ASAP.
In short - enjoy life and set yourself up skills wise now - that income stream later on will make reaching your financial goals easier than a couple of early extra dollars
Mmm
Firstly, I wouldn't not consider the First Home Savers Account. As some posters like mousie and paizuru have pointed out, you can get some good returns from this account, especially when 17% is tax free.
Also, don't discount the power of compounding. Having a high interest account, saving money and earning interest on your savings can go a long way, no matter how small the initial and subsequent deposits are. Here's a link to show you the power of compounding. http://www.investors.asn.au/education/investment-basics/powe… Compounding really shines in later years but it needs to have an early start.
Of course, I'm not saying that you shouldn't go enjoy yourself. But maybe have a plan where you allocate some money for splashing out as well as savings. It really all comes down to balance (or a budget).
However, I agree with Tempo in saying that skills are important as a significant portion of most people's financial lives are spent as employees/contractors/commission hunters/business owners etc. And a significant portion of most people's wealth is generated during this time period. Obviously, the better skills one has, the better the opportunities and prospects available.
Seriously, a kid asks you guys what he should do we the $3000 he worked hard over the years to save, and you guys are telling him to dump it in savings account and superannuation?? Steve, if you put your money in super and you'll end up wealthier but more miserable.
EVERY 20yo should go travelling, it's by FAR the best thing you can do with your money.
If you were to regret anything when you are older, you'll be regretting the things you DIDN"T do. So if you are not in financial straits or have no urgent need of the money, PLEASE don't put it in your super. Take the money and backpack SE Asia, what you will gain from the experience will be priceless. I've learned more from my travels than any other experience in life, just make sure you go into it with the right mindset. Use this time to think about what you want to do with your life, meet new friends, experience new cultures, and try to figure out what your life passion is.
DONT travel with tours
Go alone if you are independent
Get as much as you can from this experience and make it count (make your money's worth!)
Stay in Hostels and meet new people
If you don't mind travelling for extended period, you can do it cheaply by volunteering - I highly recommend www.childrens-shelter.com in Chiangmai (It's something like $200-300 per month incl food and accommodation)
You can fly to most SE Asian countries return during AirAsia sale for $400 return
Average daily expense for a budget traveller is approx. $15-30Start planning, and trust me it'll be the best life decision you'll make :)
Buy 2 Gold oz.. you will not regret for sure in future..
P.S only if you are thinking for any investment else as others suggest spend it for a good and memorable tour..
Put it all on black.
Then start up a new thread "6 grand savings - What's the best use of my money?"Save the money and by the time you finish uni you may have enough money for a down payment for a house. Financial freedom is the key.
You may find the following article by the renowned Financial Adviser Scott Pape interesting.
I saved my butt off from a young age and now i'm 27. got house; now positively geared. travel every year to a different country. work hard now and then enjoy your life later.
6 month or less term deposit.