How to save a $2k cash cushion

Tough times can’t always be predicted, so it’s a good idea to set some money aside that could help soften the blow. 

So how much should you save? Well, that all depends on your goals – but our past research— shows that having at least $1,000 saved up can make a huge difference to your financial wellbeing. However, the 2018 ANZ Financial Wellbeing survey found that approximately 23% of New Zealanders have no savings.

The good news? There are some simple ways to build your savings, no matter where you’re at right now.

Let’s say your goal is to save $2,000. Start by doing a rough spending and saving plan, so you can see where your money is going. You can use our ‘plan your spend’ tool to help you do this.

Getting to $2k isn’t going to happen overnight, but you can start saving with these simple tips.

Out of sight, out of mind. Once you’ve got an idea of how much you can realistically afford to save each month, set it aside the day your pay lands in your account – like it was never there. Setting up an automatic transfer could be a good idea.

Payday tomorrow? Check your spending account to see if there’s anything left over. The little bits add up – so consider popping the extra straight into your savings. You won’t just be adding to the balance, but you’ll be increasing the amount of interest you earn, too. Double win.

Do this consistently before every payday and you might be surprised at how the small stuff adds up.

Ditching your favourite coffee brand might be a step too far. But for day-to-day grocery purchases, consider switching to a home brand or budget option. Then, pop the difference straight into your savings. What might seem like a ‘downgrade’ in the short term could be an upgrade to your savings in the long term.

Saving can be surprisingly addictive once you’re into the rhythm – and it’s a lot easier to enjoy yourself when you know you’ve got a cash cushion to land on. But while saving is obviously important, you need a life, too.

So here’s what we suggest. Once you’ve got your saving habits humming – whether by using one of our tips or another way that works for you – then use any leftover money to spoil yourself from time to time. You’ve earned it.

To make the most of your hard-earned savings, look for accounts with no monthly account or transaction fees. Every little bit helps – so check out accounts with the best interest rates or those that reward for regular deposits and no withdrawals. 

When it comes to saving, it’s different strokes for different folks. $2,000 might seem like a huge sum, but don’t let that put you off – any amount you can build could really make a difference to your financial wellbeing. It’s all about finding your rhythm. 

Once you make saving a habit, you’ll be moving towards your savings goal without even thinking about it. If you need a little inspiration finding your savings groove, try these tools and resources for setting a savings goal.