I’m always harping on about savings. Put money in your savings, don’t forget about your savings, transfer this many dollars to your savings. But what should your savings structure actually look like?

Ultimately, the way you structure your savings is totally up to you. That said, I do think working with a minimum of two savings accounts is optimum. Multiple accounts allow you to separate your savings and align them with what you want from life. If you’re not quite sure how you want to stash your cash, here are 4 non-boring ways to set up your savings for success.

Before we get to the accounts, I should probably first explain that these four savings structures are designed to sit alongside at least one transaction account, and a bills account for all your direct debits to come out of. Once you’ve got your day-to-day money and your bills covered, you can use these savings structures to sail your way to financial confidence.

The base account: emergency fund 

In the pursuit of financial confidence, the greatest tool at your disposal is the emergency fund. Savings for life’s crappy bits, like car repairs, a water leak, or, ahem, a global pandemic, perhaps? Setting up an emergency fund is one of the more boring parts of saving money because, well, it doesn’t carry the same image of a margarita being guzzled poolside. But, it’s essential none-the-less. 

In addition to your emergency fund, bolt on extra accounts like these, for premium savings performance. 

1. Long term and short term

A great beginner way to set up your savings is to separate your long term and short term savings. Depending on where you’re at in your life, short term savings will generally be for things like splurges, holidays, homewares, etc. Your long term savings might be for property, starting a family, starting a business, or buying a car. 

Splitting the two helps avoid the temptation to deprive your future self of opportunities in favour of a new iPad or an extra week in Bali. 

2. Goal accounts

Another option is to set up multiple accounts that align with your goals. It’s a little more admin to begin with, but it can really help to see your goal written out each time you chuck a few bucks its way. Those goals could be anything, whether it’s to travel to a new country each month, start a business, take up a sport, buy a designer bag, or own your own home. 

3. Life stage accounts

Ever think about your future self and wonder what the heck you’ll be up to in ten years time? Setting up accounts with future life stages in mind can help relieve some of that unknown. Plus, the earlier you start saving for future you, the less effort it takes.

You might want to start saving for a family from a young age, saving for a property long before you want to buy one, or even saving for a trip you know you’ll want to do for a big birthday or family trip. 

4. Little by little accounts

These accounts are extra fun, because you get to watch the money add up with barely any effort at all. Little by little accounts are savings structures where you contribute tiny amounts regularly, whether that be by rounding up your transactions, sweeping extra money from your spending account, or doing a savings challenge.

In 2019, I saved $500 in a few weeks, seemingly with my eyes shut, just by transferring $1 per 1,000 steps I walked each day into a savings account. I’ve also saved several hundred dollars this year already, just using my bank’s round up feature.

The money in accounts like this is great for little luxuries or extra splurges, because it’s money that feels like it’s taken no effort to earn.


4 ways to structure your savings for success