Some financial advice would have you quit your barista-made coffee in order to save money.
But how do you actually make your coffee habit work to your advantage? Save money while you’re at it.
You’ve heard of apps like Raiz (formerly Acorns) or ING or Bank Australia that ‘round up’ leftover change from small purchases and put them either into your savings account or an investment.
But this loose change could be put to even better use in a savings fund that’s steadily building over the course of your working life: your superannuation fund.
Related story: 17 tiny changes that will save you more than $16,000 a year
FairVine, a super fund designed specifically for Australian women, has created a roundup-style feature that tucks small amounts of money away into your super.
While most people dismiss super as something to worry about later, the sooner you pay attention to it the bigger difference it will make to your savings down the track, FairVine head of customer experience Rachel Hamlen said.
“When it comes to saving money into your super, every little bit helps. Even the loose change you get back from everyday purchases,” she told Yahoo Finance.
Putting the money in your super fund could mean more bang for your buck, too: where the interest rate on a savings might only be 2 or 2.5 per cent at the most, super funds will typically deliver returns at 8 to 9 per cent on average every year.
Over decades, that loose change can make a huge difference.
How much would I save using roundups with my super?
If you started at 30 years old, contributing $5 a day to your super would mean you’d have an extra $104,976 at retirement, according to FairVine’s analysis.
“You also get a tax deduction for these contributions,” added Hamlen. And if you reinvested that deduction, you’d be rewarded for it.
“Using the same example as above, on an $80,000 salary, you would get a $630 back each year.
“If you reinvested that refund back into your super, the impact on your retirement savings goes from $104,796 to $140,391!”
“It's a unique, set-and-forget system that ensures you're continuously making contributions to your super without having to think about it,” said Hamlen.
The RoundUps feature is a free feature that comes with being a FairVine superannuation member.
While FairVine is designed with the Australian woman in mind, as her career is often interrupted by caregiver duties, the super fund is open to all people.
FairVine’s additional features – such as cashback when shopping with some major brands, zero fees on parental leave, zero fees for balances under $5,000, and no fees for splitting balances during separation – work just as well for men.
In particular, FairVine works particularly well for those with non-traditional work patterns such as those performing stay-at-home duties, those working in the gig economy or self-employed, FairVine’s head of communications Jenneth Orantia told Yahoo Finance.
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