Savings rules of thumb

Savings rules of thumb

We muse a lot at Xinja HQ about the worrying state of Australian savings balances and retirement savings. We thought we’d share the most commonly used savings techniques, we’ve come across to help Australians get ahead. We recognise everyone is wired differently so we’re interested to hear what works for you too. Join the conversation here.

Nb: The below doesn’t represent any form of advice and Xinja has obviously not considered your individual circumstances in preparing this 🙂 It is simply a few thoughts from a number of sources on savings techniques to get the conversation started.

“Many Australians are just one surprise situation away from financial stress.” – Bessie Hassan, Money Expert at

Emergency funds are worryingly low

While there are plenty of Australians sitting pretty with their savings, there are still too many struggling to save anything at all. A worrying 58% of people fear they couldn’t afford a surprise expense such as a medical emergency, according to a survey of 2,031 Aussies. One in four cash-strapped Australians say they only have enough money stashed away to cope with an emergency costing them just $400 or less, Galaxy research reveals. Debt consolidation provider Fox Symes director, Deborah Southon, believes all adult Australians should have cash reserves without relying on credit in the case of a financial emergency.

[Australians] “…should have at least three months worth of salary set aside so they have some kind of base to go forward”

– Fox Symes director Deborah Southon

Australians are anxious about their finances

Moreover, the Australian Psychological Society reports finances as one of the major causes of stress. On top of this, the Financial Stress Survey by CoreData and Financial Mindfulness found close to 1 in 3 Australians suffer from significant financial stress, which has for the first time been comprehensively examined in new research by CoreData. The results show nearly one in three people (30.4%) are suffering from significant financial stress and they are struggling compared to those who are not financially-stressed. Women were more likely to be more financially-stressed than men (33.4% v 27.6%). Dr Nicola Gates, chief scientific advisor for Financial Mindfulness, said significant financial stress was “a lot more common than I had believed”.

“Financial stress is an issue that needs to be talked about in order to reduce stigma and shame, and to bring about intervention.”  

– Dr Nicola Gates, Chief scientific advisor, Financial Mindfulness

What’s holding Australians back?

Australians struggle to save for the following reasons:

  • Unexpected expenses arising, or a change in financial circumstances, 41%
  • Lack of willpower, 27%
  • Their goal was unachievable, 17%

The ‘lazy tax’ and ‘burying heads’ mentality are contributors

A common issue faced by busy professionals is actually knowing where their money goes and what their cost of living is. Many lead busy lives juggling work commitments, building careers, caring for children and, in many cases, parents.

“But those who find the time and develop a strategy for managing their income and spending plans are in a healthy financial position and have confidence for the future.”
– Anne Graham, AFR

Behavioural scientist Nathalie Spencer explains why we are often reluctant to change the way we handle our money.

“One reason could be that we just don’t think about our finances enough.  Sometimes it is psychologically easier to avoid learning information if there is a chance that it is bad news.”

– Behavioural scientist, Nathalie Spencer

At Xinja, we’re excited to support Australians in increasing their savings. Watch this space for when bank accounts launch (subject to regulatory approval). Until then we have curated some common savings methods below!


Common savings rules of thumb


50-30-20 rule

One of the most popular budgeting methods often talked about is the 50/30/20 budget as popularized by US Senator Elizabeth Warren in her book “All Your Worth: The Ultimate Lifetime Money Plan.” This budget stipulates that you should divide your after-tax income so that:

  • 50% is allocated towards your needs, such as fixed living expenses
  • 30% is allocated towards your wants – everything you spend money on that is non-essential
  • 20%  is allocated towards savings and investments

The Serviette Strategy from the Barefoot investor

Scott Pape of the Barefoot investor advises a different split to 50/30/20 in his ‘Serviette Strategy’. Pape stipulates the following allocations would be set up as automatic transfers:

  • 60% allocated to daily living expenses
  • Blow Bucket: 10% for growth, 10% for the occasional splurge and 20% to fight financial fires as safety money

Cut down your vices

Do you smoke? Drink? Have an addiction to coffee? Whatever your vice, make a conscious effort to cut back. Healthy and wealthy – a double benefit!
Source #3 of Canstar’s 101 Easy Ways To Save Money in 2019, is cutting back on vices

Make a public stance to your closest ones

ASIC’s Moneysmart shares some techniques used by confident savers:

  1. Set a specific savings target to work towards
  2. Have a clear savings plan
  3. Regularly review your progress
  4. Set a specific time frame to achieve your goal

Tell your family and friends about your goal – although we know being open about finances can be a taboo for some people, so an alternative may be writing your goal down and sticking it somewhere visible to you every day

“People who review, remind themselves and publicly commit to their savings goals are more likely to achieve them.”


Try a 5:2 cleanse

For two days a week, Women’s Health Magazine recommends practising the discipline of sticking to only two expenses – transport and food. There’s something smug – and savings-enhancing – about a zero-extra-spend day. If restraint doesn’t come easily (or at all), try loading your Xinja card every day/week with your budget and getting into the discipline of tracking your daily spend in the app as often as you check your Instagram 😉

Mindful spending

Rooted in the trend of mindfulness which means “focusing on one’s awareness in the present moment,” mindful spending is consciously thinking about your purchases, according to Mozo. Reflect on each purchase. First and foremost, identify the times you have impulse spent and ask yourself “why?” Perhaps you’re a little too tired and hungry while grocery shopping? Or sitting on the lounge bored while browsing online stores? Did this bring me joy or regret?

Create your own carrots

And one from the Xinja Nudge Unit, if reviewing your finances is still a daunting chore, set yourself other rewards as you make strides e.g. gift yourself the next Netflix show when you’ve spent 30 mins assessing and tweaking your budget. You’ll feel more motivated when you’ve unlocked a reward! And don’t forget to celebrate the small wins. Your future self will thank you.


What do you think? Have you got any other ways to save? What works for you? Join the conversation here. Tell us your thoughts and ideas at our forum

Sarah May is Marketing and Community Lead at Xinja.

The content above does not represent any form of advice and Xinja has obviously not considered your individual circumstances in preparing this. It is simply a few thoughts on savings techniques to get the conversation started.



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