Rounding-Up Riches

by Kirsty Lamont, Mozo.com.au

Australians can easily save thousands of dollars by "rounding up" their purchases to the nearest dollar, and saving the excess money.

The Rounding Up method allows even hardened spenders to effortlessly save money. It's ideal for commuters who often make several small purchases a day and end up with a handful of loose change.

We tried Rounding Up for a week.  Monday's breakfast of a tuna sandwich and a skim latte totalled $10.50.  This got rounded up to $11.00, with $10.50 going to the friendly barista and 50c going into the savings jar.

Another 80c from a $4.20 train ticket also went in the jar.  Plus 5c from a $1.95 bottle of water.  And finally the 70c change from a $3.30 orange juice brought the day's total to $2.05.

A week later, with heavier spending on the weekend, there was $30.60 worth of coins in the jar.  This might not sound like a lot, but over a year it will add up to $1621.80. That’s more than enough for an annual holiday, or a big Christmas shopping spree!

Once Rounding Up becomes second nature, you can put the money into a high interest savings account, and really see your savings skyrocket.  You won’t even miss 50 cents here and there, and in ten years time you'll have around $22,000 - enough for a new car.

For really hardcore savers, you can round up to the five dollar mark or even ten dollars, though you may feel like you're burning through your cash!  However if we managed that level of commitment with our experiment, the weekly savings would have been $106.60 or $5,543.20 a year for a $5 round-up, and a spectacular $206.60 or $10,743.20.  In ten years time in a good savings account, that's over $75,000 or $150,000 respectively.

It's also a great time to get saving at the moment as banks are actively competing for savers with higher interest rates on offer.  Even with home loan rates getting cut, savings rates have stayed quite competitive.

You can also use comparison sites like Mozo to pick the best savings account for you, or even compare different term deposits from all the banks.  With interest rates starting to see a bit more volatility, it's a good idea to lock in a favourable rate now.

So make a new financial resolution, and watch that spare change quickly grow into a savings stash!


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