How to save money with a smaller income

Mother and child review income on laptop.
Photo by Helena Lopes on Unsplash.

Countless studies and research have suggested that women are more careful with money than men. The latest of these from Kiwi bank ASB finds that women in NZ are more likely to have a savings account and typically hold around 600 NZ dollars more in savings than men.

Yet, if this is the case, why are women often worse off financially at retirement? In the financial year 2017/2018, the mean superannuation balance for a woman in Australia aged between 55 and 64 was $245,100, compared with $332,700 for a man of the same age group. That’s according to statistics from the Association of Superannuation Funds Australia.

The issue is perhaps the total amount coming in the door, as opposed to the amount saved.

Who is better at saving: men or women?

Research from the US, the UK and Australia suggests that women are more careful with money than men and as a result, perhaps better at saving on a daily basis.* The problem is, there is still a gender pay gap. The latest statistics from the Australian federal government show that the gap was 13.4% in November 2020.

On top of this, women tend to do more unpaid work than men. In May 2021, 62% of women in Australia spent five or more hours on unpaid, indoor housework, compared to just 35% of men.

This is important because, while it’s great to be good with money, if you earn less, it’s tougher to save. So the big question is, how can women and lower income earners save money for a rainy day?

Drawing up a budget and reviewing all household expenses is one way to save money on a smaller salary. While it’s good to watch your spending, saving on things like energy bills and home insurance, for example, can make a big difference.

Here are some of Mozo’s top tips to build up an emergency savings fund:

  • Banish debt. If you have credit card debt, the first thing to do is work on clearing it. You could start by cancelling your current card and transferring the outstanding balance to a 0% balance transfer credit card. You can use the 0% interest rate offer to pay off your debt, just make sure you can pay off the full amount before the offer expires. 
  • Don’t forget insurance. For many, insurance is one of their biggest yearly payments to budget for. If you have an inkling that your car insurance is a bit on the pricey side, it might be a good idea to see what else is out there. Head to Mozo’s compare comprehensive car insurance page to start gathering quotes.
  • Review internet plans. A recent Mozo survey found that 61% of Australians have never switched internet providers! The same research found that Australians could save as much as $1,017 by doing just that.
  • Wise up on energy. Besides employing good energy saving practices, another way to save on your power bill is by seeing what other plans are out there. Check out Mozo’s compare energy plans page to see what other providers operate in your area and what they’re charging.
  • Avoid comfort spending. It’s easy to say, but not so easy to do, especially when you’re stuck at home during a lockdown! According to Mozo’s 2021 Comfort Spending Report, one in three Australians have increased comfort spending during the pandemic. Check out the report for tips on how to avoid comfort spending, these include unsubscribing from tempting marketing emails.

Finally, you’ll want a savings account that is up to the task of looking after your stash. Savings accounts aren’t just a way to earn interest these days either, they often also come with nifty features to prod you into staying motivated on your savings journey. These include the ability to set up automatic transfers, make savings goals, roundup tools and even the option to have multiple savings buckets for different saving needs.

Head to Mozo’s compare high interest savings accounts page to read about what’s on offer right now, or check out the deals below.

Compare savings accounts - last updated 18 September 2021

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Boost Saver with Go Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.50% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Intro bonus rate of 1.50% for first 3 months, reverting to 1.20% after. Deposit $2,000 each month and make 5 eligible payments from your Go Account. If you are between 18 and 25 deposit $1,000.

    Enjoy a savings account bundled with a spending account. No monthly fees. New customers can earn up to 5000 bonus Virgin Money points on purchases (conditions apply). Benefit together with a joint account

    Details
  • Mozo Expert Choice Badge
    Bonus Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.

    Winner of a Mozo Experts Choice Award 2021 in the Regular Saver category. No monthly account fees and no minimum balance requirements.

    Details
  • Online Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $500,000)
    0.35% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    No account keeping fees. No minimum balance required. Unlimited phone and internet transactions.

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  • Serious Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.30% p.a. (for $0 to $1,000,000)
    0.15% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate for first 3 months, reverting to 0.15% rate after

    $0 monthly account fee. Link to any Australian bank account.

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  • Fast Track Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.05% p.a. (for $1 to $250,000)
    0.05% p.a.(for $1 and over)
    Yes up to $250,000

    Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

    Earn 1.05% p.a. Bonus Interest in the following month on your Fast Track Saver Account balance. Earn Bonus Interest on your savings, with no minimum balance required.

    Details
  • Grow Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.65% p.a. (for $0 and over)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Make at least 1 deposit and no more than 1 withdrawal, including internal transfers or external payments.

    Earn a maximum interest rate of 0.65% per year. Pay no monthly fees. Set up in-app savings goals. Benefit with joint account options.

    Details
  • Savings Maximiser
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $100,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    For customers who have an Orange Everyday and in each month deposit at least $1,000 into a personal ING account, make at least 5 settled card purchases using the linked ING debit card and grow the account balance.

    No ING fees. Great variable rate every month when you grow your balance each month in addition to other eligibility criteria.

    Details
  • High Interest Savings Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $250,001)
    0.25% p.a.(for $0 to $250,001)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Kick start your savings with the 4 month introductory variable rate. No fees, no minimum balance, no minimum monthly deposit and no minimum term.

    Details

*Vanguard’s 2020 report, How America Saves found that women in the US generally save at slightly higher rates than men. To add to this, PaymentSense UK statistics from 2017 show that 71% of women are more likely to look for a bargain when shopping, than men.

The 2020 ASX Australian Investor Study found that women often have smaller investment portfolios than men. The same report shows that men are more likely to invest than women altogether. In 2020 around 58% of investors in Australia were men. On top of this statistics from scamwatch.gov.au (correct as of 2 July 2021) show that so far in 2021, men have lost more money to scams than women (58.2% compared to 40.7%)

^See information about the Mozo Experts Choice Savings Account Awards

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