'The 5 best money saving tips I follow to save 40 per cent of my income.'

I have a confession to make.

Whenever I read a money diary which involves someone who is living at home rent free, I roll my eyes and click to another article. Ditto for people who’ve bought a home with the help of mum and dad.

The eye roll is mainly due to the fact that for me and for many of you reading this right now, moving back in with your parents or relying on the bank of mum and dad after high school simply isn’t an option.

I want to see more role models who are kicking ass with money, who don’t live at home and who are attempting to pull together a mortgage on their own. I currently save 40 per cent of my income as a woman living in a major city with her partner and paying her way.

Watch: Budgeting with a banana. Post continues after video.

Here’s exactly how I save 40 per cent of everything I earn:

1. It takes time

When I started working full-time, my savings rate was 0 per cent. Part of this was moving across the country for work, with moving costs eating up my savings. The full-time salary I moved for was far less than the average graduate salary, which made it an uphill battle to save money when against the pressures of inner-city Melbourne rent and the whims of 20-year-old me. It took time to take my savings rate from 0 per cent to 40 per cent through small improvements made over time.

2. Get clear on your why

I really struggled with saving money because I didn’t think it was that important. The only financial goals presented to me were retirement or buying a property – and when you’re a 20 something on a low income, taking away money from your current wants for 70-year-old you or having faith that you can build a mortgage payment can be difficult.

What helped me start saving was to define my why: what was important to me and to be clear on what I was saving for. Whether it be short term purchase or to retire early, your individual goals will provide strong motivation to start saving.

3. I saved my promotion money

When you get a promotion, the first port of call is often to treat yourself. The problem is that many of us don’t stop treating ourselves and what was a luxury becomes the new normal.

My turning point was realising that most of what I had spent hours earning was leaking out of my bank account. If you get a promotion, treat your future self by saving at least some of that promotion money and putting it towards savings goals that are important to you.

Mia Freedman, Jessie Stephens and Holly Wainwright chat about the thing young women are spending crazy money on. Post continues after podcast. 

4. I made a budget that worked for me

Budgets have a bad reputation because experts make them really boring. I tried one app and broke up with it within a week because it made me type in every individual thing I bought. Boring and not for me.

Instead, I tried different budgeting methods, including journaling, cash envelopes and different apps until I found a budget option that worked for me. If you’re struggling to budget, here’s how you can get started with budgeting in 10 minutes.

5. Read financial information that doesn’t make you feel stupid

When I knew I needed to help to manage my money better, I did what most of us would do and picked up a finance book. But if anything, it made me feel really stupid, with language and content I couldn’t relate to. I put that book down and instead looked for online content that actually bothered to make money and finance relevant to me. There’s many options out there so find the voice and content that will make you want to take action to learn and get better with money.

If you’re keen to kick-start your savings, here’s a few hacks to get you started: 

• Rent – rent is normally a quarter to a third of your pay cheque. Get yourself a roommate you can tolerate living with and cut your rent costs and energy bills in half. 
• Food – start making weekend breakfast at home and inviting your friends or family round to your place. You’ll be surprised how much you can save over time, you get to see more of your favourite people and there’s no waitress waiting to move you on out as soon as you put down your fork. 
• Coffee – buy a reusable coffee cup, which will likely come with a café discount and the feel good factor of putting less waste into the world. 
• Couples – if you’re thinking of moving in together and combining your finances, divvy up the rent according to the percentage you can each afford to pay. This could end up being something like 40/60 rather than 50/50. Your partner will still be saving money compared to the cost of living on their own and it will help both halves of a couple to save money, despite different incomes.  
• Clothes – limit your clothes purchases each month and train yourself to only buy a few necessary and good-quality items. You’ll save money and becomes less obsessed over time with the fast fashion cycle.  
• Make money from your wardrobe – if limiting your clothes spending will be difficult, start going through your wardrobe and sell what you no longer wear so that you appreciate what you already have and put the money you make towards your savings.  

If you’re currently struggling to save, remember that it takes time and that small improvements add up over time. Just work out what percentage of your income you’re saving right now and action you could take now to increase that percentage so that 2020 you have more savings going towards your most important goals.

Your future self will thank you for it.

Kate Crowhurst is a financial literacy educator. With a background in specialist financial literacy research and education, she’s on a mission to deconstruct traditional finance education and make money bites sized. You can read more from her at Money Bites.