Financial expert reveals how she saves 40 per cent of her income (2024)

A financial expert has revealed exactly what she does to save 40 per cent of her income - and the savings tricks you can adopt to get started.

Kate Crowhurst, 31, from Sydney, said she hasn't always been such an expert saver, and when she started working full-time in her twenties it was an 'uphill battle' to put away any money at all.

But now, seven years later, Kate is able to bank nearly half of her income as a finance educator.

She does this by following several simple tips, such as savingthe extra money she gets each time she is promoted and using the budget app,YNAB (You Need a Budget) which gives every dollar she earns a job.

Speaking to Mamamia, Kate said although you might think it's 'boring', a budget is key to financial success.

'I tried different budgeting methods, including journaling, cash envelopes and different apps until I found a budget option that worked for me,' she said.

Today, the 31-year-old uses apps such as the You Need A Budget (YNAB) app, which provides a map for all of your spending and breaks down your biggest expenses.

Kate saidif you're new to budgeting, you should aim to save at least 20 per cent of what you earn and put this towards your long-term goals.

'What I've found most effective is to budget based on how often you get paid because you're more likely to track your income after each pay day,' she wrote on her blog.

For many young workers, rent is the single biggest expense and one that makes it difficult to save any of your pay cheque.

Kate said it's worth thinking about this if you want to be able to save 40 per cent of your earnings.

'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,' she told Mamamia.

Alternatively, if you're in a couple and you live with your other half, then you should divide the rent according to the percentage 'you can each afford to pay'.

This might end up as a 40/60 split, rather than 50/50, as said she 'your partner will still be saving money compared to the cost of living on their own'.

When it comes to promotions, Kate said she always banks the extra coin rather than treating herself with the money.

She said it took her a while, but she has taught herself to believe that saving the money is a 'treat for my future self'.

She has also taken her food habits into hand, swapping pricey avocado-based brunches out for weekend breakfasts at home with friends.

'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,' she said.

Lastly, for those wanting to save more money, the 31-year-old recommends you limit unnecessary spends - like your clothes purchases - and train yourself to buy just a few 'good-quality items'.

'Iflimiting 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,' she said.

Kate recommends you try not to fret too much about how much you are saving, but rather work out how much more you think you could put away next month and decipher any extra cutbacks you could make.