What we did with a $27,000 pay rise

From June to July this year, my husband and I were both very fortunate to receive a pay rise: an increase of $14,000 for my income, and an increase of $13,000 for his. Our last combined pay rise had been $6000 in 2019 (a story I share in the first edition of my book), so we were stoked to have more than quadrupled this number with a combined pay rise of $27,000!

So what did we do with it? Here are the four things we did with our extra income.

Sponsored a child

I’ve always wanted to sponsor a child. Prior to quitting my banking job, I managed to sponsor a child briefly before giving up my main source of income at the time for the sake of my mental health. With my $14,000 pay rise, I was delighted to be in the position to sponsor a child again! I signed back up to World Vision’s child sponsorship program and am now the sponsor of a 9 year old girl in India, helping to provide clean water, nutrition, education, healthcare and hope to her and her community for $50 per month.

Started studying

I graduated with my Bachelor’s degree almost a decade ago, and had been wanting to study again to learn something new, upskill, and gain another qualification that might help me further my career. I signed up to study a national certificate through Open Polytechnic, an institute that offers online and distance learning. While I have always needed to pay for my studies with a student loan, this time I simplified the process by paying cash for my first course, which was $500. The next course is $600 and the course after that $800, which I will also pay cash for - skipping over all the paperwork otherwise required in the process. It is refreshing being able to skip all the admin and not have to rely on Studylink to help pay for my studies! Bonus: completing my certificate online means that I’ve been able to study during evenings and weekends, so that it doesn’t disrupt my work at all.

Increased our savings

Although we managed to save 40% of our income while we were saving for our wedding and honeymoon, since getting married, we’d returned to our default saving strategy of 20% per the 50/30/20 rule. After we got our pay rise, we created a new savings account called ‘10%’.

Now, every fortnight when we get paid, we send 20% to our savings as usual - then send an extra 10% to this account. We do our best not to touch it, using it only if an important, unexpected or urgent expense comes up, and at the end of the fortnight, we send whatever is left to our savings.

This has worked incredibly well, and means that we are now saving 25% to 30% on average while always saving at least the minimum, fixed amount of 20%!

We’ve also increased our savings slightly with another new account…

Started a baby fund

Yep! We recently made the big decision to start a family in 2022/23, and have started a baby fund!

We are starting small, with $100 per fortnight going to our new savings account (named ‘Baby’, featuring a cheerful baby smiling adorably). Over the next year we’ll create a new budget, accounting for things like new baby expenses, specialist appointments, maternity clothing, prenatal supplements, and living on a reduced income. While we definitely have a lot to learn, we’re feeling very hopeful and excited for what’s to come.

If you’ve also received a pay rise recently, I hope this has given you some ideas on how to spend it meaningfully. Of course, if you haven’t quite figured that out, you can always do what my husband did with his $3000 pay rise in 2019: hide the pay rise from yourself! Simply calculate the actual dollar amount difference between your previous net (after tax) income and your current net income. Then, set up an automatic payment to send that exact dollar amount from your chequing account to your savings account every pay day. You’ll avoid the slippery slope of lifestyle inflation, while boosting your savings rate!

I hope this has been helpful. If you have any thoughts, please feel free to comment below, or contact me on Instagram at @mindfulwithmoneynz.

Sophia

5 ways to learn about money - for free

Financial literacy is important. And who doesn’t love free money resources? Today I’d like to share with you where I go to learn about money and all things personal finance - without paying a cent.

Eventbrite

You’ll find plenty of free money events on Eventbrite. Simply sign up for free, and in your ‘Interests’, go to the ‘Business’ section and select ‘ Finance’.

You’ll be recommended local workshops and seminars about property, savings, investments, and much more - with a mix of paid and free events!

Sorted

Sorted is made by the New Zealand and is dedicated to helping New Zealanders sort out their money. You can create your own dashboard to track your money goals, plus make use of the handy calculators - including mortgage, debt, Kiwisaver, investing, and more.

Podcasts

A fun and easy way to learn about money for free is through podcasts. You can learn about money and improve your financial literary while driving, working out, grocery shopping - practically anything! Some personal finance podcasts I would recommend are She’s On The Money, My Millennial Money, and the New Zealand podcast, It’s No Secret.

Library

It’s free to sign up to your local library, plus free to request them to buy the books you want to read. Some of my favourite personal finance books are The Richest Man in Babylon, Smashed Avocado, Money Diaries, You are a Badass at Making Money, and of course, Mindful with Money.

Social media

Follow banks and finance companies on social media, so you’ll know when they host workshops, webinars, and more. Westpac hosts free Managing Your Money workshops on topics like budgeting, saving, buying your first home, insurance, and more. I also love YouTube personal finance channels, like The Financial Diet, Aja Dang, and Sorelle Amore Finance.

Good luck!

Sophia

How COVID-19 impacted our personal finances

Hello friends,

I hope you are doing okay during these crazy times! Personally, I have been doing my best to stay sane and practise self-care while at home by doing more of the things I love: reading, writing, and taking online classes that excite me. (If you’re not from New Zealand, our country is currently in a 4 week lockdown, so everyone is staying at home, in our ‘bubbles’ – except for grocery shopping, essential services and enjoying local scenery).

Today, I want to share with you my thoughts & experiences on how COVID-19 has affected money and personal finances. I imagine that life looks very different for most of us at the moment, including how we handle our money and what our incomes & expenses look like. I hope this helps you if you’re looking for ideas – and the knowledge that you’re not alone.

How our incomes have been impacted

My partner’s income
My partner is definitely very lucky. Long before the level 4 lockdown, when the COVID-19 alert level was still at level 2, his workplace had already asked all their staff to work from home. To help make it easier? His company is giving every staff member $400 to set up working from home, then $40 a month towards our internet bill!

This generosity can probably be attributed to the fact that he works for the largest insurance provider across Australasia (proudly also my former workplace), and continues to operate as an essential business. We are very grateful.

My income
I don’t get any fancy perks, but I also feel lucky. Our workplace has all office staff working from home, and apart from a few, we now get to work 4 days / 32 hours a week (from 5 days / 40 hours a week), with pro-rata pay – 80% of our normal work hours for 80% of our normal pay. We do have the option of topping up the other day / 8 hours with our annual leave, which I’ve personally chosen not to do. Earning 80% of what I do now is something I had already anticipated and budgeted for when I was job-hunting for a 4-days-a-week job, and I am thrilled to have more flexibility!

My rental income
I haven’t changed how much I am charging – mostly because it is low to begin with. Likewise, I continue to pay the same mortgage repayments as I did before, so property-related income & expenses haven’t changed for me at all.

With our income now 100% of my partner’s income + 80% of my salary income + 100% of my rental income, our total net income has actually reduced by 8.6%. A reduction, but a manageable reduction – especially with a new budget. More on that later.

How our expenses have been affected

Food
Now that we have more time to cook, we’ve re-subscribed to Hello Fresh! We’re really enjoying our weekly boxes filled with inspiring recipes. Our standard 3 recipe box costs $95 a week, but additional recipes cost us $19.90 ($9.95 per person) – a great optional extra, like this week’s special recipes for Easter lamb & chocolate brownies! Overall, this new expense costs us $190 – 270 per fortnight. 

PS. This also means we rarely have to go to the supermarket, so lessens our exposure to others at a time when this is important!

Utilities
Unsurprisingly, fuel & public transport costs are now $0 while our power bill has increased. Since January 2020, our fortnightly power bill for 3 adults has been an average of $64.30. For the fortnight just been, it was $76.10. Considering my partner and I were actually away for 5 of those 14 days (while stuck in Queenstown), it’s worth noting that our power bill has already increased by 18%!

Our internet bill has reduced thanks to my partner’s work subsidy – so instead of $85 a month or $42.50 a fortnight, it’s now $45 a month or $22.50 a fortnight.

Purchases
We bought some new essentials for our home! We’re both very excited for our new 27″ curved gaming monitor – bought for WFH purposes (but also means I can use Chromecast in the bedroom while my partner plays games on the TV in the lounge – hooray). This cost $528 retail price, which I got a modest staff discount on. I also invested in plush new goose feather & down pillows and a queen-sized goose feather & down duvet. (I imagine sleeping with it will feel like being hugged by giant, fluffy marshmallows.)

I also spent $155 on an annual Masterclass subscription by getting the ‘buy one, get one’ offer for $310. Luckily, I asked on Instagram if anyone wanted the other membership, and a friend offered to buy it within a day!

How to manage your money / my personal tips

Right now, I feel like uncertainty around money is perfectly normal – and because of that, peace of mind should be our number one priority. If you feel the same, here’s what I am personally doing to future-proof my finances and give myself one less thing to worry about.

Prioritising liquid savings 
I normally send 20% of my pay to a bonus savings account, which is the type of account that earns you the most interest (base + bonus credit interest) and incentivises you to keep saving by penalising you if you make more than one withdrawal. At the moment, I’m sending my savings to an on-call savings account instead, and my partner is doing the same.

What’s the difference? An on-call savings account still earns you interest, but you won’t be penalised if you make withdrawals. A lot of on-call savings accounts are exclusively online accounts too – with fees for transactions at the bank – and since none of us are going out anyway, they’re perfect to use during this time.

Why prioritise liquid savings? Because right now, your savings locked away in a term deposit or any other long term investment isn’t going to benefit you if an unexpected expense comes up – or if you find yourself a little short for rent this month. Using an on-call savings account means you can still earn interest, but access your money at any time should you really need it!

Some on-call savings accounts: Kiwibank | BNZ | ASB | TSB | Heartland Saver

Kiwisaver
This crisis has hit our Kiwisavers hard, with everyone’s balances reducing by hundreds or thousands of dollars. But because Kiwisaver is just like any other investment, these ups and downs are natural and inevitable. It’s worth riding it out and not switching funds, because the minute you do, you are accepting and locking in your losses, rather than giving them time to bounce back.

Personally, I’m not worried about my balance – it has gone drastically up and down and in fact, is back to what it was before the crisis today! This is just me, though – I have put mine on 50% Balanced, 50% Growth so will weather more ups and downs.

If you are extremely worried about your Kiwisaver, or plan to withdraw your savings within the next 2 years – say for your first home – you can change your Kiwisaver fund to a low-risk Conservative fund – or a Defensive fund if you want to be really safe.

You can also free up more funds by reducing your Kiwisaver contribution rate – the amount that comes out of your gross salary. If you are on a high contribution rate, like 10%, dropping this down to 3% or 4% will of course have a much bigger impact than if you are currently on a 6% contribution rate. You can have a play around here to see what you’d be getting paid if you do change your rates. If it’s worth the hassle, definitely consider this option to give yourself more room to breathe during this time!

Refreshing our budget
Now that our income & expenses look so different, it’s time for a fresh new COVID-19 budget. I wrote a new fortnightly budget for my partner and I, using our new reduced income and updated expenses. Groceries? Down. Hello Fresh? Up. Transport? Down. Power? Up. You get the idea. It’s reassuring knowing that we can still save 20% of our income while paying our bills on time, and while I don’t want to make assumptions, I think it may be fair to say that most New Zealanders can, too – whether they’re at home or in Australia. We are so blessed.

I personally feel that refreshing our budget has given us peace of mind for our finances during this crisis, which is more helpful for alleviating anxiety than anything. So if you haven’t, you might also find it reassuring and encouraging, too.

Other options to consider

Cancel any subscriptions & services you aren’t using. Check your bank statement – are there payments coming out for things you aren’t getting any value out of? (We did this to our budget, but definitely want to keep Netflix and Spotify Premium for now!)

Reduce your insurance premiums by increasing your excesses, if you are spending most of your time at home (eg. if you’re not an essential worker). This will be different for everyone. I know that my car isn’t going anywhere in the next month and that even if it does, the risk of an accident is significantly reduced, meaning that it’s unlikely I would need to claim and pay a high excess. If you have enough of an emergency fund to pay an excess should you really have to, it may be worth making the most of lower premiums for the time being!

Pay later. I’m not one to encourage people to use services like Afterpay and Laybuy, because it’s easy to use them impulsively. But I feel that if you are financially struggling at this time and needing to buy essentials, now would be the best time to take advantage of them so you can keep more for your liquid savings.

I hope you’ve found this helpful! Here are some more resources you might be interested in:

COVID-19 financial support 

Free & confidential budgeting advice

Looking after your mental health & well-being

Love,

Sophia

How I save money on an inconsistent income

Just a few years ago, I'd rely on $1400 to hit my bank account every fortnight - and it did, each and every fortnight without fail. Even then, my income regularly fluctuated because I volunteered for so much overtime and, twice a year, received a performance bonus - but it was positively inconsistent in that I could always rely on at least that amount or more. It was blissfully easy to budget.

Fast forward to 2019, and I'm sure those of you who are freelancers, self-employed, contractors, or run a side business can relate to earning a wildly inconsistent income. It started in 2018, when I had six sources of income, one of them being a part-time job that would give me 21 hours one week, 4 hours the next; another being photography, where one month I'd shoot two events and others where I'd shoot none.

Here's a snapshot of my income now:

• I've taken a hiatus from photography;

• I still handmake and sell scented soy candles, though I don't advertise - so 99% of my candles are made for friends who ask for them personally and not via my Etsy shop;

• I'm working full-time and work the same number of hours every week, but being on wages rather than a salary means my pay occasionally increases or decreases in cases of sick leave, annual leave, or public holidays;

• I still have a casual/part-time job on the side;

• My only source of consistent income - hallelujah! - is my rental income, which is, thankfully, always the same.

I also get paid:

• Weekly from my day job;

• Weekly from one source of rental income,

• Fortnightly from the other;

• Fortnightly from my part-time job

• Every once in a while if a friend requests candles (I'm actually making candles for two friends' weddings at the moment - exciting stuff!)

So how on earth do I budget and save money when my income is never the same? For example, it's not realistic to set a goal of saving $200 every week if during the course of a month, you earn $1000, then $400, then $300, then $800.

But, for the past couple of months, I've successfully saved a considerable amount for building my nest egg, paying off debts, and investing in my future self through a few simple habits!

Pay yourself first

This is a personal finance rule I've heard countless times when it comes to building wealth, but now I get why it's so important. If your income is not consistent, it means you have to be. What it means for me personally is that I never have to worry that I'm not going to be able to save this particular week or fortnight because I've taken care of that worry straight away by paying myself first. Now when I get paid, it's the very first thing I do before anything else - even if I have bills to pay, new clothes to buy, a new book I really want - I always put money into savings & financial goals first. It's amazing the effect it has on my peace of mind.

"But what if I pay myself first then don't have enough to pay for everything else?"

1. 80/20'ing your finances really helps, and ensures that never happens. More on that later, or you can check out my blog post How to Live on 80% of Your Income.

2. There is always something you can do about your bill payments if, in a worst-case-scenario situation, you can't pay them on time. For example, companies can often offer extensions and waive late payment fees if you ask. It makes a difference if you are honest and let them know beforehand, because more often than not there are options available - I can say that having worked in customer service in insurance, banking and tax! (On that note.. Even our national tax department offers grace periods and instalment arrangement plans on debts; if they can, everyone else can too. So don't worry!)

Loosen up on your budget - save 20% instead

(Or: instead of using a dollar amount, use a percentage)

I used to write a budget for every week or fortnight, and it'd only work out half the time. Why? Because my income was inconsistent, so along with not having had the discipline of paying myself first, I often simply couldn't stick to my savings goal. But recently, I've adopted a new, life-changing habit. Instead of treating my budget like an absolute, I simply save 20% of whatever I earn.

It is so effortless. If I receive $600, I put $120 into savings. If I receive $1000, I put $200 into savings. If I receive $542, I put $54.20 into savings and $54.20 towards my credit card because it requires minimal effort to work out 10% off the top of your head. Now that I always save 20% of whatever income I earn, I always have peace of mind! Even if I overspend on brunch that weekend or treat myself to too many new books, I know that my savings has already been taken care of. It's that simple.

Always being able to save at least 20% is made possible by having first 80/20'ed my income. It's based on the 50/30/20 budgeting rule, where 50% of your income should go to needs, or fixed expenses; 30% of your income to wants, or flexible expenses; and 20% to savings and financial goals.

Note: The 80/20 rule is a famous rule that also applies to your lifestyle choices and time management! I consider it one of the best things I've ever done for my finances. :)

Underestimate your income, overestimate your expenses

The habit of consistently saving 20% has changed my life, but I still write an approximate weekly budget that I stick to more successfully than ever. It's coupled with another consistent habit: rounding down all of my expected income, and rounding up all of my expected expenses. For example:

Income
$602.61
$558.00
$202.00

Expenses
$54.00
$63.00
$76.00

becomes

Income
$600.00
$550.00
$200.00

Expenses
$60.00
$70.00
$80.00

I know this may be obvious and self-explanatory, but it makes a difference and has very often resulted in a surplus, not a deficit. And who doesn't want extra leftover money?

I hope you've found today's blog helpful and found some inspiration if you're in the same boat! Learning how to save with an inconsistent income has given me more peace of mind around my financial well-being - I hope it does the same for you too.

How I saved $232 a month while looking for a job

Hi friends,

Today I wanted to share with you how I reduced my monthly expenses, and talk about whether I’ve noticed much difference in my life. I’d like to thank a brief period of unemployment that motivated me to make these positive changes, some of which were only temporary – if it weren’t for my need to reduce expenses, I might’ve never truly evaluated where my money was going, and what was important to me.

Here’s exactly what I cut back on..

Spotify Premium | This was the first to go, as it’s obviously a want and not a need. By cancelling my subscription, I saved $14.99 NZD a month. Not a bad start.

Have I noticed much? No. I still use Spotify, but less. Since I noticed that I always listened to the same artists & albums, I support them instead by listening, ad-free, to their CD’s. It’s a win-win in many ways. Having a tangible piece of work made with love, sweat, inspiration and creativity, is priceless. I love the original artwork, the lyric booklets, the quirky sentimental photographs, the artists’ personal thank-you’s – all of it feels so much more authentic than a digital music library. Plus, buying a new CD for $20-25 every couple of months only when I’ve actually found something I love definitely beats paying $15 every single month.

LinkedIn Premium (Career) | I was subscribed to this service because I enjoyed using LinkedIn Learning – the courses are well structured with helpful tutors and chapter quizzes to build your knowledge. You can find anything, from photography, to graphic design, to human resources, to leadership, to writing.. The possibilities are endless! Though I loved it, unsubscribing saved me $40.24 NZD a month. 

Have I noticed much? No. Shortly after unsubscribing, I added to my Youtube subscriptions of channels for lifestyle, organisation, productivity, minimalism, zero waste and personal finance. I also signed up to a two month free trial of Skillshare, another online learning platform full of exciting courses – plus earned extra months by signing friends up to a free trial! I’m divided – both LinkedIn Learning and Skillshare are great, so I’ll do an update further down the track as to my choice of online course self-learning.

Mobile Phone Data | After my mortgage & car, my phone is one of the priciest expenses. Looking at where I could save, I realised I had a ton of carryover data – about 30GB – which is enough to last me months! Reducing my data from 7GB to 2.5GB saved me $30 NZD a month.

Have I noticed much? Not at all – especially with my change of job and change of habits. I spend less time on my phone and when I do, I usually have WiFi.

Office 365 | I’d used only Word and Excel all my life in school & work, so when it came to wanting to type things up at home, they were my first choice – but I didn’t think of looking around for better, more affordable or even free services. I was so determined to use Office to be more productive, but I just never used it as much as I thought I would – so unsubscribing saved me $10 NZD a month.

Have I noticed much? No. After unsubscribing, I searched for something like ‘best free writing apps”. I ended up loving the brilliant WPS Office, which comes with Writer, Spreadsheets & Presentation, and have used it ever since. It does absolutely everything I need it to, like formatting text & pictures and converting to PDF. (And just for putting up with only one ad every time it opens – that’s all!)

Gym Membership | I’ve always been part of Les Mills because the atmosphere is bright, energetic and colourful, with brilliant classes and motivating instructors. Luckily, they have an option for you to suspend your membership for up to 90 days per membership year, at no cost. I took the opportunity to temporarily suspend my membership and fortnightly payment of $49, saving me a whopping $98 NZD a month.

Have I noticed much? With this one I did! I miss the runner’s high after a long treadmill workout, and feeling strong, refreshed and energised after a BODYPUMP sweat session. Unfortunately I’m not motivated to run at all in the drab winter weather. So while I’ve balanced out my lack of gym exercise with Blogilates, free yoga sessions (offered by Lululemon and Golden Yogi every Sunday morning!) and eating healthy foods, I’m delighted to go back soon.

Mortgage | When I first took out my home loan, I was overjoyed that I could change my regular payments online with just a few clicks. Rounding up my fortnightly mortgage payments and increasing them by only $19.49 saved me 2 years & 7 months, hence I went ahead and did it. So when I really needed to stick to a budget, I reversed the change – saving $38.98 NZD a month.

Since earning a stable income again, I increased it by $79.49 a fortnight – $158.98 a month – saving me 8 years and 3 months. Hooray!

So how much did I manage to save?

The things I managed to save on indefinitely: $95.24 a month.

Including the things I saved on temporarily (gym, mortgage): $232.22 a month.

The experience of reducing my monthly expenses wasn’t frustrating. In fact, it was enlightening and eye-opening. Much like decluttering my physical belongings, I felt lighter. Not only do I have less bills and less to remember, my life feels, once again, more intentional, devoting my time and money to bigger & better things.

Love,

Sophia

How to live on 80% of your income

When it comes to budgeting your money, it can be confusing to know where to start. How much should you be spending - and what should you be spending on? How much is 'normal' to spend on everything in your life, from your rent or mortgage, your car, entertainment and eating out?

If you have no idea where to start, or would just like to refresh your money mindset and give your budget a makeover, here's a super simple budgeting rule: the 50/30/20 rule.

If you have a 50/30/20 budget, that means that:

50% of your net income goes towards needs;

30% of your net income goes towards wants; and

20% of your net income goes towards your financial goals, like paying off debt or buffing up your savings.

Let's say that I bring home $1500 every fortnight. Ideally, my budget would look like this:

$750 (50%) for my needs;

$450 (30%) for my wants; and

$300 (20%) for my financial goals

So what does this mean? Because 50% goes towards needs and 30% goes towards wants, that means that 80% of your budget is allocated, leaving you with 20% to grow in your personal finance goals. Of course, if you can increase that 20% to 30%, 40% or more, even better! In an ideal world, right?

What it means for you is that you need to learn to live on 80% of your income. Here's how I did it, and you can too!

1. Know your net income.

A super easy first step! Your net income is not your salary, or gross income - like how you would normally say that someone's income is "$60k". It's what you take home. You don't need to calculate this; simply check your bank account for your weekly, fortnightly or monthly pay.

2. Work out 80% of your net income.

Sticking with the example of $1500 per fortnight, 80% of this means that ideally, you'd keep all your needs and wants within $1200 per fortnight. Or:

For $1400, $1120.

For $1200, $960.

For $1000, $800.

You get the idea.

If your needs & wants are under 80%, congrats! You do not need this blog. However, if your needs & wants are over 80%, my next step should help you out..

3. Reduce & simplify your needs & wants.

So your needs & wants are over 80% of your income. Let's see where your money is going and where we can reduce and simplify.

a) Write down what your needs & wants are. For me, my list looks like this:

NEEDS

Mortgage

Insurances

Power

Water

Internet

Phone

Fuel

Food

WANTS

Clothes

Books

Journals

Events

Food out

Subscriptions

b) Here is the time to question everything. Be ruthless with each expense! Ask yourself: "What can I do without, or get for less?"

Mortgage - can I refinance at a lower interest rate?

Rent - can I move somewhere with cheaper rent?

Insurances - can I switch to a policy with lower premiums (or increase excess)?

Power/Water/Internet - can I switch to a cheaper company?

Food - how can I eat nutritious food for less, or get more meals out of my food?

Clothes - how can I buy less clothes, or quality clothes that last longer?

Books - how can I spend less on books, or less often - perhaps by using my local library?

Gym - how can I work out and be healthy inexpensively, ie. switching gyms, going for walks in nature?

4. Do your research and save!

Now that you know where your money is going, it's easy to make change happen. Spend 30 minutes researching all your options, but remember: don't just look at the price, but the value you are getting. For example, another insurance company may provide a lower premium, but are you still just as protected and covered?

Here are all the things I have personally saved on:

My mortgage, by researching each bank's interest rates

My insurances, by comparing policies, premiums and excesses

My phone, by reducing my monthly data

Food - by making my food last longer (essentially halving my food portions)

Clothes - by buying new clothes less often, but at a much higher quality

Books - by going to the library and borrowing new books I want, instead of buying them straight away

Food out - by eating out less, and eating less meat when I do. Vegetarian & vegan options are just as delicious!

Subscriptions - by cancelling my LinkedIn Premium, Youtube Premium, and Skillshare, and sharing Spotify Premium with my partner

Gym - by selling my $49/fortnight gym membership and getting a $28/fortnight gym membership!

Once you shop around, you'll realise there are so many options out there; so many possibilities and ways to reduce your expenses. Simply repeat until your wants & needs are within that target of 80% of your income.

5. Work out your financial goals.

Success! You're now able to live on 80% of your income, and have freed up 20% for your financial goals. What are you going to do with all that money?!

Here are some ideas:

Pay off your debt. Challenge yourself to pay as much as you can above your minimum monthly payment.

Build your emergency fund - at least 3 months of your salary.

Buff up your savings.

Donate to a charity, organisation or political party you are passionate about.

Save for a big purchase, like a new car, laptop or holiday instead of borrowing from a credit card or personal loan.

Save towards your 10% or 20% house deposit!

So there you go - how to live on 80% of your income. I hope this has been helpful and informative and inspired you to refresh your budget.

Good luck!

Sophia