How to save 20% of your salary without having to live in a CAVE!

I know what you’re thinking. What on earth is this finance guy talking about, what’s saving 20% and living in a cave got to do with me?

Firstly, this is not a get rich scheme!

Then what is this guy talking about you might ask? What I’m talking about is being able to put away 20% of your income without having to reduce your lifestyle to the point where all you can afford is a cave to live in!

Seriously, save 20%? Ok we’re going to discuss your concerns first and then look at some powerful strategies anyone can implement to become that person who CAN save 20% without having to live in a cave!

Concern #1: That’s a Lot of Money!

Yes, 20% of anyone’s income is always going to be a lot of money to put away and to anyone in the middle of their career with a couple kids, this would seem near impossible.

Let me tell you, it’s not and we’ll discuss the how below!

Concern #2: How do I adjust to not having 20% of my income?

You’re probably thinking “how would I adjust to not having 20% of my income?” “If I gave up 20% tomorrow, I wouldn’t be able to pay all my bills”.

We’re not talking about doing this all in one hit. It’s more about small, incremental changes.

They say that implementing a new HABIT takes around 90 days.

Concern #3: “But how do I make sure I don’t dip into it and spend it?”

This is always going to be the hard one, the temptation when the going gets tough is to dip into the savings you have. Yes, it does involve a little discipline and structure.

Concern #4: “But that means I must forgo my current Lifestyle!”

No, we’re not suggesting you give up on the things that you enjoy, like coffee every morning, holidays or dinner with friends.

Concern #5: “But what about my mortgage?”

Yes, this is most probably the big one, but with a little discipline and a good habit you can still save! It’s all about balance.

However if you are trying to live like the Jones’s and don’t have the income to match, you may find yourself in a tough spot. Once again, it’s all about balance.


“So how do I become that person who CAN save 20% without having to live in a cave?”


#1 The first thing is wanting to have a better life for yourself, now we all want that, don’t we?

When I speak to pre-retiree clients and ask them what is the one thing you would have done earlier in life? They always say they wish they had started earlier or wish they knew this stuff 20 years ago.

Ask any financially successful person how they became successful and you’re likely to get some of the following responses….


“I implemented good habits”


“I followed a well laid out plan and actually did it”


“I paid myself first”


Ok, I know what you’re thinking, so when is this finance guy going to hand me the SILVER bullet?

Well, unfortunately there is no SILVER bullet. There are however strategies you can implement and no it won’t be for everyone and I’m ok with that.

#2 Ok, so go implement some GOOD MONEY HABITS!

If you can’t implement good money habits, you are going to be stuck in your current life for a long time and live to regret it later in life.

#3 You don’t know what you don’t know!

It’s highly unlikely you were taught how to save in school and it would only be if your parents taught you about saving that you might have the right habits now. Other than that, you’ve probably not had any real guidance therefore you don’t know what you don’t know.

They say it takes 90 days to successfully implement a new habit. Understand that and you are well on your way to implementing the right habits.

So, what do I do you might say?


#4 Don’t worry about creating a budget, they just don’t work. Just stop spending on stuff that you could do without!

What I suggest you do is look at where you spend your money and focus on the spending that does not create any value (apart from the necessary expenses like insurance, utilities and coffee).

Discretionary spending, you know all the stuff we purchase because we want it. Only spend on the things that you value, anything else, just cut it. You can still spend on the things you value the most. Now you don’t get many finance people telling you that, do you.  Once again it’s all about balance.

Grab a piece of paper, draw a line down the middle, on the left, write down what you can’t live without.  On the right, write down what you can live without for example: –


Love – can’t live without Like   – but don’t really need it or could do without
Coffee Foxtel
Expensive shoes App store junk
Exercise Gym membership
Gadgets Newspaper/Memberships you never use or can find for free on the internet


And then cut/cancel/stop everything on the right-hand side that you could live without.

#5 Impulse buying costs you MONEY!

Now I’m sure we can all relate to an impulse purchase we made and either regretted it later or never used what we purchased. The point is, if you don’t need it, don’t purchase it, you’re only going to regret it later.

Here’s a tip, try waiting 72hrs before you purchase it. If it’s not important you won’t purchase it and I guarantee you, you will save money. I can’t even count the amount of times I’ve waited 72hrs and then never gone through with the purchase.

Understand any new habit will take 90 days to implement. Understand this and you are well on your way.

#6 Can’t handle a 20% drop in income?

That’s ok, then take it a gradual pace. After all it’s a marathon not a sprint.

For some that might mean starting with saving 5% of their income, for others they may be able to handle 10%. Honestly the amount doesn’t matter, what matters, is that you start creating long term habits!

A fitness coach was talking to a client recently about setting some goals, the coach suggested that the client aim at being able to run comfortably 5 km three times a week. However, the client knew he wasn’t fit enough and said “this was too hard”.

“Can you run once a week”? asked the coach

“I think I can handle that!”

So the coach said, “well start with once per week, and when you’re comfortable with that, try twice a week the eventually move up to three times per week”.

The point here is to make small incremental changes until they become a habit and then you can look to make the next change.

#7 Automate!

This is most probably the most important part. If it’s automated, you don’t have to think about it, it automatically happens.

When I started work, I decided to salary sacrifice 5% of my salary into super and I have kept it going ever since. It was easy, as it was automated and to be honest I don’t miss that income because it has become a habit.

My point here, once it’s automated you forget about it and then it becomes a GOOD MONEY HABIT, that’s going to help you become financially independent.

Hope that’s been useful.

If you’d like to fast track the process, feel free to reach out and I’ll share some of what I’ve learnt.

Book your 15min phone chat by giving Glenn a call on 1300 558 713 or alternatively on 0401 253 729.

“There are only 168 hours in week. MAKE THEM COUNT!”



Written by Glenn Doherty CFP – Financial Organiser/SMSF Specialist

This information is of a general advice nature only, and has been prepared without taking into account your particular financial needs, circumstances or objectives. All information is based on Exelsuper Advice Pty Ltd’s understanding of current law as of 12th May 2017. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should seek professional advice before acting on the information contained in this publication. Taxation considerations are general and based on present taxation laws, rulings and their interpretation as at 12th May 2017. You should seek independent professional tax advice before making any decision based on this information. Exelsuper Advice Pty Ltd CAN 080 419 holds an Australian Financial Services License 428272.


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