How I saved $22,000 in a year earning less than the average Aussie

If you had told me just two years ago that by the end of 2018 I would be debt-free (aside from HECS), or that I would go on to save $22,000 in a year, I would say that you had the wrong person.

Until mid-2017, I had been in denial about my financial situation. I paid no attention to my spending and was putting myself further into debt. Then I turned everything around and paid off all my debt in just one year. This year, I turned my focus to my savings.

Let me start by telling you that it doesn't matter how much you earn, it's about how much you spend. According to the ABS, the average wage is $1634.80 a week before tax. I earn about $1201 a week before tax from my full-time job.

The difference is that I have learnt a few things that have helped me to save approximately 38% of my net income.

I took a deeper look at my budget

Having a budget doesn't turn you into a savings guru. Sticking to the budget is the hard part, as is planning ahead for future expenses.

It's not enough to put money aside for this month's bills, I also plan 6-12 months ahead so that I can split the cost of bigger expenses over several months. Starting to save early means that you don't have to pay for large bills in one hit.

It's also important to take note of your expenses and see where you can cut back. Over time I have cut out my gym membership, personal training, beauty regimes and subscriptions.

I have cut back on personal care, travel, shopping and general spending. If you can't completely give something up, think of ways to save some money on it instead.

I learnt the difference between a want and a need

A big part of what got me into debt was that I 'needed' new things. I never told myself no when I wanted clothes or to go on holidays.

Over the past two years, I've learnt that what we need and what we want is vastly different.

'Needs' are the things that are essential for you to be able to live and work, like your rent/mortgage and food. 'Wants' help you enjoy life.

A lot of us seem to be spending money on things that we don't need, and this can really add up. Cutting back on these sorts of purchases helped me save a lot of money.

I took on side gigs to increase my income

Many of us have a full-time job and no other income streams. I knew that if I wanted to aggressively save money I needed to increase my income. I started freelance writing at night and on weekends, taking on a casual job, participating in paid surveys and focus groups, dog-sitting, recycling cans and selling items I didn't need.

I also saved at least 90% of my yearly bonus and my tax refund. Extra money should be looked at as an opportunity to save more, not spend more. This year my side gigs have brought in an additional $11,300, which has mostly towards my savings.

I focused on my goal

Having a goal in mind is key; it helps to have something to work towards instead of saving for no reason.

Other things that can help keep you motivated include: having a support person, social media communities, monthly challenges, colouring-in trackers, a vision board, rewards or a blog/social media account.

My current savings goal is $80,000 to buy or build a tiny house on wheels to live in, instead of a traditional mortgage. I want to be able to continue to live debt-free for as long as I possibly can.

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