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Making more of your pay

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We’d all love a pay rise yet many of us don’t make the most of what we’re getting paid now. Here are three simple steps that can help you take full advantage of whatever you earn and lay the foundation for a secure financial future.

  1. Understand the power of now
  2. Pay yourself first
  3. How to spend less

1. Understand the power of now

The first step to making the most of your pay is to understand the power of now. You need to see why it’s so important that you start your financial future Today. Consider Ray's case.

Case Study – Compound interest

When Ray was 25, he decided to invest $1,000 a year, every year, until he retired at 65^. After 40 years, of investing $1,000 a year, how much money do you think he had?

Ray at 25 Ray at 65



Find out how much Ray saved
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2. Pay yourself first

Who deserves to benefit most from your pay? Your landlord? Your mobile phone company? Or you? It’s you, of course. Yet, most people pay everyone else first and get only whatever is left over. You need to reverse this order. The first person you need to pay is you!

How much should you pay yourself?

A good rule of thumb is to put aside 20% of your income for your future, and live off the remaining 80%. You might even get your employer to pay this money into a separate account for you, so you don’t miss it. It makes a lot of difference as Greg found out.

Case Study – Pay yourself first

At age 30, Greg decided he needed to think about his future. So he started “paying himself first”. He committed to saving 20% of his after-tax salary of $35,000. In his first year, he saved $7,000. How much will he have by the time he retires? Let’s find out.

Salary (after tax) $35,000
Savings commitment 20% of after tax pay
Savings in year one $7,000
Savings by age 65


How much will Greg save by age 65?


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3. How to spend less

Perhaps you think you couldn't live on 80% of your take-home pay? Here are five money saving tips that could help you spend less today so that you have much more money to spend in your future.


Money Saving Tip #1 Give up cigarettes

If you won’t quit smoking for health reasons, take a look at how much it’s costing you. Giving up cigarettes is definitely good for your wealth.

Savings per month $320
Savings by age 65 $260,314

Money Saving Tip #2 Take your own lunch

Buying your lunch every day is convenient but costly. Bringing a sandwich, salad, or left-over pasta will save you a bundle.

Savings per month $200
Savings by 65 $162,696

Money Saving Tip #3 Buy smarter

Be smarter when you buy. To save on clothes, only buy at sales. Buying second hand on eBay is great for picking up bargains on furniture, computers and electrical goods. With a little discipline, you can easily save $100/mth.

Savings per month $100
Savings by age 65 $81,348

Money Saving Tip #4 Get smart with credit cards

Credit cards are an expensive way to finance your lifestyle. The rates can be twice as high as the average mortgage. So you really must pay off your credit card in full every month. If you can’t do that yet, make it a priority to clear your credit card debt as soon as possible.

Savings per month $35
Savings by age 65 $28,472

Money Saving Tip #5 Cut your mobile use

Mobile phones are great and can be a lifesaver but think before you make that call or send that SMS. If you’re spending $50/mth, try to get it down to $30/mth.

Savings per month $20
Savings by age 65 $16,270

Total savings

If you carry through on all these savings commitments, how much better off would you be in retirement? Let's find out.

Savings per month $675
Savings by age 65


Find out how much you could save
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Where to now?

You’re now in a better place to make more of your pay. Where do you want to go now?

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