There is a common belief that profligate younger generations waste their money on cafe breakfasts instead of saving it. We’d rather eat avocado toast than own our own home, or so the story goes.

While there’s little truth to this piece of intergenerational fiction – statistics show housing affordability has sharply declined since the 1980s – one financial expert says you don’t have to give up your flat whites to start a savings plan, even if you’re on a low income.

Kate Campbell runs personal finance hub How To Money. “A lot of the advice out there is you’ve got to cut out the lattes,” says Campbell. “But that can be quite disheartening to read because if you are on a low income, they can be the thing that brightens your day. If you can’t spend much money, buying a coffee can be your treat.”

Campbell shares four tips to start saving money when you’re not earning a lot.

Set a goal
The first step in any savings plan, no matter how much you earn, is to establish a clear goal to work towards. That might be to clear a debt, save $1000 for an emergency fund, or put aside money to pay for weekends away.

A visual tool like a savings chart that breaks your goal into $50 blocks can help you keep your eyes on the prize. Telling a friend can also help keep you accountable and serve as a source of support. “If you are on a limited income, you might have to say no to a few things,” says Campbell, who recommends being upfront with friends and family about your plans to save. “Tell them, ‘Hey, this goal is really important to me, and I want to get there in the next 12 months. Can you support me when I say I want to go for a walk instead of brunch, or I want to make pizzas at home instead of going out and spending $100?’”

Do a self-audit
A savings plan requires a clear picture of your finances. “It’s really hard to know what you can save each month if you don’t know what’s coming in and out,” says Campbell. “How do you know if you can save $50 a fortnight if you don’t know what your income and expenses are?”

A mobile banking app can help you keep track of your financial position, while an audit – where you sit down and tally up your income and expenditure – gives you the information you need to work out how much you can save each month. Ask yourself, “‘What have I spent? What have I earnt? What’s realistic to save each month?’” suggests Campbell. “‘If I want to increase that saving amount to $100, is there anything I can adjust to save a bit of extra money?’”

An audit will show if you need to increase your income to meet your savings goal. This can form the basis of a 12-to-24-month financial plan where you might explore new earning opportunities, such as increasing work hours, negotiating a higher salary, switching industries or starting a side hustle.

Automate your savings plan
Once you’ve set a goal and made a plan about how you’re going to get there, Campbell recommends setting up a regular automated payment into your savings account. That way, she says, “you don’t have to think about it. It’s not left to last – you’re putting your goal first.”

Cut costs
You might discover in your audit that your living expenses are too high. Some of the greatest savings you can make to your budget can be found in reducing the big expenses in your life, says Campbell. “Instead of trying to cut out every coffee, can you call some of your bill providers?” she asks.

Try and renegotiate things like your electricity and gas (and mortgage, if you have one) and set a six-monthly reminder in your calendar to look for better deals from your bank and utility providers. “Focusing on those big costs of housing, bills and food can cut hundreds or thousands of dollars out of your expenses each year,” says Campbell. “If you can reduce that, you don’t have to worry about spending $5 on a coffee.”

This article is produced by Broadsheet in partnership with Bankwest. See Bankwest’s online money management guides for more ideas to get the most out of your money. The information in this article is of a general and educational nature only. You should consider your own financial position and requirements before making a financial decision.