How To Save Money From Salary: 8 Ways That Work.
Is there a secret towards understanding how to save money after you get paid your salary at work? The answer is no. It does not require magic. Rather, what is needed is an understanding of hacks that make it easier to save more of what you earn every month.
Well, saving money from your salary should start with that very first salary. The popular belief is that a good-paying job translates into the financial ability to plan for things like a new car, investing in a startup, or even a vacation to a dream destination.
Sadly, all of these depend mostly on how much of your monthly income you are able to save and how disciplined you are towards sticking to your monthly budget.
In this article, we will share with you how you can save money from a low-income salary on a monthly basis.
How To Save Money From Salary Every Month
Keep Track of Your Expenses
One of the reasons we fail at saving is because we fail to track our spending. Tracking your spending will allow you to know how your salary is being used.
Before giving up on saving money from your salary, review your spending for the last few months. Often, we find that there are areas that we can cut in order to prioritize saving.
However, you have to keep it realistic. Have it at the back of your mind that you cannot save 100 percent of your salary.
Budget Before Each Salary
There’s no better time to list out what your saving goals are for the month than the beginning of the month. That is, what you intend to do with your salary is just as important as the salary itself.
Also, ask yourself realistic questions. What are you saving for? Is it achievable? These would serve as a source of motivation.
Set up Direct Deposit To Save Automatically
Saving money shouldn’t be a chore. In fact, you can set up automatic transfers and withdrawals from your personal account to your saving or investment accounts.
Speak with your payroll administrator about having two bank accounts for your direct deposits. You may be able to allow a certain percentage of your salary into savings second bank account making your ability to save money from your salary even easier.
Reduce Your Utility Usage
Reducing Your Utility Usage might help you reduce utility costs. Use appliances that are plugged into their outlets, even if they aren’t being used frequently. Unplugging your cell phone and other electronic chargers when not in use could reduce your electricity bill.
As the weather warms up for summer or cools down for the winter, it’s common to have fluctuations in our utility bills. Before turning on the air conditioner try minimizing the amount of sun entering your home.
Or perhaps turning on a fan instead of lowering the thermostat might give you the same effect.
Place Savings Before Spending
A common mistake people make is to save what is left after your spendings. No! That won’t work. If you truly want to see the account balance of your savings account go up on a monthly basis, you have to save first and then spend what is left. If you insist on spending and then saving what is remaining, the chances of having anything left are quite slim.
Eat More Homemade Meals
Eating homemade meals helps you save more money. Eating out is one of those things that consume our salary. With some level of proper planning and discipline, you save you more money.
You can start by buying cheap foodstuffs at home. If you have a refrigerator, you can buy in large quantities and freeze them.
Consider Buying Used Items
You would be surprised at how much you are able to save when you buy used items instead of new ones. There are several places to get these especially online.
We are talking about used items like furniture, electronics, fashion items and accessories, and even cars. If you’re buying a used car, ensure you get a mechanic to inspect the vehicle before you pay for it. The same goes for electronics and other items that can be tested.
Find A Side hustle
Not a lot of people would say no to an opportunity to make extra money. Multiple sources of income help you plan better as this translates into income and as you might have known, more money to save.
For instance, you could become a freelancer and earn extra cash or you could help a local magazine develop content.
How Much Should You Save Each Month?
Personal finance is personal but here is a general rule of thumb for the amount to save from your salary, 50% for living expenses, 30% for lifestyle expenses, and 20% for savings.
The problem with the general rule of thumb is that it doesn’t take into consideration personal goals. The key factor to your financial goals is setting up a savings plan that works for you.
You don’t have to use 50% of income on living expenses. In fact, I would advise that it should be closer to 40% but again, this varies, especially if you are in a high cost of living area.
Conclusion on How To Save Money From Salary
Saving 20% of your money from your salary is a good goal but doesn’t have to be the end goal. In order to successfully save money, you don’t have to deprive yourself.
Prioritize your saving and eliminate things that don’t really matter. Have fun and get creative with finding ways to spend less.
The math behind saving money is simple but not always easy but that being said, it’s totally possible for you to save successfully.