The increase in consumerism has made it very difficult for anyone to save money. Most of us rely on our salaries on a paycheck to paycheck basis. For many of us saving money can be a very hard task especially in the current economy. However, at the same time, depending solely on your paycheck to help make ends meet is very difficult as well. So, the only option available to us salary people is to save money- no matter how impossible it sounds.
It brings us to the question: How to Save Money from Salary?
Well, there are quite a few ways you can do so.
Budgeting Is Key
The first step to do is to make a budget for savings. Budgeting comes up in every how to save money guides and there is a very important reason behind it. Budgeting can not only save money for you but it can also help you organize your money habits and make sure that you don’t overspend.
To do this, you need to record all your expenses. You should have a budget book where you write down all your spending. This means that you include the amount you spend on necessities like bills and other expenditures. You can tally all your recordings using your bank statements, credit card, and other receipts.
Keep Track of Your Expenses
By keeping a track of your expenses, you will be able to know where you spend your money. Plus, it’s a good way of making sure how much money you have left in the end. It helps you keep track of your money. The amount of money that you spend each month can vary. There is something known as variable spending which can be less or maybe more than the previous month. By keeping a budget book, you can keep a track of this too.
Once you have made a list of all your expenses, you will know what your variable and fixed spending are. You can then decide what you should be prioritizing and which aspect of it you must cut down. One of the ways to save money from your salary is to start cutting down your budget. As you become aware of your fixed spending and variable spending you can easily priorities.
Fixed spending such as bills and rents cannot be cut down upon. But variable spending can be reduced. You can decide from your variable spending what is important and then start cutting down spending on things you don’t think are necessary. This is crucial when you’re learning how to save money from salary.
For instance, it’s not important to buy an extra pack of chips or drink beer every day. You can spend less or stop buying unnecessary items altogether. It is not important to dine out every weekend, you can cut down on that expenditure as well.
After this, you can work on setting up a budget. This might sound restricting but it works in managing money. You can plan on how much you are willing to spend on what. You can include saving in this budget and can make it a goal. You should make saving the top priority in your budget list. Every month you can create a new goal to save this much amount of money.
It is not necessary that you start big and save up huge amounts of money right at the beginning. Instead, you can make small saving goals. For example, in the first month you can set up a goal of saving just a 50 dollar, and from there you can start increasing it each month. You can then pick on certain habits such as saving up the change you receive on a piggy bank.
From the expenditure of every month or week, you can plan on how much money you are going to spend and how much you will save. You can plan meals for the week, create shopping lists, and make sure you stick to that list. You can put a limit on your credit cards and on your spending. You should get strict with your savings goal.
No matter what happens, regardless of the things you need to buy, if you reach your spending limit you should stop. By putting a limit on your credit card, you can also stop yourself from spending things on unnecessary items.
Another way to manage your expenses and make sure you save is by using the ‘Cash Envelope System’. This method is also a way of controlling your spending and making sure that you save. It can help you stick to a weekly and even monthly budget.
You can put your money on separate envelopes for separate things. For example; a separate envelope for households and food. Whatever amount you want to allocate for food, house, bills, or something you can put it in the envelopes of each.
Through this, you will make sure that this amount you have set aside goes only to that purpose. This means that you will be able to put aside money for savings too. At the end of the month if you stick to the envelope you will see how much money you have saved.
Breaking Down Your Salary
Apart from these methods, there are many other ways of how to save money from salary. One of the most popular ways to do so is to break down your salary. The first step to this is to calculate the money you will get after deductions have been made from your paycheck.
These deductions include taxes, interest rates, insurances, and even loans that you take from the company. Getting your salary on a monthly basis is common. Monthly based salaries are something that happens to everyone. So, this means that you have a certain amount that you need to work with throughout the month. You can divide this monthly paycheck into maybe two.
This means that when you get your monthly salary instead of utilizing the whole of it immediately, you can break it down into two. You can use half of it in the first half of the month. This means that you can even make a saving goal from that amount.
Do Bulk Buying
The other thing to be careful about is your shopping habits. Where you shop is important. There is no need to go to expensive stores to buy things. Instead of bulk buying from different grocery stores, you can get all your stuff at a big supermarket at once. In bigger supermarkets, they have deals and discounts for grocery items.
Try buying your groceries from these supermarkets. Make sure you do utilize these deals and discounts. Sometimes, supermarkets and grocery stores even ask you to make a membership card. Through these cards, you can get further discounts and deals. Do make sure that you shop from places where there are discounts.
Shop in sales and this way you can save a huge chunk of money. It is also best to be wise about what you buy. Instead of buying expensive imported products, you can shift to local ones. For things like rice, wheat, and other grocery products you can buy huge packets that can last for months. This is another way to save up money, as it reduces your total expenditure at great lengths.
Savings Accounts Are Very Useful
You can also automate savings from your paycheck through your account. Open a savings account in your deposit account. As you are aware of your fixed and variable costs you can easily set money aside for savings. After setting up a savings account, you can set up a direct deposit.
Through the direct deposit, as you receive your salary, the money you want to save will directly go to the savings account every time you receive your salary. If your employer doesn’t deposit your salary directly into your personal account, you can set up an automatic savings transfer instead. In automatic savings transfer, you set up the amount you would like to be saved on a periodic basis.
Every time you deposit money into your account, the portion for savings goes to the savings account. Through these methods, you can save up a huge chunk of your salary. These ways can also lead to you creating an emergency savings fund. This fund can help you save on a long-term basis. This will surely make savings a habit.
In order to save more money from your salary, you can even start a side hustle. Make sure you have more money than you earn. Starting a side hustle is the fastest way to save money from your salary. You can start a small side hustle, such as may be supplying lunch in your office, or selling jewelry.
Through this, you will be able to earn some extra money which you can then save up. If your side hustle becomes successful you might be able to reach a point where you just tend to save more than half of your salary as you will have another source of income on your side.
There are many apps available that can help you get organized. Sometimes, you don’t know how to start and where to pick from on your own. You can download cashback apps and use sites such as Biota and Rakuten for extensive guidance regarding your saving plans.
These apps also help you earn money. For example, in Biota you earn money back when you upload receipts from shops you already shop at. This is a fast and easy way to save money. You can then put that money into a savings account or just save it in a savings box that you might have created.
Cutting Down Spending
It is easier to cut down variable spending but difficult to reduce your fixed ones. However, there is a way around that too. You can try to cut down your utility bills in order to make sure you have a lesser budget for bills. Electricity bills are the most convenient bills you can reduce.
They are normally in your own hands. You can start by using less electricity, such as closing extra lights, unplugging your electronic devices after using them, and making sure your extra sockets are closed. You can also change certain electronic devices by replacing them with ones that require less energy.
Fans, for example, use less energy than cooling systems. You can replace your air conditioners with fans instead. You can also use bulbs with less voltage and even use energy saver bulbs instead. This way your utility bill can be reduced, and you can save up more money.
The key to being successful with saving is to be careful. You need to be careful about the money you have and the money you spend. You can adapt to smaller habits like having a piggy bank or keeping away the change you receive from stores to at least get into the habit of savings. You need to control your shopping triggers so that you don’t go over the budget.
An easy way to do this is to carry less money every time you decide to go out, whether to a grocery or a mall. When you make a budget for your grocery make sure you carry that amount only. This way you will make sure that you don’t end up spending extra.
It is best to watch every penny that you have. This way you will know what you are doing with your money and it will also make you have control over it. Saving money from your salary is not a hard task. It is a habit that needs to be developed to be successful. If you follow all these measures that are given, you will be successful at saving money from your salary.
Advantages of Saving
Saving money has many advantages. It can help you become more independent. In case you lose your job, at least your savings can help you cover up your expenses. Also, it can help you have a better life after retirement.
When you save money, you can use it for later use when you retire and don’t have a source of income. It is also a good way of monitoring all your expenses in making sure that you don’t overspend. It helps break away bad spending habits, such as spending money on unnecessary things. Bottom line is, learning how to save money has many benefits which many overlook but you definitely shouldn’t!