How To Save Money From Salary

How To Save Money From Salary: 10 Tips To Save More

WHY SAVE MONEY?

Stuck in a never ending loop of worrying whether your wages will last until payday? Maybe you’re just looking for a few tips on how to save money from salary for that bit extra towards your goal.

The fact is, 59% of Americans admit they worry about money constantly.

Moreover, nearly 50% of people believe that financial struggles have prevented them from reaching life stages sooner.

With said important life stages being no less than getting married, becoming parents, or becoming a homeowner.

You can read more about H&R’s recent survey here.

This is such a sad reality and these should be reason enough alone for you to start taking steps to save money from your salary.

Whether you’re struggling paycheck to paycheck, or just looking to save money to set aside to invest. These tips can help anyone save money and lift the financial burden on so many peoples shoulders.

 

How To Save Money

 

There is, of course, 2 great ways of releasing the shackles of financial worries. However, in this guide I’m just going to be focusing on how to save money from salary.

If you’re looking for ways to increase your income, you can find some great ways to make money from your hobbies here!

MONEY SAVING QUESTIONS YOU SHOULDN’T BE ASKING

 

No Money

Before jumping into some money saving tips, let’s go over some of the things you shouldn’t be thinking.

Society these days too frequently has us comparing ourselves to others. Especially with social media platforms such as Facebook and Instagram, where all we see is the great moments in peoples lives.

It’s important to remember that we all lead different lives. We have different expenses and expenditures. We live to different means.

Each of us value things differently

Some people care about the biggest brands and latest fashion, while others just want to capture and cherish memories.

We shouldn’t be judging where we’re at in our lives based on where others are, or look like they are from what we see on social media.

Below are a few of the things that shouldn’t be going through our heads.

HOW MUCH MONEY SHOULD I HAVE AT 25?

This is a prime example and a question that gets bounced around a lot.

I have friends my age that have worked at Rolls-Royce since they were 16. I decided to leave my job to see more of the world at 22. It wouldn’t make sense to judge our success by comparing with each other.

Our lives simply take different paths and we make choices based on what we want, so we shouldn’t be comparing the outcomes with those who see things different and don’t share what we value.

IS $10000 ENOUGH SAVINGS

Are you saving for a nice summer getaway? Then, Yes.

Are you saving for a yacht? Then, I don’t think you’re quite there.

Questions like this just depend on too many variables. What are your expenses? Do you have a seperate emergency fund? What are you saving for? How expensive is your area?

Having any savings at all is enough to skate by, after all at least you’re not in the red.

IS SAVING $500 A MONTH GOOD?

Again it depends on what you earn and the means you’re living to. Saving $500 a month sounds like a dream to some people, to others it’s pocket change.

If that $500/month allows you not to worry about finances and lets you live the lifestyle you want, that can only be a good thing.

THE BUDGETING SPREADSHEET

To help you get a better idea of where you stand with your savings, I’ve thrown together a little spreadsheet that will allow you to calculate what you’re currently saving from your salary each month.

Simply enter your email below to download the spreadsheet. From here, you’ll be able to enter your monthly income and individual expenses in the corresponding boxes.

Finally, the spreadsheet will calculate what your monthly savings are based on your input.

If the number comes out red, you might want to stick around and find out what you can do to stretch your wages out a bit further.

Seeing your individual expenses listed in the spreadsheet might help highlight your problem areas.

You can then use the tips below on how to save money from salary to optimize your budget and have some money leftover at the end of the month.

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HOW CAN I SAVE MONEY ON LOW INCOME?

Here’s some of my favourite money saving tips to help you live frugally and strive to become more financially free.

 

Saving Money

 

1) Implement The 30 Day Rule

What is the 30 day rule?

We’re all guilty of impulse purchasing, especially online where you get hypnotized by the wizardry of smart marketing tactics.

I bet you can remember at least one time you were browsing around online and ended up buying something you didn’t need just because of the marketing used to sell you on it.

The 30 day rule aims to curb the impulse purchasing:

When you’re considering making an unplanned purchase, stop for a second and put that money into savings instead. Next, you should wait 30 days. If after those 30 days you still want to make that purchase, then that’s fine. If the impulse has gone, you’ve saved money, winner!

This sounds too simple but it’s effective because of the impulsive nature of the purchase. You soon realize how unimportant and the waste of money it really is, and just forget about it.

2) Start Budgeting

Knowing where your money is going every month is key to finding your problem areas.

If you know where you’re bleeding money you can assess why all that money is disappearing and start taking steps to save more of that money.

If you’re not budgeting properly you might be looking to the wrong areas to find a solution. Maybe you’re trying to shave a few more dollars from your already thin grocery budget, when you didn’t even know you had $70 worth of club memberships you’re not using!

If you haven’t already, I highly recommend downloading my free budgeting template. It’s free and it’ll highlight your problem areas while giving you a good idea of where you stand financially and helping you track expenses.

The key to saving money from your salary is knowing where the issue is!

If you’d like to download the free budgeting template, you can enter your email below and the download link will be sent to you instantly.

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3) Save Money From Salary First!

This is a trick that always worked for me personally.

When I decided I wanted to leave my job and see more of the world, I spent the next 2 years saving up whilst completing my apprenticeship. In order to save, I set up a standing order to move money into a separate account every payday.

Not once in those 2 years did I dip back into those funds. In fact, I didn’t even notice they’d gone since it was always sent as soon as I’d been paid!

Setting up a standing order with your bank is a great way to force yourself to save more money. You can read more about them here.

4) Get Out Of Debt

 

Debt

This is obviously easier said than done, and it’s not something that can be done overnight.

That being said, It’s so important that you make moves to clear you debts.

The simple fact is high interest rates on loans will kill your money saving potential.

Just keep chipping away one step at a time and sooner or later that financial burden will be taken away. You’ll be astonished just how much easier it is to save when you don’t have repayments to make.

If you’re in debt, this should be your priority.

5) Ask Your Employer To Withhold More Tax

This one feels pretty unnatural but if you’re looking for how to save money from salary, it’s maybe the easiest and most effective way.

I know, I know. Who wants to give any more money to the tax man?

We pay enough, I’m with you. Fear not though, this is just a method of forced savings.

It’s almost impossible to fail with this method. Your employer will be taking more money directly from your wages so you just won’t be able to spend it. Of course, you’ll get that money back as a tax refund.

Taking a little hit in your wages every month could snowball into a big lump sum of savings you get back at the end of the tax year!

6) Put Bonuses And Overtime Aside

This is fairly similar in practice to setting up a standing order to set aside savings from your salary.

The great thing about this though is that you’re putting aside unexpected earnings from bonuses and overtime. This is easier to do because you’d never budgeted for that income in the first place, so it should be surplus to your needs and easier to save!

Perhaps when starting out with this, instead of putting it all into savings, save most and use a small portion to treat yourself.

What this helps to do is keep you motivated to keep working the overtime and hitting the bonuses. Forcing it all into savings could be a bit demoralizing if you feel like you’re getting nothing for your efforts.

7) Allow Yourself An Entertainment Budget

 

entertainment

 

Following on from my last point, it’s important to make sure you’re allocated a bit of entertainment money.

In fact, not doing so could be detrimental to your saving efforts.

The problem is that it’s hard to stay motivated and stick to these challenges if it feels like there’s never any reward. It’s just not good for our mental health if we aren’t getting our brains stimulated – or something like that!

It’s important to remember it’s a challenge and that’s why we set goals. You should reward yourself for hitting those goals and keep you motivated to hit your next goals.

Just know your limits and don’t go overboard. Overspending on entertainment is probably young peoples biggest budgeting fail!

My last tip here is to be honest with yourself when budgeting! If you know you’re going to struggle with your entertainment budget, bump it up!

Make it as realistic as possible and you’ll then have the chance to make savings in other areas to offset the expenditure.

8) Find Cheaper Hobbies

This isn’t going to be an option for everybody, and that’s okay, you deserve to spend your entertainment budget however you want!

It’s something to consider though. An example would be to ditch the expensive coffee shop catch-up, in exchange you could grab a coffee to go and go for a walk somewhere.

That might sound criminal to some people. I will admit, I’m not a huge coffee drinker and I do love nature so maybe I’m a bit biased. However, when figuring out how to save more money, you’ve got to explore these avenues!

You get the idea though, just think about where you can make substitutions for cheaper alternatives. Another example would be swapping the cinema for a movie night at home.

Opportunities are endless here and could make huge savings on your entertainment bills.

9) Hang Out With Your Other Friends Who’re Trying To Save

This doesn’t mean to say you should avoid any of your other friends. I don’t recommend that. However, I’m sure you can imagine one of the biggest budget killers is persuasive friends!

I’m definitely guilty of this, it doesn’t take much for me to get my arm twisted and end up back at the pub.

You could end up spending $100’s doing things with friends that you didn’t plan for and knew you couldn’t afford, but it’s just too hard to say no.

Try to make plans in advance with you’re other friends who are trying to save. They’ll be more open to doing something free or cheap, maybe you cnan try something new together and it’ll be more enjoyable.

10) Practice Minimalism

This ones easy for me. I set off travelling with nothing but a 40L backpack that held all of my possessions. Of course I still have some stuff back home, but given that I haven’t visited in over a year now, I’m perfectly fine without it!

Try to ditch any materialistic habits you may have. Do you really need another watch or the newest pair of trainers?

I’m not a very materialistic person anyway, but I can see this being a tough habit to break.

Try packing your favourite clothes into a suitcase. When it gets full look at the items that are left. Is there anything you could sell or donate?

WRAPPING UP

I hope you’ve found these tips useful and learnt how to save money from salary more effectively!

I also hope you continue to make use of the free spreadsheet and use it to budget more strategically and save money for your next treat/venture.

Let me know in the comments below if you utilize any of the tips above, and if you have any more that you can share! I’m always open to fresh money saving ideas!

If you did find this helpful, please feel free to click the pin icon on the image below. It would help me out a bunch!

Thanks for reading

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