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Figuring out how to save money from your salary can feel impossible. You save money when you have extra right? And your paycheck just disappears so quickly!
And, if you are on a tight budget or a low income, extra is just not something you have, making it extremely difficult to put away money for your savings.
But, saving is important for your future. and your financial goals. And, believe it or not, putting money aside can actually help you start to make more money. And with more money, then you don’t have the issue of a saving money being difficult!
Because, if you save enough money, you can start a business or a money-making side-hustle. Or you can save enough for a down payment on a house and stop wasting money on rent.
The point is, saving money from your salary, even on a lower salary is a necessity for your financial health and your future. And, even when you are on a limited budget, you can still find ways to save money from your paycheck.
9 ways to save money from Your Salary
Have you asked yourself the question “Why can’t I save money?” Well, you are not alone!
You may find putting money into a savings account each month to be challenging. But there are some tactics that can help you to save money from your salary.
Try these 9 best tactics for saving money from your paycheck.
1. Review Your Budget
The first step in finding ways to save money is to take a hard look at your current, albeit tight, budget. And if you don’t have a monthly budget sheet you need one like the one below!
You may simply have too much allocated for certain parts of your budget. Ahem, entertainment! Look at your bank accounts and see where the money is going.
While going out to eat or having drinks is fun, it might be robbing your future from you. And it could be preventing you from saving money for unexpected expenses like you need to.
Just say no now, long enough to increase your savings in order to make more. And, someday, maybe you can go out to eat as much as you want.
In any case, review each line of your budget and see if there is a place where you can find extra funds to push to your savings account. Read this guide for tips on exactly how much you should save each month.
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2. Track every penny you spend
One possible issue with not finding ways to save money is that what you are spending is getting away from you.
You might drop $4 on a latte without thinking, or spend extra at the grocery store without even realizing it. If you are struggling to save money, this could be a factor.
It is easy to ignore small expenses, to spend and forget and then at the end of the month you wonder where the heck all your money went!
If you are on a tight budget, with not a lot of income you need to be extra vigilant. Track every penny of the money that you spend. It can help you find ways to save more, even on a small budget.
It will not only help you understand where you could find money to save, but could also help you spend less in general.
Before you buy anything, ask yourself if you really need it.
Chances are you don’t, and if you track everything, and spend less pennies every day, at the end of the month that adds up to dollars.
Dollars you can save.
3. Make lifestyle changes to save more money
If you want to know how to save money from your salary, one easy way is to change your lifestyle in order to free up more funds.
You might be living in a two bedroom apartment but you only use one. Yes, it’s nice to have a whole second closet that’s the size of a bedroom.
But you won’t get ahead if you aren’t using every asset you have. So rent out the second bedroom, even if just for a few months.
You can pocket several hundred extra dollars for your savings account.
If your car payment each month is a lot, consider selling the car and buying something less expensive. Cutting your living expenses can help you a lot in the long run.
You can make lifestyle changes to free up money from your paycheck for savings. You can cut your cell phone bill down to only $20 a month with Consumer Cellular.
If you are really strict and limit spending money, you can save as much as $5,000 in 6 months!
4. Find ways to make extra money
If finding a way to save money each month seems impossible, then try a different tactic. Like finding ways to make additional income!
It is certainly much easier to save money when you have more of it on hand. It might even be fun to find a new way to make extra income. Plus, it is a personal finance secret weapon.
There are a ton of ways to make extra income. Take an extra part-time job, turn your favorite hobby into a side hustle, or start an online business. There is no limit to the options to make extra cash to meet your savings goals.
If your budget is too tight to save, try increasing your budget by bringing in more income! Then you won’t have to limit spending money quite as much.
More Reading: The 60-30-10 Rule of Budgeting
5. Automate Your Savings
This is actually one of the best ways to make sure you save money out of your salary. Just get the act of saving money from your monthly paycheck set to occur automatically.
You can set up a direct deposit of a portion of your paycheck into a separate savings account from where the rest of your paycheck goes. (Just make sure you are using a high yield savings accounts like this one from CIT Bank.)
Another way to automate the savings from your salary is to use an app like Acorns that saves money for you.
Acorns works by rounding up the spare change from purchases you make and pushing that money into savings. But, it is even better because these fixed deposits actually go into an investment account. Which means that the money you are saving is invested, so it will grow.
6. Reduce your utility bills
This is a tried and true way to find money to save on a low income. Most people just pay their utility bills without looking at them.
But the truth is, you can absolutely reduce your utility bills without sacrificing comfort. Change your thermostat every day when you go to work. You don’t want to pay to keep an empty house comfortable!
In the winter, layer your clothing to keep warm instead of just relying on the heater. Check seals on your windows and doors to make sure you aren’t cooling or heating your home inefficiently.
Purchase smart plugs to help control electricity use or a smart thermostat for your HVAC. Turn off all your lights when not in use.
7. Look for hidden charges
Examine all your bills for any hidden extra charges. Or subscription services you don’t need. A lot of times when you sign up for a free trial, once the first week or month is up they start charging you.
You may be getting charged for something you don’t need or use. Make sure to find hidden charges and cancel them. Your budget could be tight from unnecessary expenses.
8. Negotiate your bills
Another way to save money on from your take home pay is to find more money by negotiating your bills.
A lot of service providers like cable tv will offer serious discounts to new customers. You can either switch to a new one to save a lot, or call up your existing provider and ask them to lower your bill.
They will likely work with you to avoid the loss of a customer, especially if you tell them about their competitor’s offer.
Find ways to save by bundling services such as internet and t.v. Review every bill you pay, and call them up to see if you can save more money!
9. Try a No Spend Challenge
If you really want to find a good way to save money try a no-spend challenge. It can be for a set amount of time like 2 weeks, or 30 days.
You just have to spend no extra money on anything beyond the basic necessities that you need. At the end of the challenge you should have some money to deposit in your savings account!
10. Wear sweaters
One of the best ways to save money from your salary is to lower your utility use. Layer up with sweaters in the winter so you don’t have to use the heater as much. Close doors to rooms you don’t use and maybe even invest in a space heater.
In the summer, use fans and open the windows on some days to really save!
How Much of Your Salary Should You Save?
There are actually different schools of thought on how much of your paycheck you should save each month. The 50-30-20 Budget rule says you should save 20% of your salary each month.
However, the 30-30-30-10 Budget Rule allocates 30% to savings and debt repayment together.
In any case, you need to make sure you are saving money out of your salary. At the very minimum, you need to make sure you have an emergency fund. Just figure out what budget rule will work best for your situation and start following it.
What is the 50 30 20 Rule to Budgeting?
We mentioned the 50-30-20 rule above. It is basically a guide to budgeting and how to spend money from your salary each month.
According to it, you should spend 50% of your salary on needs like housing, utilities and transportation.
You can spend money on 30% of your “wants” or fun money, and 20% of your salary should go to savings and building an emergency fund. To learn more, check out this in-depth guide to the 50-30-20 Budget rule.
It can seem like your salary is gone as soon as you get it. But, If you want to know how to save money from your salary,, you can leverage the tips above.
IT is possible to find ways to save money and meet your long term financial goals. Don’t give up, and adopt these best ways of saving to help yourself.
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Here are my favorite budgeting and saving apps:
Acorns which takes your spare change from debit card purchases and invests it for you to help you make even more money.
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