How to Save Money from Salary?

How to Save Money from Salary?

At the end of the month, do you ever find yourself thinking about how your paycheck disappeared? That one birthday bash, or oh! that shopping trip with your SO and you are left with a meagre amount of money in your account. Well, if this isn’t you then kudos to you because you’re an extremely wise, organized and disciplined person who knows where and how to best spend. No matter the size of your paycheck, your savings and expenditure is only and only in your hands.

Let alone people with a small income, all of know people who earn a hefty sum and still struggle with savings and expenditure every month. The case in point here is that your salary be it big or small, is yours to do with as you please. As George S. Clason explains in his book ‘The Richest Man in Babylon’ to grow one’s wealth; it is essential to save money which means to pay yourself first, and then pay others who make your life easier. Since most of our salary goes to other people like our landlord, food vendors, shopping store owners, etc, it becomes important to keep a part of what you earn for yourself.

Here are 10 fantastic tips on how to save money from your salary:

1. Pay Yourself First Preferably Through Automated Savings

The golden rule to save money from salary is just this – pay yourself first. Let’s tell you a short story that will drive our point home. Every month when your salary gets transferred to your bank account you mentally allocate the sum of money that will go to your landlord, the vegetable vendor, the milkman, and the grocery store. After that, there is some kind of miscellaneous expense that comes up every month without fail. It can be buying a gift for your friend’s birthday or a medical situation, we never know what unexpected expense might be lurking around the corner.

Now, what’s left with you after all these expenses? Well, definitely not a substantial amount. And this is how our story ends…unless, you decide to choose better. There will always be some kind of expense but if you set aside 20% of what you earn every month, you will see that you will be able to build a substantial savings pool in no time at all. A cut of 20% won’t affect your expenditure drastically but at the same time, it will help in the creation of a saving pool. It will be a better idea to make this transaction automated since you won’t have to worry about manually transferring the money every month. An automatic recurring savings deposit will do you wonders! 

[Here’s how to set up a recurring savings deposit]

2. Set a Budget to Build a Savings Pool Gradually

When you set a budget at the start of the month, you achieve two things: a) proper money allocation prevents overspending, and b) regularly budgeting makes you disciplined about savings which means that you learn to live within your means. When you learn to keep track of your expenses and control them, you will automatically become better at saving. Make your monthly budget by breaking down your expenses into major categories and spending according to it is a great way to save money from salary.

Prioritizing here is important – choose wisely what you need immediately, what can be pushed to the next month and what you don’t need at all. Divide your bills into – fixed and variable. Fixed bills are the bills that you pay every month around the same time. These are payments that you don’t have much control over – like paying your rent or the electricity bill. Variable expenses are those you have some control over which can be significantly cut down. Variable expenses include things like household items, shopping for clothes and beauty products, fuel etc.

3. Set Realistic Financial Goals to Achieve Confidence

Ever set a HUGE goal and failed to achieve it? Yes, we understand why that hurts. No one likes to fail especially with a simple thing like budgeting. But the truth is far off. Our observation is that people often fail to stick to their budget because they set up unrealistic goals for themselves. Being ambitious is wonderful, in fact you should challenge yourself often enough to grow in life but to ride the high waves, one must start small. Learn to set realistic goals for yourself.

While there is nothing wrong in setting big goals, the problem arises when you set goals that you can’t possibly achieve in real time. For example, planning that you will spend only Rs. 1,000 on eating out every month when you know that you’re a big foodie is not a feasible plan. With this kind of a goal, it’s almost like you’re setting yourself up for failure. And then when you fail ,you end up feeling bad about yourself while cribbing that “budgets never work for me”. The only way out of this regular cycle is to identify the root cause behind the issue and work on it. In this case, it would be to set a more practical goal for yourself. That way when you realize it, you end up feeling motivated about your potential. Next time you do it, you will feel the joy of actually sticking to your budget and winning!

[Start SIP from the money you saved now]

4. Getting your Own Lunch from Home is always a Good Idea!

How many times have you gone out of office to have lunch? Or how many times have you used zomato or swiggy to order food online? Well, in today’s time online food ordering has become one of the biggest vices. The craving, the variety, and the ease of the whole transaction is what makes ordering food online cakewalk. If you’re one of those people who spend over Rs. 2,000 on ordering food online, especially when you can easily pack your lunch from home, then you need to put a lid on it.

Packing your own lunch from home will help you in achieving two goals at the same time. At first it will help you in cutting down your expenses which will help you in saving money and secondly, eating home-cooked meals is any day better than eating from outside. You can give yourself a monthly pass of 2 or 3 meals outside.. Whatever works best for you and stick to it. Keeping it balanced will help you in leading a healthier lifestyle so start getting your own lunch!

5. Metro, Buses & Carpooling – Public Transport is Key

Okay, we understand that having your own vehicle makes it very convenient to decide when to come and leave but it comes at a huge cost and fuel is becoming increasingly expensive. Having said that, it will do wonders to your pocket if you start using public transport for travelling. If you can’t do it all the time, then do it sometime. Devise a system such that you spend less on your fuel. We suggest you can use a form of public transport for travelling to the office for half the month and the other half take your own vehicle.

You can always take the bus or the metro in the bigger cities. Carpooling-is another easy option with Uber and Ola picking you up and dropping you on your doorstep. Start using public transport and you will see how you’re left with more money at the end of the month than normal.

6. Buy in Bulk when Shopping to Prevent Impulsive Buying

Ever went to the supermarket to get a packet of noodles and ended up buying 10 more items? Yes, we understand the charm of every random food item when you visit the store hungry. It’s a psychologically proven fact that people tend to buy more when they visit the supermarket hungry. A packet of biscuit you don’t even like, can become irresistible and suddenly you’re buying 5 of them. This is what we call impulsive buying.

To prevent impulsive buying, limit your trips to the supermarket. And even when you go, please make sure to have a proper meal at home before you splurge on random, unnecessary food items. In addition to this, another effective tip when it comes to monthly grocery shopping is to buy items with longer shelf life in bulk. Items are generally available at a cheaper price when you buy in bulk. With this, you will also save yourself some extra trips to the supermarket which means less money spent on the fuel as well. .

7. Be Energy Efficient to Save the Environment & your Pocket

Be wise about spending energy – both your own and the planet’s. Earth has a finite source of non-renewable energy which means that the party isn’t going to last forever. Even if it doesn’t affect you directly, it is still our responsibility to take care of this precious blessing the best we can. If you’re one of those people who can’t switch off the light and the fan when you leave the room, then you need to make a minor lifestyle change. You need to be more responsible about saving electricity at your home and your workspace.

Start using energy efficient LED bulbs and make sure to switch off the light whenever you leave the room. In addition to this, limiting your AC usage and plugging off appliances when not in use will help you in saving energy. All of this will eventually reflect in your electricity bill which won’t be as hard on your pocket the next time.

8. Say “No” to Impulsive Online Purchases Using Cards

Online shopping has become way too easy for any of us to even stop for a second and consider if it’s extensively harming our pockets. Let’s explain the cycle to you. You search for an item you need, say a phone cover. You google it and visit many online shopping sites. Unfortunately, you didn’t like any. So now, you shut the search engine and open your instagram, just to see what your friends are upto. And then, SURPRISE! You see hundreds of ads of stores selling phone covers. You check all of them out, and buy 1 instead of 2 because a deal offered you a discount on buying 2. In addition to that, you came across a keychain that had your initial on it.

You end up buying a keychain as well because it looked pretty. It was also very cheap for its quality. You can always give it to someone if you don’t like it as much. Maybe someone with the same initials as you? Voila!! You have now convinced yourself to buy 3 items instead of 1 – most of which you don’t need. This is how online shopping leads to making a hole in your pocket. And what more, the ease of entering your card number and PIN makes it so much more attractive. You feel so high on endorphins and can’t wait for your package to arrive. Well, all’s good and well until you are left with no money at the month end. To avoid that, a good rule to go by when making online purchases is to wait for the next 24 hours. If you still have good enough reasons to buy it then get it, if not then move on. Trust us, this one tip will do wonders to your plans to the save money from salary.

9. Netflix, Wifi, Other Prepaids – Look out for Those Monthly Recharges

The internet has made everything so easy, we hardly realize what’s needed and what can be done without. Having a Netflix account, an Amazon Prime account, and a Hotstar account will set you ahead of everyone else with binge watching but set you miles behind when it comes to saving! In addition to these online subscriptions, there are multiple recharges. Be it your wifi or the landline – there is always one service or another that needs to be recharged because “your plan is expiring”.

While we understand that most of these are items of necessities, we also want you to have a look at it like this. There are needs, and then there are wants. Some of your wants might be your priority but all you needs definitely are a priority, A wifi recharge can’t be done without but you can choose the most suitable plan. While this is a necessity, having all Netflix, Prime and Hostar are not. You need to decide what you want in advance and only make payment for the same. Remove the extra, that is what is taking you down and you will be able to save money from salary.

10. Avoid Addictive Substances like Alcohol & Cigarettes

There are vices like eating too much junk and then there are vices like consuming alcohol and smoking. We don’t wish to moral police you because we understand that adults make their own choices and stick to them. But what we can tell you in advance is that alcohol and tobacco are no one’s friends. And trust us when we say, these are two of the most expensive vices. They are bad not only for your pocket but also your health. And why would we want to do that to our body?

It is generally a good idea to avoid these items altogether or at most, go for the occasional drink. It will be beneficial for your finances and also your body.

This concludes our list of ways to save money from salary. This list is, in no way exhaustive and one can always come up with more creative ways to save money from salary (ways that work best for them). 

Written by

Priyanshi Bhardwaj