It looks like, saving money is at the top of your financial to-do list. It can be challenging to save from your salary while covering your basic living expenses, lowering down your debt, and stepping towards your financial goals. Especially, if you are someone like me with irregular income resources, it becomes even harder to track all your incomings and spending resulting in empty pockets. Leaving us with one troubling question every time, “Where did all the money go?”
Sometimes the hardest thing about saving from your salary is just getting started. Once, you get started, the peace of mind, and flexibility that this generates always become worthy of your effort. Even middle-class or people with a small amount of income can benefit from savings. So if you’re looking for some tips or guidance on how to save from your salary, then this article will help you to put some strategies into action starting next paycheck. Remember, you’ll get results by doing, not by just reading about it.
Benefits of Savings
Before we get down to how to save, let’s list down some benefits of savings which you can have with little efforts
- Helps in emergencies
- Shield against sudden Job loss
- Help finance your next vacations
- Ease your debt duties
- Financial freedom
- Helps finance further education, wedding,
- Finance your dream car
- Peace of mind
Track Your Expenses
The first step to start saving is to figure out where and how much you are spending in a month. It means every expense from amazon prime to house mortgage. Once you have all the data written down, categorize all of the spending. To make sure you have categorized properly and accurately, you can use your debit/credit card statements.
You can list down yourself or use any digital tool which even helps with categorizing your bank statement automatically for easy budgeting.
Budget For Savings & Set Priorities
Once you have categorized all of your spending, you can now start recording your expenses into a workable budget which you can actually follow later on. Your budget should be outlined and prioritized in a way that your expenses will measure your income eventually. This way, you will be able to plan your spending without exhausting your budget. Keep in mind the daily expenses which do not seem very obvious like snacking etc.
Golden Nugget: Introduce Saving Category – Try to save 10 – 20% of your income.
Find Ways to Save From Your Paycheck
This is the one point to really focus on if you have been struggling to save from your paycheck. You need to focus on things that can enable you to free up some extra cash.
After covering your living cost and little money for fun, everything should be in your savings. Actually, keep the fun part into consideration as well. If you got Netflix and keep forgetting all of the epic sitcoms you wanted to watch. I guess it’s time to either watch them or cancel your subscription.
When it comes to saving on your paycheck, a good budget plays an important role. If your biggest expense is food and you’re dining out a lot then ditch some eating out plans, and put some thought into making nutrient-rich food at home. You can also use these tips to save some money on groceries:
- Plan meals based on what’s on sale.
- Create menus and cook just enough to avoid food waste.
- Shop with the list.
- Use coupons, cashback apps to make items more affordable.
- Bargain to keep the prices down.
Other expenses you want to consider downsizings are your utility bills or tech which you don’t use.
Set Saving Goals
If you really want to save, then it’s time to set in place some saving goals. Start by thinking why you want to save – what is the purpose you are trying to achieve, perhaps, you are getting married, want to go for vacations, save for retirement or just want financial freedom. The goals you will jot down will help you to stay on track. They will give you the courage to avoid next time you want to buy some stupid thing you actually will not use.
After putting your goals in place, figure out how much money you’ll need and how long it can take you to save it.
Your goals should be divided into two categories:
Long Term goals
- Down payment on your home or remodeling project.
- Your child’s education
- Retirement
Short Term Goals
- Emergency fund (3-9 months of living expenses, Just in case)
- Vacation
- Down payment for a car.
Try to set small, achievable short-term goals for something fun but big enough that is difficult to buy with hand-on cash like electronic devices or holiday gifts. Reaching small goals will give you a psychological boost that will reinforce your saving habit.
Conclusion
We know you will fall behind your plans, so it’s important to keep your “why are you saving?” purpose in mind. Review your budget and keep an eye on your progress every month. We promise you, you will always be in better shape financially than your last paycheck. Plus, you will find more ways to save more and achieve your goals faster.