Budget is one of the most important parts of every job. However, it can be hard to stick to. Most of us are concerned about how to save money from our monthly salary. From food expenses to clothing and other daily needs, there are numerous ways we could spend money if left unchecked.
But where do you start? How do you make sense of the different costs and compare them?
Check out our ultimate guide – Money-Savings tips that will help you plan your finances and save more money than you can think through simple lifestyle changes.
In this blog, we’ve come up with this handy guide that’ll let you save money from your salary by learning how to do so — without giving up on living a luxurious life! Let’s take a look.
How To Save Money From Salary?
If you want to save money on your salary, you need to know how much of your income goes towards paying for your necessities and how much goes towards covering your needs. There is no one-size-fits-all approach to saving money from salary. Many different methods can allow you to save some money, and a few of them are listed below:
1. Get Rid of Your Debts
The first thing you should do to save money is to get rid of your debts. It’s not easy, but it’s very important in order to avoid any expenses.
If you have no debts and you’re earning a salary, then you can spend all your money according to your needs and wants, because there is nothing that can stop you from doing so. But if you have debts and are paying them off with your salary, then it will be very difficult for you to save money because every debt requires money.
The most important thing is to pay off the smallest debt first so that after this one, it will be easier for you to save more money and then gradually work on paying off the other ones until everything is paid off.
2. Automate Your Savings
Save more by automating your savings. You can make this easier by setting up a direct deposit from your paycheck into a savings account. The money that you save will likely be the same amount each month, so there’s no need to keep track of it or remember to transfer it.
There are several options for automating your savings. Some banks offer free online tools that allow you to set up automatic transfers from your paychecks into savings accounts. Other banks may have mobile apps enabling you to do the same thing. If you don’t have an account with them, consider an online bank that allows direct deposits in addition to their mobile apps.
3. Start Using Real Cash
Credit cards are great for convenience, but they’re also a major drain on your finances. One of the biggest mistakes people make is using their credit cards to pay for everyday expenses, like grocery shopping or eating out when they could just as easily put that money in the bank.
Therefore, if you want to save money from your salary, the best way is to start using real cash. This means that you will have to pay for everything in the form of cash or checks. When you use real cash, it is easier for you to track and manage your expenses, and that can significantly help you with saving money.
4. Save & Invest in the Right Savings Tool
Investing in a savings tool highly depends on your financial goals. You should invest your money into something that gives you the best returns while keeping your money safe.
What Are Some Secure Savings Tool Options?
a. Freo Save’s Digital Savings Account
The Freo Save Digital Savings Account is a great way to save money and earn interest. Freo Save offers an impressive 7%* interest rate on your money which is higher than most savings accounts. It is a zero-balance account with no joining fees, and since all the major account features are available on the app, managing your funds becomes easy.
b. Mutual Funds SIP
Mutual funds SIP (Savings Incentive Plan) is a type of plan that allows you to save your hard-earned money without any risk in the market. These plans are specially designed for employees who have a fixed salary and want to save a certain amount each month. The savings are invested in stocks, bonds, ETFs or mutual funds.
Mutual funds SIPs can be offered by private sector companies, government organizations, or public sector bodies. The main objective of these plans is to encourage employees to save their hard-earned money and invest it in stocks and other financial instruments, which can generate more returns.
You may not be aware of it, but most of the money you earn will likely go into your Provident Fund or Employees’ Provident Fund. Different government bodies manage the two funds, but they both have one thing in common: they invest your savings to grow. The zero risk feature and no tax liability make it the best savings plan for most people.
How you contribute to these funds depends on which one you have — EPF or PPF.
Both are tax-saving instruments that help you save for your retirement. But some important differences between them will help you decide which one makes sense for you.
5. Find Ways to Cut Spending
One of the best ways to save money from your salary is by eliminating non-essential expenses.
What Are the Best Ways to Cut Spending?
- Wait for discounts before purchasing something when it’s not urgent.
- Review and cut down your recurring charges
- Track your credit card spending
- Avoid eating out (or eating at home all the time) whenever possible
Whether you are saving for a vacation, a wedding, or a house down payment, saving on your salary is the best way to ensure that you’ll have money when you need it. Remember, your financial independence isn’t only about earning more; it’s also about spending less.