How To Save Money From Your Salary Every Month
We agree it is tempting to spend all your money when your salary gets credited to your account.
But it is important to save a little bit of your salary and we are going to share tips to save more money.
You might be asking why you need to save money because your salary helps you live comfortably. However, many millennials live from pay-check to pay-check, so we need a solid plan to save for unexpected expenses and for our future.
A recent EY-Refyne survey found that 80% of Indian employees exhaust their salary before the month ends, while 34% run out of money by the middle of the month. Only 13% were able to save a decent amount from their salary.
This shows how there is a clear need for Indian employees to save more money and invest in the right investment instruments.
So, here’s our article, helping you all to start saving and if you are someone who is already a Super Saver, then we hope this article will help you save better.
Follow these steps to save money from your salary:
Budget Everything Before Hand
The baseline of all financial planning is budgeting and it can help you achieve several short and long-term financial goals.
It is important you always budget based on your net income (i.e) the salary you get in your hand after all the deductions.
Calculate how much you spend on the basics, such as rent, food, transport, bills (electricity, internet, monthly installments, etc.), and other basic expenses to create a budget and then follow it.
The amount you have left should be put into your savings as soon as you receive your salary.
It is important that you save first and then spend towards your other expenses. As a general rule, you should spend 50% of your income on necessities, 15% on personal expenses and 35% should be saved for your goals.
Automate Your Savings
This advice has been touted by us so many times, as we believe when you automate your savings process, it takes the willpower out of saving and you can do it seamlessly every month.
Saving manually might not work for many as you might get tempted to spend the money you were supposed to save.
You can do this by investing in a mutual fund scheme via the SIP (Systematic Investment Plan) mode. Starting an SIP will ensure that a certain amount of money gets deducted from your bank account every month.
You can also start a Recurring Deposit with any bank and they will deduct a certain amount periodically. Depending on your investment horizon and risk tolerance, you can choose the right instrument for your goals.
Analyze & Reduce
The best way to save money is by analyzing your expenses. This is the most important step as it will help you understand your spending habits.
If you are spending a lot of money in a particular category, you can understand why you are doing so and how can you rectify it. If you are someone who is being tempted by online sales, you can try a ‘No Spending’ challenge.
Once you analyze your spending habits, you should find ways to reduce your spending if you have a spending problem.
When you cut down on your unnecessary purchases, you will be able to save more money in the long run. Make sure to analyze your spending every month to see how the changes you made are helping you save money.
Know The Difference Between Needs & Wants
We live in the age of social media. Most of the time, we are pressured into buying things that we don’t need.
It’s alright to indulge in expensive or frivolous purchases once in a while. However, you should have a clear understanding between your wants and needs.
For example, eating food every day is a need while eating food from a fancy 5-star restaurant is a want. Take a moment every now and then to differentiate between the two.
You will be amazed at how much money you can save when you do that.
In The End
Saving money might not sound like a fun thing to do but it is an essential step that has to be taken by you. The money you save can come in handy at any time, especially during unexpected emergencies.
We hope this article inspires you to start saving from today itself. If you want more motivation to start saving money, we have written a detailed guide on how you can stay motivated to save money.
If you are looking to become a Super Saver, create an account with Koshex today, as our platform is made for Indian millennials, who are looking to better their saving habits & increase their savings each month.
Creating an account with us takes less than 3 minutes and you can do more than just save your money, as our platform will help you manage your finances better and increase your disposable income.
How much money you save from your pay check and where you store it will influence how successful you are at stopping inflation from stealing your money. So, to beat the impact of inflation, follow our recommendations on how to save money from your salary every month.