Setting aside money from your monthly income may seem difficult, but with the right strategies, it becomes a routine that leads to lasting financial freedom. Here are 6 proven ways to help you save better:
Create a Budget and Track Your Spending
Start by identifying your monthly cash flow. Allocate your salary into:
- **Needs** (e.g., rent, groceries)
- **Wants** (e.g., entertainment)
- **Savings**
Use tools like Excel such as YNAB to plan ahead. This helps you understand your finances and make changes.
Prioritize Savings Before Spending
Before spending on anything else, put aside a portion of your income into a savings or investment account. Automating this process ensures you don’t forget to save. Even saving a small portion monthly can build long-term wealth.
Eliminate Wasteful Spending
Analyze your monthly spending and find spots to cut back. For example:
- Reduce dining out
- Pay off high-interest credit cards
- Use ride-sharing instead of driving
Minor adjustments lead to big results.
Define Your Financial Objectives
Know what you're saving for: short- or long-term goals. Break large goals into smaller targets so you can measure your progress.
Use the 50/30/20 Rule
This proven method divides your income:
- **50% for Needs**
- **30% for Wants**
- **20% for Savings or Debt**
You can tweak the percentages based on your lifestyle and income.
Review Your Budget Monthly
Analyze your income, expenses, and savings each month. Reviewing your finances keeps you accountable and allows for smart adjustments.
How Much Should You Save From Your Salary?
Your savings rate depends on your income. Common benchmarks include:
- **10% Rule** – Best for beginners
- **20% Standard** – Recommended by financial experts
- **30%+ Advanced** – For aggressive savers or high earners
- **Custom Rate** – Adjust based on your bonuses
If you're repaying debt, save a smaller percentage while you reduce liabilities.
Increase Income with Extra Gigs
Raising your income is as powerful as cutting costs. Consider these side jobs:
- **Freelancing** – Offer services on Fiverr
- **Online Tutoring** – Teach via how to build emergency fund Chegg
- **Selling Products** – Sell crafts or art on Etsy
- **Delivery or Rideshare** – Join Lyft
- **Rent Assets** – List a room on Airbnb
Channel all extra income to savings to reach your goals faster.
Why You Need an Emergency Fund
An emergency fund protects you during financial crises like job loss or medical bills.
Recommended Fund Size:
- **Start small** – $1,000 is a great beginning
- **Target** – 3–6 months of living expenses
- **Advanced** – 6–12 months for freelancers or those with dependents
Use a high-yield savings account to earn interest while keeping funds accessible.
Final Thoughts
Saving money from your salary is essential to achieving financial independence. By budgeting, setting goals, tracking your habits, and increasing your income, you position yourself for long-term success.
Small steps, taken consistently, yield big rewards.