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Who doesn’t want to save money from salary? But most people, due to their bad habits, are unable to save even a little by the end of the month. Saving is a habit. If you don’t have this habit, you will struggle your entire life to save money. 

No matter how small the amount, start building the habit of saving. Most people think that saving a small amount won’t make a difference. But just think about this: if you have the habit of saving small amounts, then when you start earning a large amount in the future, this habit will lead to significant savings.

Why Is It Important To Save Money From Your Salary?

Saving money in today’s time has become critical. We often think that our salary is low today, but it will increase tomorrow, and then we will be able to save more. However, as our salary or income increases, our expenses also keep rising. Even people who earn one lakh monthly do not feel financially secure today. Why? Because they don’t have savings proportional to their income.

Suppose you are earning a monthly income of 20,000. Out of that, you are saving 10,000. But your friend is earning a monthly income of 1,00,000, but also saving 10,000. Then between the two of you, who will feel more financially secure? Obviously, you will feel more secure because your expenses are lower.

If both of you lose your jobs tomorrow, your friend may not be able to survive. So, it doesn’t matter how much someone earns; what matters is how much they save and whether they invest that savings in the right place or not.

Consider the second scenario. Imagine that tomorrow, you have a family medical emergency. Just think, you have a little bit of savings, which is a very small amount compared to the medical expenses. What would you do in that situation? Would you borrow money from your friends or relatives, or take a loan from a third party with a high interest rate? Or perhaps you wouldn’t even get a loan. Let’s assume you do manage to get a high-interest loan. Then, by repaying that loan, you would become financially strained. Imagine that situation.

People save money to help in unpredictable future situations. It is human psychology that when given the option of reward or loss, they can tolerate not getting a reward, but they never want to experience a loss. Keeping the possibility of unpredictable future losses in mind, they start saving. Savings provide the courage to face unpredictable future situations. Therefore, saving is very, very important.

If you have savings, then your future is in your hands. There will be no fear of the future or of losing any job. You can live your life freely.

How Much Should I Save From My Salary Each Month?

If you are wondering how much you should save from your monthly income, it depends on your future needs and plans. Suppose you are saving for an emergency fund; then you need to save according to how much you want to accumulate for that emergency fund and within what time period. Based on that, you will have to save accordingly.

Suppose your main reason for saving is to create an emergency fund. Suppose your salary is 50,000, and you want to create an emergency fund for six months, which totals 3,00,000. Then you need to plan how much time it will take to achieve this goal. Accordingly, you will need to know how much you should save monthly.

I just took your emergency fund as an example here. Maybe it could be your future home or a budget for investment in some property.

Start by creating small savings goals. When you achieve these small goals, it will inspire you to achieve bigger goals and motivate you to take more actions to accomplish them. Don’t set a big savings goal right from the beginning, as it may demotivate you if you are unable to achieve it. Therefore, gradually move towards bigger goals by successfully achieving the smaller ones.

But a better financial decision is that you should aim to save at least 10 to 20% of your income.

How do I save money from my salary?

1. Automate Your Saving

The best way to automate saving is to set up an automatic money transfer from your salary credit account to a separate savings account. Most of the time, if your salary credit account and savings account are the same, it becomes hard to save money. Therefore, plan to set up an automatic money transfer to a different savings account. This will help build a saving discipline.

2. Find A Reason To Save

If you don’t have a particular reason to save money, you won’t be motivated to save it. Therefore, come up with a strong reason that will motivate you to save money. If you don’t have any specific reason, start saving by thinking about unpredictable situations in the future.

3. Build A Monthly Budget

If any work is started without a plan, there is a possibility that it may not be completed. Nowadays, most people are spending without budgeting, which results in them spending more than necessary. Just think, if you have a budget that outlines how much money to spend in various areas, in most cases, you will stick to that budget. Budgeting helps build financial discipline within you.

4. Track Your Monthly Expenses

Track all your expenses. By doing so, you will be able to record and know how much you are spending in each category. Then after one month, you can adjust those expenses and save that money. Suppose, after tracking your expenses for one month, you find that you are spending more on shopping than necessary. Then, next month, you can budget for shopping and make some savings.

There are many expense tracker apps available on the Play Store and app store to track expenses. You can use them to easily track your expenses.

5. Skip Unnecessary Expenses

Sometimes, after making an unnecessary expense, we realize that it wasn’t really important to buy that item or spend money on it. But why do we do this? We often do this due to social influence. For example, if your friend has a branded shoe, you might get influenced by them and buy the same brand of shoe. After buying it, you may realize that it wasn’t necessary.

After using it for a few days, you might not even use it much. Therefore, apply the 30-day rule for making any purchase. According to this rule, for any significant expense, give yourself 30 days to think. If after 30 days, you still feel that the expense is absolutely necessary, then go ahead and make it. But in most cases, you won’t end up buying it.

6. Open A Separate Saving Account

If your salary credit account and savings account are with the same bank, it can become a bit difficult to continue saving. Therefore, it is important to keep your expense account and savings account separate. And make it a bit difficult to easily withdraw from that savings account, such as through online transfers from your savings account.

7. Build Sense Of Urgency

Until you create an urgency to save, you won’t find the motivation to save. Therefore, build a sense of urgency. A financial goal is necessary for a sense of urgency. First, set your financial goal, then build the urgency to achieve it.

8. Starts With 1 Percent Saving

Most people say their salary is very low, they cannot save money, or their expenses are too high. Alright, I understand that your salary is very low and your expenses are very high. But you still have to save just 1% of your money. By doing this, you will build the habit of saving. First, save 1%, and then spend the remaining money.

9. Repay Loans As Soon As Possible

Today’s loan is tomorrow’s expense. If you are in debt today, don’t think that tomorrow you will be free from your expenses. And these expenses will affect your savings. Therefore, a better financial decision would be to close all your bad loans.

10. Focus On Increasing Income

To achieve a high amount of savings, you will need to increase your income. You should not just depend on your salary to save more. Therefore, it’s necessary to focus on multiple sources of income. When you generate income from multiple sources, you will have multiple options in every situation, increasing the possibility of saving more.

Conclusion

The first step to achieving financial security and financial goals is saving. Saving is a financial habit. First, build the habit of saving small amounts, and you will automatically start saving more. Most people struggle with this because they lack the habit of saving. Today’s savings can save you a lot of time in the future. For that, it’s definitely necessary to budget, track expenses, and focus on your savings.