Setting aside money from your salary may feel overwhelming, but with the smart habits, it becomes a habit that leads to long-term financial freedom. Here are six effective ways to help you save better:
Create a Budget and Track Your Spending
Start by identifying your income and expenses. Allocate your salary into:
- **Needs** (e.g., rent, groceries)
- **Wants** (e.g., leisure)
- **Savings**
Use tools like a budgeting app such as YNAB to plan ahead. This helps you see where your money goes and make changes.
Pay Yourself First
Before spending on anything else, deposit a portion of your income into a savings or emergency fund. Automating this process ensures you prioritize savings. Even saving 10% monthly can make a big difference.
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 bikes instead of your car
Small changes lead to large savings.
Define Your Financial Objectives
Know what you're saving for: emergency fund, vacation, car, home. Break large goals into smaller targets so you can track your progress.
Follow a Simple Budgeting Formula
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.
Track Your Progress Regularly
Analyze your income, expenses, and savings each month. Tracking progress keeps you accountable and allows for quick corrections.
Recommended Savings Rates
Your savings rate depends on your budget. Common benchmarks include:
- **10% Rule** – Best for beginners
- **20% Standard** – Recommended by financial experts
- **30%+ Advanced** – For aggressive savers check here or high earners
- **Custom Rate** – Adjust based on your debts
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 freelance options:
- **Freelancing** – Offer services on Upwork
- **Online Tutoring** – Teach via VIPKid
- **Selling Products** – Sell crafts or art on Etsy
- **Delivery or Rideshare** – Join DoorDash
- **Rent Assets** – List a room on Airbnb
Direct all extra income to savings to reach your goals faster.
Build Financial Protection
An emergency fund protects you during unexpected events like job loss or medical bills.
How Much to Save:
- **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 key to reaching financial independence. By budgeting, setting goals, tracking your habits, and increasing your income, you position yourself for long-term success.
Be patient, be steady, and your finances will grow.