How to Save Money from Salary?

Too much impulsive and unnecessary shopping paired with unused subscriptions to activities and OTT, along with a lack of financial discipline, can make you go broke before you can even reach the end of the month.

If you find yourself in a cash crunch almost every month, it’s time to sharpen your savings knife. And as the investor Warren Buffet rightly says, “Don’t save what’s left after spending; spend what’s left after saving,” it’s high time to prioritise your investing and saving needs.

In this article, we’ll help you understand how much of your salary you should be saving and also give you 10 effective tips on how to save money from your salary every month.

How Much of Salary to Save?

Saving every month depends on your income as it limits how much money is saved. Hence, your income is one of the major deciding factors that play an essential part in determining how much to save.

But exactly how much of your salary should you save?

The answer to this question is nothing concrete since everyone earns and lives differently and has separate goals for saving. Yet, you must remember one thing when managing your salary: focusing on increasing your savings rather than running behind in increasing your income.

Follow the 50-30-20 rule of budgeting to save money from salary. This rule divides your salary into three parts: 50% for monthly living expenses (needs), 30% for lifestyle expenses (wants), and 20% for savings.

10 Practical Tips on How to Save Money From Salary Every Month

In today’s uncertain economy, saving money each month from your income has become a necessity. Moreover, saved money helps create a safe financial net for emergencies and for building future financial security. But where to begin?

Here are our top 10 suggestions on how to save money from salary every month:

1. Make a Monthly Budget

   At first, it may seem tedious to jot down a budget every month and even more difficult to follow it all along. It may seem daunting, but it’s not extensive work.

   No, you don’t have to maintain a giant registry to track all your little daily expenses, but we are simply asking you to begin noting down the spending and savings happening every month. Noting down these things will help you gain a clear picture of the money you are spending on unnecessary things and track the amount of salary going into saving.

2. Track Your Monthly Finances

   Forming the habit of tracking your expenses from your income is great, especially when done right from the beginning of your financial journey. This helps in creating financial discipline.

   To track your expenses, begin by noting your monthly salary and then document the monthly expense that goes around. This should be both fixed and variable categories:

   • Fixed expenses: This category includes the necessities like electricity bills, house rent, water bills, essential groceries, commutes, and other unavoidable expenses.
   • Variable expenses: Under this classification, recurring payments are placed, like medical bills, travel expenses, eating out, and more.

   Tracking your monthly expenditures is essential, but doing them manually is a hassle and can be prone to human errors like missing out on a small but significant expense. So, what’s the solution? Jupiter’s federal savings account!

   Through our federal savings account, you can get real-time insights into your spending and the feature to link your other bank accounts with the Jupiter Money app. We can help you categorise your spending into different brackets, like food, shopping, rent, OTT subscriptions, and more, using smart technology.

   So, quit worrying about how to manage your salary and experience the convenience of budgeting with us!

3. Cut Down Some Expenses

   After making a monthly budget and tracking your expenses, it’s time to come to the eliminating part. You now have a clear picture of where your salary is used and how much of your salary is saved, so you just need to decide which expenses need to go.

   For example, the necessities like electricity, water, gas bill, house rent, and groceries cannot be cut down. So instead, focus on the next part of expenses which are the “wants” of your life. These include impulse shopping, unused subscriptions, eating out, and other unnecessary costs. They are luxuries that can be ignored or reduced, and the money saved can be added to your savings cap.

   Other ways in which you can cut down your expenses are:

   • Ditching personal vehicles and choosing public transport to save money on petrol or diesel
   • Switching your mobile phone plans with a cheaper internet plan
   • Using discounts, cashback, or money-saving coupon deals when shopping online or shopping during a festive season for heavy discounts
   • Cancelling memberships to clubs, gyms, swimming, or any other activities which you don’t do for more than one or two days of the week
   • Prepping meals and packing your own lunch instead of ordering out
   • Getting rid of excessive drinking or smoking

4. Choose a Wiser Debt Option

   Debts can drain your savings plans, but sometimes borrowing funds is your only option. In such scenarios, it’s necessary to select a wise source of borrowing to solve your financial dilemma of how to save money each month.

   With Jupiter’s Pro Salary Account, you get an on-demand salary at any time of the month with a zero-interest rate for one month and an interest rate as low as 1.5% after three or six months of borrowing. So, return in a flexible period with minimal interest rates.

5. Have Limited Cash Flow with You

   Don’t make your entire salary accessible to you. The more funds you have in your actively-used bank account, the stronger your urge will grow to spend it before the month ends. So, make your funds inaccessible by transferring the money to a bank account not linked to a UPI account or debit card.

   Use the “out of sight, out of mind” theory. You can even transfer it to a savings account or automate a mutual fund or smart deposit transfer.

6. Put Your Savings on Auto-Pilot

   Even after trying your best to save money, if you are still left wondering how to do savings from your salary every month, then it’s time you switch to technology for assistance. Saving money will not suddenly happen; it’s a habit to develop and maintain. And while it is important, you may forget to keep aside some money every month. This is when automating the savings process comes to use. When you automate your savings, you make savings a priority and watch it grow over the period.

   Jupiter can come to your rescue! You can automate your savings, invest in pots that help you define and save for a specific goal, and choose the time period according to your convenience.

7. Invest in SIPs

   A Systematic Investment Plan, SIP, is one of the most sorted investment options which requires consistency and financial discipline to save money each month. In this approach, you invest a small amount of money in the market regularly, mostly every month. Moreover, you can start a SIP for more than one fund, diversifying your portfolio. When investing in a SIP, your monthly return is reinvested in the invested amount until it reaches maturity. Due to this, your amount is exposed to compounding, growing your wealth over time.

   Jupiter can help you start a SIP with an option to choose from more than 1000 direct mutual funds. So, select the ones that suit your financial goals and risk-taking limit. Here’s what you can expect from us:

   • Start a SIP within seconds
   • Missed a monthly SIP instalment? No worries! Our “No-Penalty SIP” won’t take any commissions, penalties, or investment charges
   • Get the option to invest daily, weekly, or monthly, where you can invest as low as ₹10 every day, ₹100 every week, or ₹1000 every month
   • Explore other investment options like FDs or buy gold as low as ₹11 daily with the option to auto-buy for the ones wondering how to invest in gold with us

8. Spend Bonuses Wisely

   Did you recently get a good raise or bonus? That’s great! And it must be so tempting to spend it all on that dream purchase you wanted to make for months or treat yourself for all the hard work you did. But wait, take a moment and think about where and when to spend money before making an impulsive purchase.

   Just because you earn more doesn’t mean you have to spend more. If you continue with this mindset, any figure you make will seem small, ultimately dissatisfying you. So, resist your urge to spend that extra money earned.

9. Avoid Late Penalties

   A lack of timely repayment of your credit card bills and EMIs can lead to heavy penalties. These useless expenses can easily be avoided by taking care of your repayment schedule. One way to make sure you make timely payments is by using auto-repayment apps so you don’t skip a month’s payment and avoid deducting the size of your income.

10. Get a Health Insurance

    But how to save money each month by getting health insurance where you’ll have to pay monthly premiums? The answer to this question is simple; it’s better to splurge a few thousand yearly in health insurance premiums than to spend lakhs on medical expenses and hospitalisation due to accidents or illnesses.

Bottom Line

Saving money from your salary is not an impossible task. By adopting a few simple habits, such as tracking expenses, creating a budget, investing in long-term goals, and avoiding unnecessary purchases, you can start to see significant savings over time.

It’s important to remember that every penny counts and small changes can lead to big savings over time. Stay focused on your financial goals and regularly review your progress to ensure you’re on track. Set realistic goals, stay disciplined with your spending habits, and be patient with the process. Saving money requires commitment and consistency, but the long-term benefits are well worth it. Start taking control of your finances today by implementing these tips into your daily routine. You’ll be surprised at how quickly your savings can grow!

Frequently Asked Questions

Written and Reviewed by:

Priyanka Rao

Author

Priyanka Rao is a content strategist for Jupiter.Money, and specializes in writing on topics related to finance, banking, budgeting, salary & wages, and other financial matters. She has a passion for creating engaging content that resonates with audiences across various digital platforms. In her free time, Priyanka enjoys traveling and reading, which allows her to gain new perspectives and inspiration for her work. With a keen eye for detail and a creative mindset, Priyanka is committed to creating content that connects well with her readers, enhancing their digital experiences.

Colin D'Souza

Financial Content Reviewer

Colin D'Souza is currently the Vice President of Banking Programs and Strategy at Jupiter Money, where he oversees the development and execution of key banking initiatives. With a strong background in retail banking, sales, and strategy, Colin brings extensive experience in driving business growth and enhancing customer engagement across various financial products and services.

Before joining Jupiter, Colin was the Head of Corporate Salary Business at IDFC First Bank, having previously served as the Zonal Business Head for Retail Liabilities & Branch Banking. His leadership at IDFC First Bank focused on expanding the bank’s retail banking footprint and optimizing branch operations. Prior to that, he held senior roles at Citibank India, where he was Vice President and Regional Sales Head, responsible for the sales and distribution of consumer assets and liabilities, including services for high-net-worth individuals (HNI) and ultra-high-net-worth individuals (UHNI), as well as current accounts.

Colin also served as Vice President and Regional Sales Manager at HSBC, leading retail liability acquisitions and driving business development for investment and insurance products. Earlier in his career, he managed a cluster of branches at CitiFinancial, where he was responsible for credit, risk, and P&L management.

He holds a Post Graduate Diploma in Management from the Institute of Management Education and Research (IMER), adding a solid academic foundation to his professional expertise in banking and strategy.