Sundaymail Editor
LEARN how to save money every month and how you can create a plan to achieve your financial goals using seven ways.
Whether you earn a lot or less, one thing everyone needs to know is how to save money from their salary every month.
You need to have an action plan or a checklist of sorts.
You also need healthy financial habits that will make it easier to save, rather than spend most of your salary.
Here are the seven ways:
Make a monthly budget
Make a monthly budget by dividing your expenses into major categories, and stick to it.
The budget will help you avoid overspending, which means you will have more money to save from your salary every month. Record your expenses against your salary in order to monitor your financial situation more accurately. This helps plan and outline costs for the next month.
Check the cost of household expenses
Household expenses include rentals, electricity and water bills, food and medical care.
It would be best to control household expenses to avoid spending more than 25 percent of the salary. For example, renting in a moderately dense area could reduce the rent and other bills. Spending moderately and sparingly can help lower costs and save more.
Purchase items in bulk
Buy items in bulk because it saves money.
Non-perishable items such as toothpaste are usually offered at a lower price and are more economical in bundles or twin packs. It not only saves money because of larger quantities, but also lessens the frequency of store visits. This results in less spending on impulsive purchases and travel costs.
Avoid making fancy purchases
Many of us like to shop online, eat outside, see a movie and buy new clothes.
But are these expenses necessary? They are optional, and it is possible to live without overspending on these pleasures.
Depending on your income, set a limit on these pleasures to avoid overspending.
The recommended maximum for fun and pleasure spending is 15 percent of your income.
At all costs, be sure not to exceed this limit.
Track your spending
Failing to track how you spend can affect the way you save. We assume we spend a certain amount of money on groceries, yet in reality, it is double that figure. Tracking your spending will allow you to know how your salary is being used.
Before giving up on saving money from your salary, take a look at your spending for the last few months. Most of the time, we discover that there are areas where we can cut back in order to prioritise saving.
Put your salary increase to good use
Anytime you get a raise, it is tempting to use it to reward yourself. Just because you make more does not mean you have to spend more. Resist the urge to spend the extra money and, instead, put it into savings.
Treat yourself with caution
It is necessary to treat yourself occasionally.
By indulging yourself occasionally, you can ensure that your impulses are satisfied.
This will save you the trouble of indulging in a “cheat spend”, which could turn out to be bigger than your finances can handle. So, if you have a sizeable sum left over as savings, set aside a small portion of your salary for yourself and your wants.
You may not be able to follow all of these tips at once.
However, try to integrate these habits into your everyday financial routine. This will gradually make it easier for you to cultivate the habit of saving up a significant portion of your income monthly.
Saving 20 percent of your salary is a good goal. However, it does not have to be the end goal.
In order to successfully save money, you do not have to deprive yourself.
Living frugally is a lifestyle choice and also a mindset.
Prioritise your savings, and cut out the things that do not really matter.
Have fun and get creative with finding ways of spending less. — ZBFH
Online Reporter