I welcome you guys to this post which is how to save money from salary every month especially those of us with low income salary and living in a developing country.
There’s one thing i would like you guys to know, you must not earn a fat salary before you can save a sum amount from it on monthly basis. Money saving all depends on the planning and strategy to which we use in order to save money especially in this hard economy. All these depend on how you tightened yourself and milk out some bucks from you monthly salary every month.
All you needed right here is to be calm and read from the beginning to the of this post which is how to save money from salary every month.
The Basic Steps Required to save money from salary every month
So we all have to take step by step and i must tell you that it may not really be easy for you, especially if you are a heavy spender.
1. State Your Goal
Okay you want to save money from salary every month, first you should note to yourself the purpose which you want to save the money for. Stating your goal of saving money every month will help you to determine and same time motivate you to save money from your income. Especially if it is something that you are desperate in need and also will be useful to you.
So if you are planning on saving money from salary every month, first state or draw out the goal or the purpose of it.
2. Drawing Out the Certain Amount You want to save
You can can’t just start saving money without knowing the exact amount of money that you want to achieve in a month or a year. Saving money entails a lot of purposes and which you should know the amount required for that particular purpose. This you can Also call it budgeting. For example i want to build a house, first i will make an estimate on the cost of building a house both interior and exterior, from there in will know the amount of money required in building the house. What i have to do it to make a budget that will help me to finish the house and it might take up to 2 years or more.
Sometimes we just want to save money without having a certain need to do so but just that we want to save money from our salary every month in order to have cash that we will use during a rainy day. But still we also have to map out the certain amount that we want to attain in a year.
3. Track Your Expenses Weekly or Monthly
One easy way to track your expenses is to come up with a rating system. For instance, if you earn 60,000 monthly and plan to save 50% of your salary monthly, draw up a rating system. Say, at the end of the month, you end up saving only 10% of your income, be honest enough to score yourself a mere pass mark. However, if at the end of the month, you discover that you have saved 60% or even 65% of your earnings, then you deserve an A plus. Please remember that you cannot save 100 per cent of your salary even if you are in a developed country.
4. Cut Short Your Excessive Spending
You have made up your your mind that you want you to save money from salary every month, and you are a heavy spender? I don’t think you can achieve that at all. Money saving from monthly salary is not just by words of the mouth but rather you as an individual being able to achieve that.
First you have to cut short of many of your expense which includes shopping, going to drinking parlors or clubbing etc. General i will say that that which you know that you spend a lot of money or unnecessary, you should cut it off completely. For example you are spending 20k per month on fun, you can cut off completely or reduce it to 5k per month.
Another example is that you spend a huge amount of money on satellite TV channels, to get a complete package you spend a huge amount of money for it. It is advisable to go for a lower one which contains channels with your best interest and save cost.
5. Avoid Going to the Restaurant
Have you ever calculate the money you have spend on eatry house? Okay you need to that right now if you are the type that go to a restaurant on daily basis. You order for a food and drink both afternoon and night and which might cost you up to 2k per day, and if you calculate it by seven days then you will know the sum amount of money that you have been spending on food and drinks.
I know this will be difficult for guys here but if you really want to save money from salary every month, then you have to cut short on the number of times you go to the restaurant or better still try and prepare food yourself.
Ways that you can save money from salary every month
Having state how you as an individual can save money from salary every month, below are the three major ways that you can achieve that.
1. Savings Account
Savings account is one of the popular method of saving cash in the bank, but most times this doesn’t help at all as you might end up withdrawing the money.
If you want to save money through your savings account try not to have your atm card with you. Atm card will make you find it easier to withdraw money at any given time.
2. Piggy Bank
This might sound weird to you but piggy bank really work. You can call it old school but if you but much interest in this type of money saving you will be amazed at the amount that you have saved in a year or 6 months.
To start saving money on a piggy bank, you can create a box like object with a tiny hole that you will be putting money inside(the box must be a wooden box). Make up your mind the amount you want to put inside the box and every day insert the money into the box. Or better still every monthly payment of your salary take out the percentage you want and insert it into your piggy bank.
At the end of the year or your desired time, break the wooden box(piggy bank) and calculate the amount that you have saved so far.
3. Fixed Deposit or Recurring Deposit
This two methods of saving money are very similar in nature. Fixed deposit is a financial instrument provided by banks which provides investors a higher rate of interest than a regular savings account, until the given maturity date. In fixed deposit, you cannot withdraw your cash till the stipulated time reaches and it usually comes with a high interest rate. Recurring deposit is seen more in Indian banks which is a special kind of Term Deposit offered by banks in India which help people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.
If the methods didn’t impress you, then you can indulge in a monthly contribution on your work place. Many company or work place usually indulge in such method of saving money. For example, immediately you receive you salary you will take out the amount you said you want to save and give it to the person in charge of it.
Usually by the end of the year, the money contributed will be shared to each person involved. This is really popular in Nigeria schools or i will say government owned company’s.
This is where i will end it on how to save money from salary every month, please if you have any to contribute to this post we will appreciate it a lot.