How to Save Money From Salary Without Sacrificing Your Lifestyle

The post How to Save Money From Salary Without Sacrificing Your Lifestyle appeared first on Penny Pinchin' Mom.

Learning how to save money from your salary without sacrificing your lifestyle is a skill worthy of an entire course subject in the most prestigious of schools.

Yes, that’s how little most people know about saving from their salaries. We are talking, what, 10%? 20%? Or maybe just as much as you can when you can? How much of your salary should you save?

And what do you need to do each month? What about when your bills are simply pulling you under? Should you just pretend that you don’t have savings and increase your debt?

The truth is, there are some things you can’t control. Things like taxes and the fact that groceries cost about 9% more now than they did last year. While you can control where and how you shop, you can’t control the need to eat.

Your bills are going to be there, and you can’t simply not save money because you have to pay bills. What you can do is control how much of your money you spend on bills in any given month and how much of it you save for your long-term financial planning and security.

Also See: How to Budget Money on a Low Income

How Much of Your Salary Should You Save?

The 50-30-20 rule is a rule of thumb when it comes to knowing how much of your salary you should save. It goes:

50% of your salary should go to your expenses and needs 30% should go towards what you want (a new car, a vacation, and all that) 20% should go towards your savings plan

So, using this rule, 20% of everything you earn should go toward savings. However, this rule doesn’t apply to everyone. That’s why there is a myriad of rules, such as the 80-20 rule, which states that 80% of your salary should go towards your needs and 20% towards savings.

The general idea is that 20% of your salary or paycheck is a good amount to channel toward your savings plan.

Now, this is what you need to do: think about how much you make and how much you spend on needs, living expenses, and not-so-necessary things, then take away 20% of all that per month and see if your lifestyle will take too much of a hit.

If you think about it critically, chances are it won’t. Of course, there’ll be some adjustments you have to make, but you won’t suddenly become destitute because you don’t have 20% of your paycheck to spend on a non essential expense.

Also See: Clever Ways to Save Money

Tips on How to Save Money From Your Salary Without Drastically Changing Your Lifestyle

The trick I’ve found that works is to find ways to balance things out. Here, let me show you:

Say, for example, that your family is used to a certain high-end brand of cereal, but your analysis has shown that it’s too expensive and should be part of the things you cut out of your monthly budget to shore up that 20%. Yet, your kids simply can’t stand the store brands. So, what do you do?

I coupon and hunt for deals like a mad woman! I look for coupons and deals that are specific to the brand my family likes, and then I buy in bulk. That way, I’m saving money without downgrading their lifestyle.

Buy What Is Worth It

“By definition, saving – for anything – requires us to not get things now so that we can get bigger ones later.” — Jean Chatzky

Let’s face it: you probably have a dress or ten in your closet that you never wear, yet you bought it because you thought it was cute. I’m not judging; I’m the same way.

Most of the things we buy we don’t need; we want them. They are a non-essential expense. Try implementing the 24-hour rule. If you see something that isn’t a necessity or entirely integral to your existence, instead of buying it on the spot, wait 24 hours.

See if you still want it as much as you did at that moment. There’s a good chance that you won’t care about it so much tomorrow.

Pro Tip: Take the money you would have spent on that item and squirrel it away. You can even add it to your emergency savings fund. You’ll grow your nest egg faster this way, and you’ll condition yourself to be a bit more frugal.

Dine In

This is a tricky one because not everyone likes to do the chores that come with dining at home. But think about how much you would be saving in terms of transport, drinks, food, entertainment, and the potential bail money should things get out of hand.

If your lifestyle involves hanging out with your friends, you could choose to do a pot-luck hangout. Maybe a game night, a movie, or even giving each other cooking lessons over some Tequila? No? I’m sure many of your friends would appreciate the cozy home setting as well as the affordability of it all.

Of course, once in a while, you guys can paint the town red, but not every weekend. My family chooses to eat out once per week, for example. It is something the kids (and myself) look forward to after a long week of work and school.

Use In-Network ATMs

Did you know that you could be losing as much as $5.00 per transaction every time you use an out-of-network ATM? Imagine that! Have a look at your monthly statement and tell me how often you use an ATM.

Why not use an in-network ATM instead? It’s cheaper, and it still gives you the same kind of money you need. Using an in-network ATM instead of an out-of-network ATM hardly changes your lifestyle.

Of course, you might have to put some forethought into when and where you can withdraw cash, but that’s about it. By avoiding out-of-network fees, you will be saving a bundle by the end of the month.

Use Your Savings to Make Money

While most banks do offer some interest earnings on your savings, there are better places to put that money with high interest rates. Consider going for a certificate of deposit, a high-yield savings account, or a money market fund. Either way, you can make your savings account earn you money in the long run.

If you learn how to save money from your monthly salary in a smart way, you don’t have to drastically diminish your lifestyle expenses to achieve your financial goals.

However, you will need to constantly learn about money management and adapt when needed, like if there is an unexpected expense or higher than usual spending. Find better ways to cut back on costs and reach your savings goal, as well as find better ways to make your money earn you more money.

The post How to Save Money From Salary Without Sacrificing Your Lifestyle appeared first on Penny Pinchin' Mom.