Money Saving Tips

How to Save Money from Your Salary

How to Save Money from Your Salary
Written by Irina Vasilescu

When it comes to saving money, how many tips have you heard from your mom, your aunt, your high school teacher or that overly friendly clerk in your office? Although you might find some hidden gems in the advice of these folks, your success in saving money would still depend on how you are monitoring your spending.

If you’re the type who is living on a paycheck-to-paycheck basis, don’t worry because millions of other Americans are on the same path. But just because others are doing it does not mean that you have to follow suit. There are actually plenty of ways that you can save money from your salary so that you can have something saved up for the future.

In the following sections, we will be dishing out tips on how you can save money from your monthly salary. We’ll also take a quick look at how you can change the way you think about money so that you can have a healthier outlook towards your finances.

Have You Ever Considered Changing the Way You Think About Money?

If you would like to succeed in saving money from your salary, you need to have a better outlook about your finances first. In the book “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry”, author Helaine Olen maintains that the financial industry has long been selling an impossible dream for a lot of people.

Olen’s basic argument in the book is that personal finance is something of a misnomer. With the costs of healthcare, education and basic necessities increasing on a regular basis, financial empowerment almost cannot be achieved. This is especially true if you combine the scenario with non-secure jobs.

She also busts some of the still persistent myths that plague the financial industry including the following:

  • Luxury spending is responsible for your financial problems.
    Olen says that this is not true at all. Buying small luxury items should not make you feel guilty at all because it is not the be-all and end-all of your financial picture. There are many other factors that contribute to the way that most people live on a paycheck-to-paycheck basis.
  • Everyone can save up for retirement.
    Despite the presence of 401 (k) and similar retirement plans, not everyone can actually afford to contribute to it.

In the end, the author imparts that it is crucial for people to educate themselves about the industry of financial services. If you must look for financial advice, make sure that it is from someone who is credible in the first place. The shame behind talking about money should also be eliminated. It’s a real issue that needs to be discussed, otherwise you might fall into the trap of financial ruin.

More importantly, she says that it is perfectly fine to relax a bit. In the course of writing the book, the author shares that it has changed how she thinks about money.

I think about it more in terms of what I really want. I don’t spend any less, but what I spend, I enjoy more.

This quote best describes what you should be doing, too, if you would like to enjoy your earnings without feeling guilty about it.

You can indulge in a few luxury items here and there, but doing so is not the root cause of any financial problems that you may have. The key is to enjoy what can afford to spend while still looking for other areas where you can pinch pennies.

How to Save Money from Your Monthly Salary

Next, what are the specific ways that you can save money from your monthly salary? Take a look at the following tips:

1. Decide how much you’d like to save

Have you heard about the 50/20/30 rule? According to, this rule applies to personal or household budgeting. No more than 50% of your income should go to essential expenses. The other 20% should be allotted for financial priorities, while the 30% goes to lifestyle choices.

The 20% includes savings contributions, retirement contributions and debts repayment. Other financial experts suggest allotting all 25% of your take-home pay for savings.

The final percentage depends on your personal preferences, but you should also take your budget into account. But whether it’s 20% or 25% of your monthly salary that you end up saving, what’s important is that you do have an amount saved up.

If you’re a compulsive shopper and you don’t have the self-discipline to save up a certain amount of money, force yourself to do it by setting up an auto debit arrangement with your bank.

2. Structure your life in order to save more money

Are you in your 20s, 30s, 40s or 50s? Those who are in their twenties might still be struggling to pay off their student loans and credit card debts. No matter what your age is, you can structure your life to save more money by knowing exactly where each dollar goes. Maintain a basic budget, pay off your debts and cut back on expenses wherever you can.

3. Monitor the ins and outs of your expenses

If you’re not the type to create a monthly budget, now is as good a time to start as any. Monitoring the ins and outs of your expenses will tell you exactly where your money goes. If you see a specific area where it seems as if you’re paying too much, you can make adjustments or totally eliminate the expense and use it to save money instead.

4. Work on increasing the amount you are saving each month

If you are setting aside $50 every time you receive your paycheck, you can consciously increase the amount by increments of five, ten, fifteen or even twenty. This will go a long way towards achieving your goal of setting aside 20 to 25% of your take home pay.

5. Pay up your debts instead of acquiring more lines of credit

One of the biggest enemies of those who wish to gain full control of their financial lives is credit card debts. This is especially true for those who are in their twenties or thirties, who are still at that stage when they are supposed to be enjoying the ultimate financial freedom.

If you don’t watch your credit card spending, you might find yourself allotting a major percentage of your budget towards debts repayment.

This would not help your goal at all to save money, so pay up your debts right now and do not acquire any more lines of credit. Perhaps leaving just one or two credit cards for important emergency expenses or the occasional luxury expenses would do.

6. Look for ways to reduce your expenses

Do you really need that landline phone? How about your Netflix subscription or your magazine subscription? When crafting your monthly budget, check which aspects you can cut back on or maybe completely remove from the list. Even a few dollars of savings every month will add up to a lot when you consider one year’s worth of the expense.

7. Ask for insurance policy discounts

Insurance policies give you that financial security you need during emergency situations. This means that your car, home and health insurance policies are things that you cannot do without. With such items that take a huge chunk off your monthly bills, how can you actually save money?

If you are buying all your insurance plans from the same provider, you might be qualified for a discount. Review your policies every year so that you can look for cheaper plans, but without sacrificing the comprehensiveness of the coverage.

8. Have a clear set of financial goals

What are you saving money for in the first place? Are you saving up for your child’s college expenses? Are you planning to tour the world during retirement? Or maybe there’s a designer bag that you’ve been eyeing for a long time at the store? These are short-term and long-term financial goals that you should clearly outline.

Once you have set aside enough money from your monthly salary to create a proper emergency fund, name it so you would know exactly where the funds are going.

9. Hold off on large purchases

Are you thinking about replacing your regular TV set in the living room with a larger, more high-tech one? Just because you can afford it does not necessarily mean that you should buy it.

When you’re tempted to buy big-ticket items, check on the prices at different stores first. Sleep on it and by the next morning, you might realize that you don’t really need the item, after all.

10. Look for additional income sources

Finally, the best way to save money from your salary is to augment your income. Look for additional ways to earn and save money so that you can add the amount to your rainy days fund.

Saving money, especially if you have an average salary, may prove to be a challenge. But by sticking to a budget and looking for ways to cut back on your monthly expenses, you are bound to succeed in saving up funds for emergency situations, luxury items or what’s simply known as the future.

About the author

Irina Vasilescu

Irina Vasilescu is our money-saving and DIY expert and also the editor-in-chief as she's always on the lookout for the latest online deals.


  • The best way to save money from your salary is to earn more money!

    Lets face it, it is hard to cut back on things that you’re used to and things that you enjoy. Well, I found it hard anyway.

    The best way is to look for promotion at work, do overtime, or look for a second job.

    Everything else in the article is great, but working harder worked for me.

    • I also find it hard to cut back on things I enjoy. Your suggestions about promotions and overtime are great for many people, but it really depends on what type of industry you are in and how you are paid. Unfortunately for me, I work in education, and while I definitely put in overtime hours, I don’t receive any over time pay no matter what. A second job is not always feasible for people either. I think the purpose of this article is to help people save money without necessarily increasing income.

    • Agreed. The more money you make the more money you can save and at the same time spend. I use to have 3 jobs before. 2 part time jobs both taking off 4 days out of my week and for my third job I had to work Saturdays and Sundays. it’s a lot of work but now I’ve had more money to spend and save even if I go jobless for a year.

      • I have one job right now and I am starting a second job soon. I’m trying to pay back student loans so all my income from my second job will go to that. If I can, I’m planning to pick up a third job sometime in the future. I want to save as much as I can and pay down my debt as fast as I can.

        The more money you make the more you can save is really good advice. I think everyone should think about that. It’s hard to save $500 a month when you can only save $300 with your current salary.

  • I agree that holding off on larger purchases is a great way to manage your salary. Besides being able to sleep on it to decide if you even need it to begin with, it also helps to hold off because you never know when you’ll run into a sale.

    • Yeah I really love that one also. It’s always been told to me that before I purchase something big even if it’s useful to you at the moment you really have to consider a lot of things.

  • I really appreciate how this article lays out that there are many types of financial goals. Saving money from my salary is something I realized recently I wanted to do more of as I want to be able to change jobs in a year or two, but I don’t want to risk not having an emergency fund to rely on. There are many good tips that I want to sit down with my husband and try out. I always want us to be on the same page financially.

  • Thanks for this! Really helpful. I was bad at money before and most of the time whenever I get my salary I tend to spnd it all in one go which is really bad. But I decided to change my mindset. Instead of saying “Hey I got my salary, I have money now let’s spend!” I changed it into something like “Oh I have money now, but this wouldn’t last for long I must save as much as possible” That simple reprogramming along gave me my financial freedom.

    Also it helps a lot to have multiple sources of income, even if it’s a $5 a day venture online or another part time job at night it pays to have some extra money to spend. If you can afford another job just do it.

    • I am working on this too. I used to spend, spend, spend and now I realize that I should have saved, saved, saved. I am working to change my mindset but it can be hard. I try to save some money every week and I think I am doing good at this point. An additional source of income is something that I am working on as well. I am starting a second job soon, and I am putting all those earnings into a separate savings account. It’s only a part-time job, but I hope to get about $5,000.00 saved in about a year. I just have to make sure that I don’t dip into the account.

  • Thanks for the nice tips. I used to struggle with saving a percentage of my salary by myself so I set up an arrangement with my bank to auto-debit my account every month and it’s working. I find myself saving regularly.

  • Definitely good information to consider. People who work salary often have a harder time saving than most because they have longer stretches in between pay periods and are often not allowed any way to make a little extra on their check through overtime. Thank for sharing.

  • Nice tips. I struggle with saving money. I do not have excessive spending habits, actually I hardly spend on things I don’t really need. But, I do believe I am under paid for the amount of stressful work I do. I am always in the job market looking for a better opportunity. Maybe then, I can apply some of these tips to my salary. Meanwhile, I think 80% of my salary is spent on rent, bills, and food! Thanks for the awesome tips.

  • I’ve found the best and easiest way to save money is to have it deducted from your salary and invested automatically. If you never see the money, you can’t spend it. It’s surprising how much money we spend mindlessly, simply because we have access to it. But if we never see the money, we don’t miss it. I also agree with you on large expenses (and even smaller ones). Hold off as long as you can, a lot of times purchases are spur of the moment, and the longer we have to think about them, and realize the true cost of them, we realize we can do without them. Also, asking about discounts are helpful, not just with insurance, but with other expenses too. It never hurts to ask – my husband talked with our satellite TV company and they gave us $20 off a month for six months. It may not seem like much, but it all adds up. Just remember, if you do get a discount, put that money in the bank (or invest it), don’t just put it in your pocket to spend on something else! Another way to “save” is by adding a little to your mortgage payment every month, we round our mortgage up to the nearest $100. It’s only about $40 a month, but it helps to pay off your mortgage faster and increases the equity in your home.

  • Saving money from your salary is very important if you want to be able to make plans for the future, so this article is very helpful. One key point that you have made is that you need to monitor everything that goes in and out of your account. This is very true, and you would be shocked at the number of people who are making payments that they’re not aware of – sometimes insurance for appliances that they don’t even have anymore. So they should certainly be thinking of ways to cut down on spending, and this means that they may be able to save more for the future, which can only be a good thing.

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