Saving money is one of the most important steps to achieve financial freedom. No matter if you earn ₹20,000 or ₹1 lakh per month, what really matters is how much of your salary you actually save. It’s not about being tight-fisted – it’s about using your money wisely.
Let’s break-down in simple steps how to save money from salary every month, how much you should try to save, easy tips to budget better, and the best free budgeting apps that can help you manage your money more easily.
Why Saving From Your Salary Matters
Your salary is the money you earn every month from your job. It helps you pay for your daily needs like food, rent, bills, and transport. But if you spend all of it and don’t save money, you might face big problems later.
Saving money from your salary, even a small amount every month, can make a big difference in your life. Here’s how it helps:
- You are prepared for emergencies: Life is full of surprises – medical bills, job loss, or car repairs can happen anytime. Saving money gives a safety net, so you don’t panic or borrow money when something unexpected happens.
- You grow your money over time: When you save regularly, your money adds up. If you also invest it smartly, your savings can grow faster and help you build wealth for the future.
- You avoid debt: If you don’t have savings, you may need to use credit cards or take loans. This leads to interest and more stress. Saving helps you stay away from unnecessary borrowing.
- You reach your goals: Whether you want to buy a house, start a business, go on a vacation, or retire peacefully – saving from your salary helps you get there step by step.
In short, when you save money from your salary every month, you get peace of mind. You feel more in control of your life and ready for whatever comes your way.
How Much Money Should Be Saved From Your Salary?
A simple and popular rule to manage your salary is the 50-30-20 rule, which is easy to follow and used by many financial experts.
- 50% of your salary should be spent on needs – these are things you must pay for every month like house rent, food, electricity, and phone bills.
- 30% of your salary can be spent on wants – things you enjoy but don’t really need, like online shopping, dining out, or going to the movies.
- 20% of your salary should be saved – this money should be kept aside for future goals, emergencies, or investments.
For example, if your monthly salary is ₹30,000, then:
- ₹15,000 goes to needs
- ₹9,000 goes to wants
- ₹6,000 should be saved every month
This rule is a good starting point. You can change the percentages based on your expenses, but try to save at least 15% to 30% of your salary regularly.
Step-by-Step Guide: How To Save Money From Salary Every Month
Struggling to save money from your salary every month? You’re not alone. With a smart plan and simple tools, anyone can learn how to budget and save money. Follow these easy guides to manage your income better and build your savings step by step.
1. Track Your Expenses
Before you can save, you need to know where your money goes. Start by tracking all your daily and monthly expenses – rent, groceries, utility bills, travel, and even small things like snacks or chai.
You can track your expenses with the help of these apps to help you save money:
- Walnut – It tracks expenses automatically through SMS
- Money Manager – It lets you manually record every expense
- Spendee – It helps you see where your money is going with eye catching visuals
Tracking helps you understand your spending habits and gives a clear picture of how much money should be saved from salary.
2. Create a Monthly Budget
Make a monthly budget at the beginning of each month. Write down your total income and list all your expenses. This helps you decide how much to spend, and more importantly, how much to save from salary.
Your budget should include:
- Fixed costs like rent, EMI, insurance premiums
- Variable costs like groceries, fuel, entertainment
- A saving goal, which helps you decide how much you want to save
- Money for an emergency fund
Always stick to this budget as much as possible. Knowing how to budget and save money is the first step towards financial stability.
3. Set a Saving Goal
Saving is much easier when you know what you’re saving for. Setting goals gives you direction and motivation.
Examples:
- Emergency Fund: Save 3–6 months of expenses
- Trip or vacation savings
- Down payment for a car or house
- Retirement fund and make sure to start early
Once your goals are clear, you can calculate how much to save money from salary every month to reach your goals.
4. Automate Your Savings
Don’t depend on your memory or willpower – automate your savings so that it happens without effort. Here are some simple ways to automate your saving:
- Set up auto-debit from your salary account to a
- Start a SIP (Systematic Investment Plan) for mutual fund investment
- Use apps like Groww or ET Money, which are great apps to help you save money
Automating ensures your savings are done before you get tempted to spend.
5. Cut Unnecessary Spending
Look closely at where your money is going and remove things that don’t add real value in your life. You can cut back on:
- Subscriptions you don’t use like streaming services, magazines, etc.
- Impulse shopping, especially online deals
- Eating out too often
- Premium services that you rarely use
Redirect that money into your savings account, because even small cuts can make a big difference over time.
6. Use Best Free Budgeting Apps
Managing your money gets easier with the right tools. These best free budgeting apps in India help you plan, track, and stay consistent. Here are some of the top choices you can choose:
- Walnut – Smart expense tracking from SMS
- Money View – It combines budgeting, expense tracking, and credit score monitoring
- Goodbudget – It uses the envelop method for smart spending
- Spendee – It is easy to use with clear and catchy visuals
- Monefy – It is great pick for quick and colorful tracking
These apps to help you save money make managing your money less stressful and more fun.
7. Build an Emergency Fund
An emergency fund is the money you kept aside for sudden needs like a medical emergency, job loss, or urgent repairs.
While building an emergency fund, aim to save at least 3 to 6 months of your monthly expenses in this fund. Keep it safe in a place where you can access easily like:
- A regular saving account
- A liquid mutual fund
Before you start investing or spending on extras, make sure your emergency fund is ready.
8. Invest Wisely
Saving money from salary every month is important, but investing helps your money grow faster over time. It helps you beat inflation and build wealth.
Start small, even a small investment of ₹500 or ₹1,000 per month is enough to grow your money over time with good returns. Here are some popular and safe options to invest wisely:
- Mutual Funds through SIPs
- PPF (Public Provident Fund)
- Bank Fixed Deposits
- Equity shares for long-term goals
Learning how to budget and save money is the start and learning to invest your money wisely makes your savings grow and work for you over time.
9. Review and Adjust Regularly
Your salary, expenses, and goals can change over time. That’s why it’s important to check your budget every month.
Ask yourself:
- Are you sticking to your plan?
- Are you saving enough?
- Are your investments growing?
Update your plan if needed. This habit keeps your finances on track and helps you figure out how much money should be saved from salary every month based on your current situation.
10. Avoid Lifestyle Inflation
When your salary increases, don’t increase your spending too much, it’s tempting, but it can slow your savings.
For Example:
If you get a salary hike of ₹5,000, increase your monthly savings by ₹3,000 instead of spending it all. You can also increase your monthly investment plans, which grow well over time.
This way, your savings grow faster and you stay ahead financially.
Conclusion
The secret to saving money from salary every month is not about earning lakhs. Even if you earn less, you can save if you are consistent. Start with a small amount – even ₹100 a day or ₹1,000 a month and make it a habit. Over time, your savings will grow, and your financial health will improve.
Use technology like budgeting apps or automatic transfer to help you stay on track. Avoid unnecessary spending on things you don’t really need.
Remember: The earlier you start, the more time your money has to grow, and the better your future will be.
FAQs
How much should I save from my salary each month?
Try to save at least 20% of your salary every month. If your income is low or your expenses are high, start with a smaller amount and increase it slowly as your salary grows.
What are the best apps to help save money in India?
Some good apps to help save money and track spending are: Walnut, Spendee, Money View, Monefy, and Goodbudget. They are free and easy to use.
Is saving ₹5,000 per month enough?
Yes, saving ₹5,000 per month is a great start. If you stay consistent and increase the amount later, it can grow into a big amount over time.
Should I invest before building an emergency fund?
No. Before you invest, first build an emergency fund with 3 to 6 months worth of your expenses. This fund helps you stay safe during tough times like job loss or medical emergencies.
How can I save money if my salary is low?
If your salary is low, start by writing down where your money goes. Cut down on things you don’t really need, set small savings goals, and try to save a little every month. Even saving ₹100 regularly is better than nothing. Discipline is more important than the amount.