Are you getting handsome salary , still you are struggling to save money?

For start saving you need more and more money to earn?

How much you can save, is there any formula!!

What will be the impact , if you won’t save the money?

You will get answer for all the above questions in this post with excellent tactics to save money and generate wealth.

If you are earning more than 4lacs / annum , then you are a above average person in terms of salary. In India average salary is  ₹3,87,500 per year according to Jobted.

You are earning 4 lacs or more then you are in the good position to save more money. If you income range is less than 4 lacs than also it won’t affect your wealth creation, you can easily save handsome money in it.

So to save money or  to start your wealth creation, no need of earn more or you don’t want to start saving with more money also.

Understanding personal finance can keep you out of trouble click here to explore more about it.

Save money on each month

Don’t see saving habit as occasional or one time habit . It should be part of your life , if you are getting salary monthly your saving also should be month wise.

If you plan is like you will save once you will get big bonus or big amount in any form , then it won’t work out, if you cannot able to plan and save monthly , saving that big amount also won’t work out.

You need to decide How much money you are going to save each month. There is no thumb rule for it , but my suggestion is save at least 10% of your income. remaining 90% any ways we need to spend on needs and wants.

Initially I started with 10% , because I was in debt while I start the saving habit, but still I decide to save at least 10% to test How it works!!.  I decided to keep this amount for saving and aligned my budget with 90% for all other needs.

If in case , you are in more debt or you cannot afford to save 10% , at least start with 5%. Here percentage does not matter , the important thing is to bring saving habit in your life.

With out having any percentage in mind blindly you do things , you cannot bring real picture in your mind and you cannot save anything end of the month.

Same way don’t restrict your saving with any percentage, it can go up to 70% also at some point of time. Saving is an art and not an math, the more you will practice , more you will master in it.

Even %  is related to math, it is an medium through which you will start the saving habit.

Save before you spend

Once percentage is decided then keep the money separately. What ever remaining percentage  you plan to spend , you are free to spend that amount, but saved amount should not be included in your budget for spending at any cost.

If you follow classical way of saving. i.e. you are planning to save money which is left at end of the month, then sorry my dear friend than in your whole life you cannot able to save single penny also.

As we know end of the month most of the time you will run out of money and end up borrowing from some one or using credit card.

Why  month end amount scarcity is coming? Altogether this is another topic- Budget. You will get this info in another blog post. As of now the percent you decide to save should be kept separately once after salary credited.

“Do not Save What is left after spending, but spend What is left after Saving” – Warren Buffet

This rule is also called “pay yourself first”. If you fail to apply this rule in life, you need to work till your death. If you are not paying yourself first , who else will do this for you.

All the money you are earning is not actually yours, end of the day how much you are saving is yours. Because no one cares about the amount you spend, how much remains with you as saving  is matter in your life.

Don’t consider things you bought in EMI i.e. asset and car is your saving. These are not going to help you during your emergency

Have separate account for savings

Once after decided How much you are going to save each month and decide to keep your saving separately once after salary credits , follow this important step. Create a new bank account to keep your saving, don’t keep it in salary account.

In fact have 3 accounts

• Salary Account
• Spent it Account
• Save it Account

This techniques helped me a lot to start saving in cleaner way .If you keep money in separate account for saving purpose, your mind will think twice before spending and automatically we won’t include this for our expense.

Instead of that if you keep all money in your salary account , it is difficult to track your expense and savings and end of the month nothing remains here.

Don’t hesitate to open 3 accounts, most of the banks demands minimum balance that is nominal cost anyway. It will be around 500 to 1k in govt sector banks where as salary account will be zero balance account in private and govt sector banks.

Take step you will see the difference , I won’t insist you that don’t have internet banking or debit card for save it account. It is up to you to have it , but don’t ever plan to spend this saved amount with out any necessity. We will cover why we need to save money later in this article.

Consider the day you joined the job with less salary and managed your life with that small money, but after few years your salary increased , but your problem of saving money still exist.

You upgraded your life style, once you got more salary. But again saving instinct will be there but disappears as time passes due to poor planning.

Increment your saving

If you are getting 10 percent increment , then plan to increment 10% of savings as well.

For example , you take home salary is 50k and you are saving each month 5k. You  are getting increment From 50k to 55k then increase your saving by 5.5 k. In this way your saving also will increase instead of only your life style expense increasing. The percentage also small so your spending EGO won’t hurt here.

Save more by spending less

This is another trick to save money. How saving is well planned and separated from your income the same way plan your spending and allocate budget on it and stick to the budget.

I know it is easy to say to do budget, but in reality it boring. It is difficult to track our expense daily. But you can do this by simple way by using mobile app instead of excel sheet.

Divide the expense in the following category.

Needs 

Allot the money for each things and keep total for needs.

• Home rent,
• bills,
• school fees,
• groceries,
• transports and fuels,
• Veggies,
• Dress
• Non Veggies,
• Fruits,
• Health,
• 10 benefits of saving money.

Wants

• Entertainment
• EMI
• Gadget purchase
• Travelling
• Dining out
• Shopping and few more things will come here

Once you will note down above 2 categories, budget your amount. 1st  month of your budget will alter here and there , but after few months you can be able to figure it out How much you need to allocate to each parts.

Here needs cannot be altered but wants can be manipulated by you. If you feel you want to save more, this is the area Where you need to control your greed.

But before touching the wants part complete the above 3 steps consistency , save first and separate it rules. So that your mind can see the result , once your mind convinced with result it will do favors for your next step.

Your mind will do the same process for each and everything in life. Consider fitness, once you can see result in your body , your mind overwhelmed with the result. So it will try to obey your order next time.

Protection

During jobless or health issue and other unprecedented situations can vanish your saving. So while allotting budget keep life insurance, health insurance policies premium amount and emergency fund in mind.

This protection related fund should be part spend it and don’t include in in save it. We will see protect your saving as separate article , but as of now keep these fund also in mind while allocating the budget.

Benefits of saving money

• Gives Financial freedom
• Helps during emergency
• Create confidents in your personal self
• Prepares you for worry free retirement
• Helps to close debt etc..

You will stand out of crowd for sure by saving, because when it comes to personal finance ,saving is the first part , but most of the pupil fails here. Wealthy pupil in world became wealthier not because of their earning, but because of their savings. Start early, if you won’t start now after 10 years also you will be in the position where you are now.

Start early to get benefit of compounding. Start now and have a good kick start on your wealth creation journey.

I hope your obstacle’s  on saving cleared with this article , let me know it in comment.