How To Save Money From Your Monthly Salary

Do you end up having no money at the end of the month?
Do you always end up spending unnecessarily and regret it later?
Do you feel like no matter how many appraisals you get, you can never save money?

Well, you are in the right place then. We are going to tell you how you can change all that in 6 magical steps! Umm… wait. Did we say magical? Oh! We meant 6 practical steps on how to save money from your monthly salary.

Step 1: Keep a track of your finances

As soon as you start earning, the first thing you should do is keep a track of the inflow and outflow of money. It can get very tempting to just spend as and when you wish and not care about where you have spent your money.
Firstly, make a note of the amount that is being credited to your account every month. Next, note down every expense that you make and divide it into 2 categories — fixed and variable. Under the fixed expense category you can put rent, bills, basic groceries, etc. Under the variable category, you can add purchases that aren’t going to recur every month such as eating out, vacations, etc.

#MojoTip: If you don’t have the patience to make a note of every transaction you make, note down the cash you withdraw for all the times you pay by cash and for online transactions, you can check your bank statement at the end of the month.

Step 2: Make a budget

After identifying and listing out the expenses for the month, highlight the ones that could’ve been avoided or the unnecessary expenses you made. For example, if you have just moved to a new city and you need to set up your new home, opt for furniture and appliances on rent rather than buying them. You can rent them from
Now, use this to calculate the amount that you can end up saving every month.

Savings = Income – (Regular expenses + Unnecessary/avoidable expenses)

This should typically come up to 30% of your income. If it is more than 30%, you’re doing great! Extra savings will be a bonus. If it is less than 30%, see how you can reduce your expenses a little more. And, if it is nowhere close to 30%, you need to make bigger changes and adapt to a lifestyle that lets you save more.

Step 3: Pay off debts, if any

Now that you have a realistic budget, use a certain percentage, say 5%, of your savings to pay off your debts. Increase your debt payments and try to get lower interest rates. These debts can be EMIs, loans, credit card bills, etc.

Step 4: Start an emergency fund

After allotting a small percentage of your savings to clear off your debts, it’s time to create an emergency fund. Another 5% of your savings need to go to the emergency fund. This will be the amount that you’ll set aside every month and not touch it unless it’s an emergency. This will help back you up when you are in a bad situation financially.

how to save money from your monthly salary
Step 5: Savings

Let’s get to the main part…savings.
After deducting the expenses, debt amounts, and emergency fund from your income, the amount remaining is what is going to be your actual savings. If there is an emergency, you will fall back and use your emergency fund but try not to use your savings. Your savings should be close to 20% of your income.
Now that you know the exact amount you can comfortably save every month, transfer this amount to your savings account as soon as your salary is credited.

#MojoTip: You can categorize your savings to have more clarity. You can save some for your retirement as well ‘cause it’s never too early to start saving for your twilight years. If you are planning a vacation, you can plan to save for that separately. This way, you’ll not have to dive into your main savings for things like vacations or buying something that’s slightly on the expensive side.

Step #6: Invest

Last and final step is to start investing. To know where you can invest in the initial stages of your career, you can check out this blog — 5 Best Investment Options For Millennials.


Making a budget, savings, investments can seem too complicated to understand but it is not. It is the best thing you can do to secure your future. They say that life is short and you shouldn’t worry too much about the future but it’s always better to be prepared to deal with tough situations. So go on, have fun but also, don’t forget to set aside a good chunk of money in your savings account.


  1. Every month we all are spending our money for our daily expenses. Many times we can’t save anything from our salary. But saving is very necessary and this tips are very useful to save money. I will surely try this tips and will share this blog with my team.

  2. That’s nice I don’t know but I also use these algorithms with my salary before credited my salary I set up all my expences (like send money to home for my parents, 2 EMIs, etc.) I actually saving good amount.
    This blog post increase my self contribution within my self.
    Great thanks

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