How To Save Money From A Small Salary – 2022 Guide

Are you worried about how to save money from a small salary? Are you struggling to reach your financial goals and keep hitting a wall?

It is completely understandable if you are stressed. Since you are here, it means that you want some simple solutions on how to save money from a small salary. 

Do not worry. You will be treated to a wide range of savings techniques!

It may surprise you to find that it is completely possible to achieve your financial goals even with a low income.

All you need is a clear mind, set your goals, and strictly follow the strategies that are shared below.

Happy reading (and saving)!

How To Save Money From A Small Salary


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Related Posts On Saving Money:

1. Prepare A Budget

how to save from your monthly salary

Before you start saving, you need to understand the basics of a budget. Budgeting is a way of keeping track of your expenses, setting your financial goals, and saving money.

You can download a variety of budget templates from Microsoft Office. Start listing down all the necessary expenses you have, monthly income, and calculate a savings proportion that you can live with.

However, please take note that it is easy to prepare a budget. Sticking to it is the hard part, but as you keep reading, you will find more steps to help you how to save your money from your salary.

If you want to get creative with your budget, check out this list of 10 Best Budget Planners to take control of your finances now. 

2. Prepare A Monthly Expenses Tracker

how to save money from a small salary

A monthly expenses tracker is quite similar to a budget with one key difference. A budget is used to plan your expenses before you spend them. An expense tracker shows you where you spent your money.

In a perfect world, your monthly expense tracker will be completely in sync with your monthly budget. That means you spent your money exactly as you planned it. This is how you save money from your salary.

You can download monthly expense tracker templates. There are also plenty of online apps you can download and use on your phone and learn how to save salary money.

These online monthly expense trackers can be linked to your bank account and will automatically list down your expenses and update you on how much you are allowed to spend for the month.

The main benefit of having an expense tracker is that you can see where you are overspending and directly address that expense to see how it can be reduced.

You will also stop asking yourself, “where did all my money go?”

3. Prepare An Emergency Fund

An emergency fund refers to funds that are set aside for highly urgent and expenses. Please take note that an emergency fund is not a savings fund.

It can be used for  any of the following:

  • Medical Bills for severe illnesses or accidents
  • Loss of job
  • Large and unexpected home repairs e.g. natural disaster damage to property
  • Death or severe illness for family members

Hence, expenses such as shopping, discounts, sales, holidays are not supposed to be funded by the emergency fund.

If you lose your job, then your emergency fund is meant to cover all NECESSARY EXPENSES ONLY. You should not be eating takeout and going to the movies during this time.

As a rule of thumb, it is wise to maintain at least 6 months of emergency funds

If you are feeling overwhelmed, please take a deep breath! Nobody expects you to maintain this large figure so quickly! 

You need to calculate how much you need, and then break it down into your monthly budget so that you are contributing to that fund every month. This is a great way to save money from salary. 

Use this free online Emergency Fund Calculator to get started.

4. Reduce Accommodation Expenses

how to save money from my salary

Is a large portion of your salary going for accommodation expenses? If yes, maybe it is time to revisit that so you can start saving from salary.

Here are some ways you can reduce your accommodation expenses:

1) Rent Out Extra Rooms Or List It On Airbnb

Do take note, that sometimes having that fancy study or gaming room is taking away extra income that could enter your pocket. Renting it out will earn you some quick bucks.

2) Refinance Your Housing Loan

If you own your house and your interest from your mortgage alone is eating away at you, consider refinancing your housing loan. Chances are that you can get a better loan arrangement now.

3) Move

start saving from salary

If it is at all possible, you can also consider moving into a smaller room or house. Especially if the extra space is underutilized.

If you live in the city, your rental may be much higher just due to the location. 

You may want to move further away to a more remote but cheaper location. Then, request work from home permission to reduce your traveling expenses.

Granted, not everyone may be able to get permission to work from home. The key is to find a way to negotiate this request and highlight how your company will also benefit if you are to work from home.

To help you out, these templates show you how to request work-from-home privileges citing a variety of reasons.

4) Re-negotiate Your Rent

If you are renting and have been a responsible and pleasant tenant, you can consider renegotiating your rental fees. You never know when your pleasant negotiation skills can save you some cash.

If the thought of negotiating is making you sweat. Please do not worry and refer to some of these tips to renegotiate your rent to give you some courage!

5. Find A Secondary Source Of Income

If you are relying solely on your paycheck, you need to pick up a side hustle RIGHT NOW! Do you have extra time after work where you spend it on drinks, hanging out with friends, or just watching television?

If that is the case, you may want to scrap all those habits and immediately start looking at getting jobs that you can do remotely from home. This is such an easy way to show you how to save from your salary.

Luckily for you, you have all the resources you need on how to make extra money right here!  

Start listing down skills you have and see how you can monetize them. The opportunities are endless.

6. Eliminate Debt

save money from salary

You may ask yourself, “how to save money from my salary and still reduce my  debt?”

A better practice is to reduce your debt, especially if it is costing you interest. Interest on credit card debt can usually balloon, especially if you are paying the bare minimum every month.

On the other hand, savings in a bank earns you very little interest. Increasing your savings is the main purpose of this article. However, if you allow your debt to grow as a result, it defeats the purpose.

You may want to prioritize reducing your debt as soon as possible and then focus on building your savings. This is especially so if you still have a bit of savings and a debt with heavy interest accumulation.

7. Avoid Takeouts

There is no escaping this. If you love eating out, do not be surprised if you have very little change left for the month.

Most budget takeout meals cost between $10 to $15. You may have your occasional indulgence meals which can easily cost $20 to $30 a meal. 

When it adds up, your takeout expenses can reach $300 a month which averages out to $10 per day for 30 days

You can easily learn how to save money from each paycheck by simply cooking your meals at home.

Unfortunately, many people prefer takeout as they think that it saves them time and effort in preparing a meal. 

At this point, it is probably useful to remember that the money you pay for takeout has to cover the restaurants’ profits, salaries, rental expenses, and food costs. If you prepare your meal, you only have to pay for the cost of your food.

8. Start Meal Planning & Prepping

how to save your paycheck

Meal planning refers to the practice of planning all your meals. This is usually done for the week. This means that you put time and effort into thinking and planning what you will eat and you just have to follow the plan for the rest of the week.

Meal planning helps you create a structured grocery list and ensures that you have healthy, delicious meals coming out of your kitchen. 

Meal planning helps you:

  • Save Money
  • Create more meals with limited grocery items
  • Have leftovers for the next day

If you live alone, do try out these delicious recipes for 1. If you have a partner, you can refer to this amazing recipes list for 2.

Happy planning!

9. Automate Your Savings Transactions

When you automate your savings allocation every month, it means you do not have to think about putting money aside for savings. 

You do not have to worry about how to save money from your paycheck as it is ALREADY DONE! You can speak to your employer or create a plan within your bank account to enable this. 

See how you can have a portion of your salary which you have allocated for savings, be transferred before it even reaches your account for expenses. By doing this, you do not have to deal with the temptation of spending your savings

Additionally, you will not have to deal with accidentally FORGETTING to save for that month. 

10. Avoid Paid Entertainment, Look For Free Options

how to save money if your salary is small

Are you the type who spends a fair bit of money on entertainment? Do you like to go bowling, cinema or play pool at the club? All these would cost money just to enter for you to have fun.

Why don’t you consider going to the park for a run? Or playing basketball at the community court. 

You can still hang out and have a good time. The only difference is that it does not cost you any money. If you are wondering how to save money from your paycheck? This is how.

You will be surprised by the incredible ideas listed here on 100 free things to do this weekend.

11. Visit The Library

how to save salary money

This point is related to the above and is especially true for book-lovers. If you love to buy or collect books, chances are that they are sitting on your shelf, either not read, or you’ve probably just read it once.

It seems like such a pity especially when you are likely to find those books in the library where you can just borrow them.

Additionally, visiting the library presents an opportunity to meet like-minded people and gain some new friendships. Even better, the list of books that you can read is vast in comparison to how many you can buy. 

Think of all the knowledge you can accumulate for free. This is a great way to learn how to save from your monthly salary.

12. Have A Cash Envelope System

how to save your money from your salary

The Cash Envelope system was created by Dave Ramsey. Once you have created a budget, you can use the cash envelope system to physically place all the cash that you have allocated for each expense.

For example, if you allocate $300 for groceries every month, your envelope will be labeled as Groceries. This system will allow you to only spend $300 for that month on groceries.

Similarly, you can withdraw all your expenses from your paycheck, and physically place wads of cash into separate envelopes that are labeled according to their expenses.

When you see the physical cash in the envelope, you will be more controlled in your spending and will question the necessity of every expense. You will learn how to save money from your salary by practicing this.

Naturally, in today’s digitized world where e-commerce is growing, it may be hard to physically place cash in envelopes. However, you will find that your impulse purchases will be greatly reduced as a result. 

Do give it a try.

13. Reduce Your Banking Fees

how to save money from your monthly salary

Did you know that almost all banks charge some kind of banking fee to open or maintain your bank accounts? These fees can be either one-off or charged monthly.

Some of these charges can be related to not maintaining a minimum balance or overseas cash withdrawal fees. You must get in touch with your bank and see all the types of fees you are charged. 

Get proper advice from them on how you can reduce the fees and ask if some of them can be waived. Sometimes, all it takes is a phone call to remove the monthly fee.

Here are other ways that you can reduce your banking fees. Give them a try if you are looking for ways on how to save your paycheck.

14. Cancel Your Subscriptions

how to save from your monthly salary

Do you have a host of monthly subscriptions because you thought they were good deals? 

Here is a list of monthly subscriptions that have risen in recent years:

  • Gym Membership
  • Video Streaming Services
  • Music Streaming Services
  • Gaming Streaming Services
  • Online Learning Courses
  • Scheduled Food Deliveries
  • Clothes Boxes
  • Magazine or Newspaper Subscriptions
  • Dating Apps
  • Personal Hygiene Services
  • And many more

The problem is that they are all cheap when they stand alone. However, once your subscriptions start adding up, it becomes a shocking figure per month. 

Subscriptions do not help with how to save money from your monthly salary. A survey conducted in the USA by Waterstone showed that an average of $237.33 was spent every month on subscriptions. 

You need to question every single subscription you have and see how much value you derive from it. 

Additionally, your entertainment subscriptions such as streaming services are taking time away from you focusing on a side hustle that can earn you more money.

15. Reduce Your Transport Expenses

how to save money from each paycheck

Are you always rushing to work or multiple locations and hiring Uber rides? Do you drive everywhere and spend a large amount on petrol and parking? 

If you answered yes to either of the above, you need to take a look at your traveling expenses. Have you studied your public transport system? Is it possible for you to travel easily to work? Perhaps there is a way to save some money on your traveling as a result.

Additionally, if your work location is not far from your home, why don’t you consider cycling to work? You get a free workout in the process and spend zero dollars on travel.

16. Opt For Work-From-Home When Possible

When people think about the benefits of working from home, what mostly comes to mind is the reduced travel expenses. 

There are other cost-saving benefits to working from home such as:

  • Eating at home
  • Wearing home clothes
  • Childcare 

Additionally, the time spent traveling can be allocated to your work. This is likely to help you be more productive and help you finish work earlier. You can learn how to save money if your salary is small here.

17. Invest In Your Health

Are you falling sick a lot? Chances are that you are spending quite a fair bit of money on medical expenses. You can invest in your health and save money as a result by exercising regularly and eating healthy food.

All these points go hand-in-hand with saving money. You learned how to eat healthy food above. What about exercise?

Cancel that gym membership and try working out at home. There are several amazing videos here teaching you how to work out at home with ZERO EQUIPMENT.

Nobody wants to be paying large amounts of money later on in life for terrible medical conditions which could be prevented by just taking care of yourself now.

18. Use Discount Coupons And Vouchers

Even though you may want to cut down your shopping expenses, this does not mean you cannot go shopping AT ALL

You still need to buy essentials, and sometimes when your clothes get worn out or you outgrow something, it needs to be replaced.

When that time comes, you can utilize whatever discount coupons or vouchers you have and save a bit of money on those essential expenses. That way you can learn how to save money from each paycheck.

Have you seen the elderly ladies at the supermarket exchanging their coupons and getting a nice discount on their purchases? Don’t look down on them! That is smart financial planning on their part.

Start collecting whatever discounts you see for NECESSARY expenses and use them when the time comes. This will help you stretch your dollar further.

You can find some online discount coupons here.

19. Buy Second-Hand Items

This is an absolute no-brainer. Have you ever purchased anything new and then only used it once or given it away because you regretted the purchase?

This is where buying second-hand items are extremely valuable. Most second-hand items cost at least 50% of the original price. These items are more often than not still in very good condition.

Another huge benefit of buying second-hand items is that it is more environmentally-friendly. The textile industry is one of the most polluting activities on this planet.

When clothes are thrown away, it can take around 200 years for them to decompose. You can give these clothes a new lease of life by buying them second-hand instead of it ending up in the landfill.

Buying second-hand items is such an easy way to save money. You can find more locations to buy and sell second-hand items online here.

20. Negotiate Where Possible

Did you know that it is possible to negotiate your monthly bills and have them lowered? It is quite similar to banking fees. Most of the time you are being charged for unnecessary add-ons.

All you need to do is educate yourself and fight for something more favorable.

Before you make the call to the relevant operator, prepare your points.

You need to identify the costs that you are paying, what struggle you are facing, and ask nicely. You must speak to someone who has the power to help you out. 

Once you are successful in getting your charge reduced, you must monitor your bills to ensure it stays that way. This is an easy method on how to save money from a small salary.

21. Collect Your Coins

If you do not have a coin jar at home, you need to set aside one unused glass or metal container for it RIGHT NOW.

Having a specific place to keep your spare coins means that you will not leave coins lying around in your laundry, the bottom of your purse, or in some drawer.

Whenever you find any spare coins within your belongings, place them in this coin jar and watch it grow. Once it is full, you can use it to buy some essentials and it saves you some cash for other expenses.

Additionally, by keeping a coin jar, you will make sure that you are not unnecessarily tipping cashiers and telling them to keep the spare coins as change.

Please do not exchange your coins at the bank. Banks will happily charge you for cashing in coins. 

Please spend your saved coins at the local grocers or small marts. They love coins because they always have to give them away as change.

22. Buy In Bulk

how to save money from a small salary

There are pros and cons to buying in bulk. Buying in bulk is helpful if you are good at managing the food items you have purchased. It saves you money on packaging, trips to the supermarket and the cost per unit is reduced.

There are ways that buying in bulk is not helpful. You may have bought a kilogram of chicken to be used for 5 meals. 

However, you may suddenly get excited and start baking something fancy. Now, that chicken is finished because you invited some friends over. 

Always remember why you bought in bulk and control your usage accordingly. You should treat food that you buy in bulk just like your money. 

Just because it is there, doesn’t mean you should use it up in an unplanned manner.

23. Use Cashback Apps

Cashback apps are similar to the point shared above about discount coupons and vouchers. It is a more modern concept though.

A lot of online apps now give you points or shopping rewards when you use them. These apply to fitness trackers or e-commerce platforms. 

If you are focused on how you shop or use your apps, you can keep track of where your points are. 

After that, you can accumulate them accordingly to fund your next purchase or give you a sizable discount.

24. Understand Your Local Tax Rules

how to save money from your monthly salary

Tax laws vary across every country. You must understand the tax rules in your country of residence. You need to learn how to reduce your tax bills legally.

There are many deductions that you can apply for which can reduce your final tax bill. Get in touch with your financial advisor or read up the local tax rules and see where it applies to you.

That being said, it is important of course not to do anything illegal to avoid paying taxes. The fines you will incur or prison charges are just not worth it.

 25. Reduce Your Utility Fees

how to save money from each paycheck

This is not entirely similar to the point above about negotiating your monthly bills to be lowered.

You cannot escape your water or electricity fees. Otherwise, how else can you function? However, there are many tips to reduce your utility consumption which will lead to lower fees charged.

Have you done a check on all your leaky pipes or is your window open while your air conditioner is switched on? You will be shocked to find that it is driving up your energy bill

Even something as simple as unplugging all your devices, switching off your laptop and WiFi completely when it is not in use will reduce your electricity consumption.

Are you leaving the tap on while you wash your dishes or spending ages in the shower? Then do not be surprised that your water bill is so high

Some of the easiest ways to reduce your water bill are to be quick with your showers, use recycled water to wash your toilet, and avoid the dishwasher for small quantities of dishes.

As for saving electricity, there are many lightbulbs in the market now that are more energy efficient. There are also water-saving showers, washing machines, and energy-saving refrigerators.

You may think that saving money by using that old appliance is a good idea, but it could be consuming much more energy than a new energy-efficient appliance.

Check out some of the recommended products below for your reference:

1. Energy Saving Light Bulbs in Bulk

2. Water Saving Tap

3. Water Saving Shower

4. Electricity Savings Box

How To Save Money Fast 

The 25 tips shared above are helpful to show you how to save money from a small salary or any salary. 

If you are urgently in need of increasing your savings, then you need to take the following steps in addition to what was shared above:

  • List down how much you need to accumulate and by when.
  • List down how much time you have to reach that financial goal.
  • See how much free time you have after work that you can set aside for a side hustle.
  • Pick a side hustle that can earn you that extra cash.
  • Get to work on your side hustle.
  • Put all your side hustle income into your urgent savings account.

Focus and discipline will be crucial in helping you reach your savings goals fast.

How To Save Money From A Salary Every Month 

Have you heard of the 50/20/30 Budget Rule? It is an extremely useful model that teaches you how much you should be allocating your salary. 

  • 50%: Needs
  • 30%: Wants
  • 20%: Savings

As your salary grows, it would automatically mean how much you allocate for your needs, wants and savings will also grow in equal proportion, right?

You need to analyze this rule when your salary grows. If your salary suddenly doubles because of a promotion, does it mean that your needs will also double?

That would be highly unlikely. As such, you need to limit your temptations on your expenses allocated to your needs and wants.

Try to find the discipline to allocate more of your salary as it grows to your savings or for proper personal development such as courses to help you upskill.


how to save money if your salary is small

There you have it, folks. You have learned some amazing methods on how to save money from a small salary. 

Please remember that your savings goal is a long-distance marathon. It is important not to treat it as a sprint and exhaust yourself completely.

As long as you have a clear plan and solid focus to achieve it, you will get to your savings goal.

Good luck to you and all the best!

25 Tips On How To Save Money From A Small Salary – Your Comprehensive Guide

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