A Guide To Saving Money On A Low Salary

May 25, 2021
09:00 P.M.
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Do you want to understand how to save and live a fully independent life, even with a low monthly salary? Using proper financial planning is an achievable goal. A personal financial plan requires only a basic understanding of money and the economy, a step within everyone's reach.


Everyone has short-term personal goals, such as taking a trip, or medium-term, such as buying a car, or long-term, such as purchasing an apartment or paying for college for their children. However, you need money for a personal project of this kind, and you need to save.

Without proper financial plans, people keep hoping that retirement and the help of the family will allow them to reach old age with a certain serenity.

Set Concrete Goals

Photo by RODNAE Productions on Pexels

Photo by RODNAE Productions on Pexels


In the beginning, the important thing is to know precisely what you want to achieve. The goals must be ambitious but at the same time realistic, and you must be willing to make corrections and improvements as the years go by. If you don't already have capital, the saving will mean reaching a positive gap between income and expenses.

And this is achieved by increasing revenue and decreasing costs. Everyone must consider the alternatives available to them to act in the manner they deem most appropriate. What one is willing to give up on short-term goals to achieve something in the long-term and how that decision affects one's quality of life should be the key questions.

Save Systematically

Photo by maitree rimthong on Pexels

Photo by maitree rimthong on Pexels


Many people look at savings as the surplus of their salary once they have made all the purchases, but this is not the case. There are indeed families that try to make ends meet every month, but it is also true that there are people who say they cannot save because they are not sure what they can give up.

Thinking how much a good or service would cost in terms of hours of work required to obtain it is an excellent trick to use when determining whether an expense is essential.

Create An Emergency Fund

Photo by Artem Beliaikin on Unsplash

Photo by Artem Beliaikin on Unsplash


Take your bank and credit card statements each month and see what you are spending your money on. A general rule is to allocate 50% of our income for basic expenses, 30% for personal expenses, and the remaining 20% ​​as a savings fund.

It is also helpful to create an emergency fund to cover any surprises and not find yourself asking for loans with exorbitant interest rates. Keeping the equivalent of two or three months' salary in that safe is undoubtedly a good idea.

Diversify Your Income

Photo by Pixabay on Pexels

Photo by Pixabay on Pexels


Not putting all your eggs in one basket is a fundamental principle of finance. For this, however difficult it is, the advice is to have, in addition to the salary, a source of extra income, whether it is income from investments, securities and real estate, a freelance job, or others.

Diversifying your sources of income allows you to speed up your savings plans and make you less dependent on one employer or one market.

Think About Retirement

Photo by Marc Najera on Unsplash

Photo by Marc Najera on Unsplash


There are two significant financial risks in life: dying too early or dying too late. In the first case, the source of income on which other people may depend is abruptly cut off. In the second, we may find ourselves in a situation where our ability to generate money is very little or nothing.

Therefore it is essential not to depend on your income but on your availability. In the meantime, you're protected against any eventuality. Do not rely too much on state social security systems significantly if things do not change. You must do nothing but observe today's retirees and know that this is the best you can aspire to be.

Count On The Most Powerful Force In The Universe

Photo by Pixabay on Pexels

Photo by Pixabay on Pexels


So what is the best time to think about retirement? As soon as possible. In your favor, there will always be the most potent force in the universe: compound interest, which results from reinvesting the interest obtained to generate other interests. This is important if you want to maintain a standard of living similar to the one you have while working.

When deciding to invest in a retirement plan, time is your first ally, even more so than the return on the plan. While it is never too late, if you start your plan 15 or 20 years earlier, you will achieve your goals effortlessly. Regardless of your salary, many recommend dedicating 10% of your paycheck directly to the pension fund.

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