How to save on a small salary

The thing about employment is that we do not get to choose our salaries. That will depend on our employer. They can offer us a figure and we can either take it or leave it. Of course some people can negotiate. But only in special situations is negotiation applicable.

If you are just starting on your corporate career, you can’t expect your salary to be big. Unless you are some hotshot superstar, you will have to start small. With all the expenses you have to pay each month, you might think that saving even just a small part is next to impossible. Yes, it is hard. But it can be done.

Here are some ways on how to save on a small salary.

Make a balance sheet

You may think that a balance sheet only works for businesses. But it can benefit individuals as well. A balance sheet contains different columns such as salary, expenses, assets, liabilities and the like. This helps you keep track of your cash flows each month. By keeping a balance sheet you will be able to keep a vivid picture of where your money goes after every pay day.

Prioritize your expenses

When it comes to saving, it doesn’t matter how much you are earning. It is how much you keep. What good is a big salary if your expenses are bigger? We all have expenses. But we can prioritize so that we will be able to spend only on those which are most important to us.

Develop the habit of saving

Saving is a habit. If you are not used to saving, it will be hard for you put aside a portion of your monthly income. One way to make it easier for you is to develop the habit of saving before spending. How? After receiving your salary set a side a portion of it let’s say, 10% for your savings. Then you can spend whatever is left.

Think long term

When you are young and have minimal responsibilities, it can be tempting to spend all your money after every pay day. After all there’s always the next pay day, right? Wrong. Despite what most people think, there is no such thing as job security. It’s a myth that companies have invented to lure people to work for them. If you want to be financially secure, you have to learn to manage your finances responsibly. Learn to save because saving is the first step to investing.

For most people, the thought of saving might be pure torture. How can I save when I can barely scrape by each month? But saving is the first step to financial freedom. Sacrifice now and reap the rewards later.

Amy C. Fountain is an online marketer who knows the value of investing and thinking for the long term. She also collects Tabletop Fountains and Candle Lanterns because of the peace and relaxation she claims it brings her.

Photo credits: o5com / CC BY 2.0