How to Save 30% of Your Income – Is It Possible?

Save 30% of your income!

I think we can all agree that saving money feels good.

There’s nothing like feeling financially stable and eliminating
the stress that normally comes from thinking about money.

But if you’re wondering how much money you should be
saving, there’s no right or wrong answer.

However, if you’re wanting to fast track your savings, saving 30% of your income is a really strong goal to aim for. It teaches you to live on much less than you earn (preventing a paycheck to paycheck life) and allows for you to hit your financial goals much faster than the average person.

Ready to start saving but not quite sure how to go about it?
Here’s how to save 30% of your income.

Calculate 70% of Your Take Home Pay

The first thing you need to do is figure out what your
spending and what your saving amount needs to be. We’ll base this off your net
income. (This is the amount you make after all deductions.)

Here’s a super simple equation to help you determine your
new budget:

Monthly Take Home Pay x 70% = Your 70% Budget

If you netted $3,500 per month your new monthly budget would
be $2,450. Your monthly savings amount would be $1,050.

Average the Last Three Months of Your Expenses

Now that you know what you should be spending if you want to
save 30% of your income, it’s time to figure out how much you actually spend!

If you use an app like Mint or Clarity Money (my favorite) then you can look back and easily see what you’ve been spending. If you don’t currently use a money tracking app you need to go back through your past three months’ worth of bank records and categorize your spending by month.

You can then take an average of those three months to see
where you currently land.

Write a New Budget

My guess is that you’re like most of us and are currently
spending more than 70% of your income
. That’s ok.

Now is the time to sit down and decide what your new budget
is going to look like. Start by listing all of your fixed expenses (like your
rent, electric, insurance, etc.) Once you have those covered see how much money
you have left for everything else and ration it out.

Budget out your money until you’ve spent (on paper) your 70% budget.

Reconcile Your Current Spending with Your 70% Budget

Chances are, getting your budget in line with 70% of your take home pay was a little more difficult than you’d thought it would be.

If so, you need to look for ways to reduce your spending.

Here are a few smart ways to save your budget:

  • Switch Phone Carriers
  • Downgrade Your TV Package
  • Cancel Any Subscriptions You Don’t Regularly Use
  • Set a Small Eating Out Budget
  • Pack Your Lunches
  • Menu Plan
  • Batch Cook
  • Get a Roommate
  • Find a cheaper place to rent
  • Sell a too-expensive-for-you car
  • Check your insurance rates
  • Refinance loans with super high interest rates
  • Call credit card companies and ask them to lower your interest rates
  • Hold weekly budget meetings
  • Shop secondhand
  • Ban yourself from buying new clothes or shoes
  • When you buy something new sell something you already have
  • Always shop with a list
  • Find free/cheap entertainment options

Go through each line item on your budget and see if there
are easy ways for you to reduce each expense.

Guarantee You’ll Save – Automate Your 30% Savings

If you want to guarantee that you save 30%, it’s time to
automate your savings.

I personally use multiple savings account do this. (Read
about my money organization system here.)
I have different income streams automatically deposited into different savings
accounts. This ensures that I don’t have a chance to spend my money before it
gets to where it needs to be.

You can do this yourself by having automatic withdrawals
taken out of your checking and put into savings. Another option is to have your
savings automatically withdrawn from your paycheck if this is available to you.

Is It Possible to Save 30% Off Your Take Home Pay?

That depends on how much you earn. If you’re not earning enough to cover your regular expenses (and those are already pretty low) then no, it won’t be possible until you start earning more.

However, if you’re earning a moderate wage then yes, if you’re willing to cut back on your spending, saving 30% of your income is absolutely doable!

Want to up your savings game? Here's how to save 30% of your income. Includes how to calculate your new budget, find ways to save, and more. #saving #personalfinance

The post How to Save 30% of Your Income – Is It Possible? appeared first on Single Moms Income.

Leave a Reply

Your email address will not be published. Required fields are marked *