It seems like an impossible goal, but there are some people out there managing to save half of their paycheck every month. While this isn’t feasible for everyone, it can inspire us to try saving more of our earnings and living on less.
Here are a few ways in which the budget-conscious can aim to only spend a portion of their salary — and what they tend to do with the rest.
Track Your Spending
Often, we are not really aware of what we spend our money on from day to day. A latte here, a posh lunch there — but it all adds up over time. To get an idea, track everything you spend for 30 days.
Free apps like Mint are perfect for this, or you can do it yourself with an old-fashioned pen and paper or spreadsheet. You’ll quickly spot patterns in where your money goes, and decide if there are simple changes to be made that will result in more savings by the end of the month.
Negotiate For That Raise
The larger your paycheck, the easier it is to save more of it. This isn’t always the case, because people’s lifestyles often inflate as they move up the pay scale — but it can be if you decide to make it a priority.
Use the PayScale Salary Survey to find out what you should be earning based on your skills and experience. Read up on negotiation tips, because these conversations don’t come naturally for most of us.
Be Mindful and Automate
After tracking your outgoings, mindful spending should come a bit more naturally. You’ll be conscious of where each cent is going, and ask yourself whether something is really a necessity before forking over the cash. Simply pausing for a moment before a purchase can often help you decide if it’s really worth the money.
Automating savings and investments can make life a lot easier in this regard, too. Once you’ve established how much you spend in the average month, you can set up automated transfers from a checking account to a dedicated savings account. If you have a few different savings goals, you can simply divide up the contributions into a couple of accounts.
Tell us What you Think
Saving half of each paycheck is a lofty target, but do you try to save as much as you can? Do you have any saving tips? Let us know in the comments, or join the discussion on Twitter.