Is it possible to save monthly from your salary? Yes, it is. This saving can be made possible if you understand the concept of salary calculation. In other words, it is possible to calculate your monthly expenses and then save the difference between them.
Most people have the impression that salary calculation cannot be done by themselves. In fact, it is very easy to do. All you need is to know how to use the different pieces of information available to you can end up saving monthly from your salary.
The first thing you need to do in order to save monthly from your salary is to find out your average monthly expenses. You can do this by getting the sum total of all your bills, including the expenses for utilities, food, recreation and even miscellaneous expenses such as cigarettes and others. If you have a bank account, you can also include the ATM withdrawal as part of your salary calculations. Once you have this information ready, you need to figure out your monthly income. Add up your monthly income to get your yearly salary.
Once you have got your monthly expenses, salary and income, you can now calculate your monthly outgoings. Add up all your monthly expenses, salary and outgoings together. This will give you your yearly salary amount.
Now all you have to do is divide your yearly salary amount by your yearly income to get your monthly outgoings. This will tell you how much you are going to spend on your debt repayment each month. Note down this number. If you know that you are going to spend more than you earn, you need to save monthly from your salary accordingly. If however you note down that you are earning less than you are going to spend, you can set aside the money and only save monthly from your salary once your outgoings start coming down.
When you have set aside the money, you need to start planning your monthly budget. You can do so by categorizing your expenses into various categories. These categories can include food, entertainment, recreation, clothes and a house payment. If you are planning to make some payments towards any of these categories, then list them out separately. Depending on your repaying ability, you can prioritize the repayment on a monthly basis or as per the total amount you are expected to pay monthly.
After you have categorized your expenses, make a separate budget for each category separately. You should be able to make a rough estimate of the money that you have to spend on each category. Again depending on your repaying ability, prioritize your repayment on a monthly basis. For instance, if you can easily make three payments per month towards your house payment, you can leave the entertainment and dining expenses until the end of the month.
When you are done with your categorization of expenses, it is time to make a list of the things you want to purchase during the month. You can check the current expenses in your budget against your list of items you want to buy. Remember to budget for the basic necessities like food, clothes and housing. Also make sure you include some luxurious expenses like vacations and gifts. Add the monthly expenses of your family members too. This will help you keep a tab on your spending and will also prevent you from going overboard.
Now that you have a clear idea of the amount you will be spending and the things you want to buy, categorizing your expenses and making a budget is not the end of the work. You will still need to stick to your plan to save monthly from your salary. Start saving a little more money every month so that when it is time for payment, you are not in a bad position. It is always a good idea to build in a small savings every month so that you do not have to rely on your savings completely.
Remember that you should not depend entirely on your salary. Even after you have paid your bills on time and have saved a certain amount, there are chances that your bills may increase. You have to save monthly from your salary so that when the recession comes, you are not left with no money to meet your basic needs. Stick to your plan to save monthly from your salary and avoid getting into debt or running on a tight budget.
There are many ways you can make your budget easy to follow. You can categorize your monthly expenses using expense planning, expense tracking, and expense monitoring program software programs. You can also make use of your bank statements, utility bills, credit card receipts, bank account statements, and any other documents you have. Stick to your plan to save monthly from your salary and maintain your good financial track record. Remember, you will need to come up with a good saving plan if you want to save monthly from your salary.