How To Save 50% Or More Of Your Income (2024)

Hello! If you are new here, welcome to my post detailing the ways you can learn how to save 50% or more of your income. I suggest that you read my welcomepage(which lists my most popular and helpful posts) and my latest monthly blogging/online income report. Before I started blogging, I thought a good percentage…

Before I started blogging, I thought a good percentage to save each month was anywhere from 10% to 20%. I have even readan article where a “financeexpert”recommended 5% for retirement savings because they said it was good enough.

Now that I look back on those figures, that is just not nearly enough.

However, that’s what many news articles will tell you. They will tell you that anywhere from 5% to 20% is all you really need. That might work for some, but that’s just not good enough for me.

Here are different ways to save 50% or more of your income:

Make more money so that you can save half your income each month.

Making more money can really help you reach an income percentage goal of over 50%. This is because there is usually only so much money you can save, but the amount of money you can make is endless.

Lower your budget so that you can save half your income each month.

Okay, one of the reasons for why I am able to save so much money each month is because of the amount of money I make. I am not going to try to hide that.

However, just because you make less money does not mean that you can’t save moneyas well.

The person who I mentioned above who saves 85% of their income makes around $3,000 a month. Yes, so that means they spend $450 a month. I know this isn’t possible for everyone, but if this person can cut their budget then I’m sure others can save more than 20% of their income.

There are many different expenses that you can probably cut out of your budget or at least lower. Just because you are lowering your budget doesn’t mean that you are going to hate life.

Some expenses you can lower or ways to save money include the below. Like I said, everything isn’t for everyone, but even a small change can help you out.

Lower your cell phone bill.Instead of paying the $150 or more that you spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $5.YES, I SAID $5!If you use myRepublic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. I created afull review on Republic Wirelessas well if you are interested in hearing more. I’ve been using them for over a year and they are great.
ATM fees. Why do people do this to themselves?
TV. Cut your cable, satellite, etc. Even go as far to go without Netflix or Hulu. Buy a digital antenna and enjoy free TV – this is what we do!
Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too!Plus, when you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
Restaurant spending. Start eating at home more! Become an amazing at-home chef and make your family love your new found skills 🙂
Bring your lunch to work. When I had my day job, I always brought my lunch. This was to save money, but also because I hated wasting most of my lunch hour driving somewhere to get food.
Cut your travel budget.There are plenty of ways to travel on a budget. One way is to start earning credit card rewards.
Use a programmable thermostatso that you can heat and cool your home efficiently and more affordably.
Pay bills on time. The goal here is to try to avoid any late fees.
Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance and so on. Insurance pricing can vary significantly from one company to the next. When we were shopping for car insurance last, we found that our old company wanted something like $205 to insure one car for one month, whereas the new company we have now charges $50 a month for the same exact coverage. INSANE!
Save money on food. I recently joined $5 Meal Planin order to help me eat at home more and cut my food spending.It’s only $5 a month (the first four weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
Trade in your car for a cheaper one. For us, we are car people. Cars are one of our splurges. However, if you only have a nice car to keep up with the Joneses, then you might want to get rid of it and get something that makes more sense.
Live in a cheaper home. I’m not saying you need to go live in a box, but if you live in a McMansion then you may want to think about a smaller home. This way you can save money on utility bills and your mortgage payment.
Learn to have more frugal fun. We don’t spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.
DIY certain projects. I recently did a post about DIY wedding ideas and whether they were worth it or not. Read it! 🙂
I highly recommend that you check out Personal Capital(a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it is FREE.

I spend less money than I used to and I am happier than ever.

Are you trying to save 50% or more of your income? Why or why not? What is your savings rate right now?What are you doing to reach your goal of saving more of your income?

FAQs

How To Save 50% Or More Of Your Income? ›

If you're a dual-income couple, the easiest way to save half is by living on one person's income while saving the other. Start by living on the higher of the two incomes. Spend several months adjusting to this budget. Once you're comfortable with this, try to transition to living on the lower of the two incomes.

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Is it possible to save 50% of your income? ›

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What should 50% of your income go towards? ›

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

Should I invest 50% of my income? ›

“Ideally, you'll invest somewhere around 15%–25% of your post-tax income,” says Mark Henry, founder and CEO at Alloy Wealth Management. “If you need to start smaller and work your way up to that goal, that's fine. The important part is that you actually start.”

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Is it possible to save 40% of income? ›

Achieving 30–40 Percent Of Income Saved Is Never Easy — But It Can Be Possible. Ultimately, the act of saving money is never easy to do. Depending on your situation, circ*mstances, experiences, and obligations, saving even a single dollar can feel as challenging as saving $10,000.

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Is saving $1000 a month good? ›

Saving $1,000 per month can be a good sign, as it means you're setting aside money for emergencies and long-term goals. However, if you're ignoring high-interest debt to meet your savings goals, you might want to switch gears and focus on paying off debt first.

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Is saving $1500 a month good? ›

Saving $1,500 per month may be a good amount if it's feasible. In general, save as much as you can to reach your goals, whether that's $50 or $1,500. You could speak with a certified financial planner to help develop a plan for your finances if you aren't sure how much money to save regularly.

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Can you live off $1000 a month after bills? ›

The Takeaway

Making your budget work when you have $1,000 in monthly income is possible, though it might take some serious work. Drastically reducing expenses can be a great place to start, and bringing in more income can of course help too. Changing banks is one more money-saving tip to know.

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What is the $1000 a month rule for retirement? ›

According to the $1,000 per month rule, retirees can receive $1,000 per month if they withdraw 5% annually for every $240,000 they have set aside. For example, if you aim to take out $2,000 per month, you'll need to set aside $480,000. For $3,000 per month, you would need to save $720,000, and so on.

How did I stop living paycheck to paycheck and saved my first $1000? ›

Start an emergency fund.

It's your safety net for those “life happens” moments. Start by saving $1,000 as fast as you can. That might seem like a lot now, but once you've cut some expenses out of your budget, you'll be able to save up faster than you think. In fact, most folks are able to save $1,000 in 30 days!

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Is 50K saved at 30 good? ›

By 30, it would be beneficial to have $50,000 saved. This comes from the goal of being able to replace about 70% to 80% of your pre-retirement income in retirement.” While having the equivalent of your annual salary saved up by 30 may seem unattainable, Kovar believes it's achievable if you start saving in your 20s.

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How much money do I need to invest to make $1000 a month? ›

Invest in Dividend Stocks

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

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What is the 50% rule in investing? ›

There are a few rules of thumb that can be used in real estate when looking at and evaluating potential investments. One of these is the 50% rule. The 50% rule advises investors to estimate a property's operating expenses will amount to roughly half of its gross income.

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Is saving 50% of income too much? ›

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.

Is saving $600 a month good? ›

But when it comes to what they need to be saving, it depends. So, if we're starting with a 30-year-old, they should be probably saving close to $580, $600, at least, a month. And that's if they're going to earn a high rate of return. So it depends on how aggressive and risky that they're looking to be.

How many people have 200k in savings? ›

9% of Americans have between $100,000 and $200,000 saved, and 4% have between $200,000 and $350,000 saved.

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Can I save 70% of my income? ›

Financial Independence, Retire Early (FIRE) is a financial movement defined by frugality, extreme savings, and investment. By saving up to 70% of their annual income, FIRE proponents aim to retire early and live off small withdrawals from their accumulated funds.

Is saving 45 percent of income good? ›

So, we did the math and found that most people will need to generate about 45% of their retirement income (before taxes) from savings. Based on our estimates, saving 15% each year from age 25 to 67 should get you there. If you are lucky enough to have a pension, your target savings rate may be lower.

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Should people save 50% of their income to retire early? ›

The FIRE movement prioritizes saving and investing 50% to 70% (or more) of your income so that you can retire early. Elizabeth Ayoola is a NerdWallet personal finance writer and small business owner.

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