How to Save Money from Salary in India: 2025
Disclaimer: This article is for educational purposes only. It is not financial advice. For personalized guidance, consult a SEBI-registered investment adviser. Bank rates, terms, and tax rules may change – verify key details before taking any action.
Are you earning every month but still ending up with zero savings? Are you questioning yourself about how to save money from salary? You’re not alone. Most salaried individuals in our country face the same problem. The issue isn’t your income—it’s how you manage it. Many of us think that we can not save enough money. We expect a miracle to happen to save huge amounts at once. I never thought about saving money in the past. But after learning financial knowledge, I am now managing and saving enough money.
In this blog post, I will share my realistic and practical ways to save money from your salary, even if you earn ₹15,000 or ₹1,00,000 per month. Whether you’re a fresh graduate, a working professional, or someone with a growing family, this guide will help you build a strong financial foundation.
Table of Contents
Why do most people fail to Save Money from Salary?
Here are some common reasons why savings disappear before the month ends:
- No fixed monthly budget
- Spending first, saving later (wrong order!)
- Lack of emergency fund
- Peer pressure or lifestyle inflation
- EMI and credit card debt
Solution? Build a salary-saving system. Let’s show you how.
Step-By-Step Formula to Save Money from Salary
Step 1: Use the 50-30-20 Rule
| Category | Percentage of Salary | Example (₹30,000 salary) |
|---|---|---|
| Needs (Rent, Bills, EMI) | 50% | ₹15,000 |
| Wants (Shopping, Outings) | 30% | ₹9,000 |
| Savings + Investments | 20% | ₹6,000 |
You have to divide your salary as shown in the above table for your needs, wants, and savings. This formula is widely used all over the world. It’s not mandatory to follow the above, you can change according to your comfort. Currently, I am saving 50% of my salary and restricting my needs and wants to 40% and 10% respectively.
Step 2: Automate Your Savings First
As soon as you receive your salary:
- Set up an auto-transfer of 20% to a separate savings or investment account.
- Use apps like Groww, Zerodha, Kuvera, or Paytm Money for SIPs in mutual funds.
- Keep your savings account and expense account separate.
I am an active investor, so I first transfer 50% of my salary to the Investment account. I will decide where to invest it later. So first thing you have to do is to transfer some part of your salary to an investment account. This step increases your savings discipline. Many of us fail to follow this step, because as soon as we receive our salary, we trigger our wants rather than savings.
Step 3: Cut Down on “Invisible” Expenses
These expenses silently eat into your salary:
| Expense Type | Tip to Save |
|---|---|
| Food Delivery | Limit to weekends, or monthly once |
| OTT Subscriptions | Limit to weekends, or monthly, once |
| Mobile/Data Bills | Switch to annual or bundled plans |
| Impulse Shopping | Follow 24-Hour Rule before purchase |
I never use any online food delivery apps. I hardly watch any OTT platforms. I learned to control Impulse Shopping by following the above 24-Hour Rule before purchase. There is no other option but to adopt these habits to save money.
Step 4: Start a Mini SIP (Even ₹500 is Enough to start)
Mutual Funds via SIP are perfect for salaried people.
- Start with ₹500/month in Index Funds (Nifty 50, Sensex).
- Gradually increase as income grows.
- Use apps with zero commission (e.g., Zerodha Coin, Groww)
Step 5: Avoid EMIs for Non-Essentials
EMI = “Eating My Income”
Don’t buy:
- Phones on EMI
- Fashion or gadgets on credit
- Travel with BNPL (Buy Now Pay Later)
Instead, save for 3 months and buy in cash. Your future self will thank you.
Frequently Asked Questions
How much should I save from my salary every month?
Start with at least 20% of your take-home salary. If you’re just starting, even 10% is fine — the key is consistency.
Where should I save my salary money?
First, build an emergency fund in a high-interest savings account. Then, use SIPs in mutual funds or recurring deposits to grow your money.
Can I save money with a ₹20,000 salary?
Yes. Start by saving just ₹2,000/month. Cut down food delivery, use public transport, and avoid EMI purchases. Track your expenses daily.
What is the best savings formula?
The 50-30-20 rule is a good starting point. Adjust based on your rent, dependents, and financial goals.
How can I save money from my salary?
1. Follow the 50/30/20 Rule
2. Automate Your Savings
3. Track and Cut Hidden Expenses
4. Increase Savings with Every Hike
What is the 50/30/20 rule of money?
The 50/30/20 rule is a simple and effective money management formula to budget your monthly income. It helps you control spending, build savings, and avoid debt.
50% – Needs
Essential expenses like rent, groceries, bills, EMIs, and transportation.
30% – Wants
Lifestyle spending such as dining out, shopping, entertainment, and travel.
20% – Savings & Investments
Build an emergency fund, invest in mutual funds, pay off debt, or save for future goals.
Why the 50/30/20 Rule Works:
Promotes financial discipline
Ensures you always save before spending
Helps achieve long-term financial goals like home buying, retirement, or travel
How to Save ₹1 Lakh in 6 Months?
Saving ₹1,00,000 in just 6 months is completely possible with the right strategy, discipline, and planning. Here’s how to do it — even on a modest salary.
To reach ₹1,00,000 in 6 months, you need to save ₹16,667 per month. Even If you are earning ₹30,000 per month it is completely possible to save one lakh rupees.
Saving from Salary Is a Skill, Not a Sacrifice
Don’t wait for a high salary to start saving. Instead, build smart habits now that grow with your income.
Every rupee you save today buys you freedom tomorrow — freedom from stress, job dependency, emergency chaos.
Bonus: Use This Free Calculator
Compare whether you should use your extra money to prepay your loan or invest it for better returns.
Subscribe to our Newsletter to get a FREE personalized Excel sheet to track your daily expenses.
