10 Ways a Salaried Person Can Save Up to 50% of Their Income

26 July 2023
12 min read
10 Ways a Salaried Person Can Save Up to 50% of Their Income

The average savings of the Indian middle-class person comes to be around Rs 10,000 per month as per media sources. But he/she should save 30% of his or her earning to survive in an uncertain world like ours, according to many experts.

For example, if someone earns Rs 1 lakh per month, then he/she should save at least Rs 30,000 per month.

Discipline and self-regulation are the cornerstones of a successful investment plan. I know it is difficult to cut away expenses when everyone around you is spending as if there is no tomorrow. The advent of tremendous peer pressure can cause a level-headed youngster to stumble.

Here is what you should know to help you save.

10 Ways to Cut Down On Your Monthly Expenses

If you often wonder how to save money from salary, it is recommended that the following are important in everyone’s life. And whatever balance remains post these essential savings can be spent. Individuals starting their careers or young earners should keep these in mind-

1) Health Insurance

A question may arise in your mind. How is it possible to save money by buying a health insurance policy when you have to pay a premium every year?

The answer is, it is better to spend, say, Rs 12,000 per year on a premium for a health policy rather than paying a large amount of money on unexpected hospitalization.

Diseases and accidents come without an invitation. You may save a few lakhs on hospital expenses in case of an emergency. Besides, you can take this cover not only for yourself but add your spouse too.

For example, the Average Indian working class spends Rs 1,500 per month on healthcare (including accidents), as per various reports in the media. So, Rs 1,500 is the amount spent every month, Rs 1,000 being the premium. You are likely to save Rs 500 per month.

Savings from health insurance is eminent and helpful in times of need.

2) Transportation

All of us prefer our personal vehicle when going to work. As the petrol/diesel prices are sky-high in India, you can save a bigger pie of your salary by using a cheaper mode of transportation. Provided, the costs, both time and money, between the two work out in favour.

  • Using public transportation: If you have access to public transportation, you can save quite a bit of money on petrol/diesel, parking, and maintenance over time. Each time you are able to leave the car behind, you save money. While on a daily basis, say Rs 10, savings may not be much, but if you look at the big picture, it is a lot in a year.

  • Carpool to work: If you have an opportunity to share a ride to and from work with someone else or use sharing cabs, you can significantly reduce wear and tear on your car, and save on fuel.

3) Telephone Bill

One can save a huge amount by prudently using their telephone plan if you frequently think about how much to save from salary.

This can be achieved by selecting a monthly recharge plan wisely.

  • Post-paid Plan

For instance, if you have Wi-Fi both at your home and at the place of work, then it will be better if you go for a plan with less data. This will cost you less as well.

However, almost all telecom players offer similar plans. It is the benefits offered, signal strength and call/data quality that should be considered before your choice.

For instance,

Airtel postpaid plan of Rs 499 per month offers 75GB data (with data rollover) and 100 SMS per day. It also offers one year Amazon Prime Subscription (free). This, along with other rewards, including Airtel Xstream services, Disney + Hotstar Mobile.

In the case of Reliance Jio, there is no Rs 499 plan. Instead, the company offers Rs 599 plan where 100 GB of data is offered with data rollover. And 100 SMS per day. It also offers Amazon Prime Subscription free for a year. This, along with other Jio Apps subscriptions.

Your choice should be based on how you will benefit from all these.

  • Pre-paid plan

If you have access to a work phone or you are able to be reached at all times through a landline, then go for a pre-paid mobile plan. This would be cheaper than post-paid.

Also, pre-paid plans are generally cheaper and can be customised to suit your requirements.

For instance, if you don’t require much data during the weekdays, then you can recharge only for weekends.

Note that, under either scenario, if your employer offers to reimburse your bills, you should claim and save the money.

4) Smart Online Shopping

There are various mobile applications and websites have come up in recent years. They all connect sellers and buyers from every corner of the country. A few of them even connect you with global sellers. While the mainstream platforms, including Amazon India or Flipkart, have prices more or less in a similar range, check for other authentic websites. These could offer the same product at a relatively cheaper price.

Alternatively, check all websites, including mainstream, during the offer period. It could save you.

There are a few pointers, too, that can help:

  1. Check for cashback or other discounts or coupons while buying. You can even check other coupon websites too for applicable coupons (to get discounts).

  2. Use payment wallets such as Paytm or Mobikwik, which could offer additional discounts or cashback. Alternatively, use credit cards or UPI, which sometimes come with discounts or free shipping.

  3. Ensure your purchase is eligible for free shipping. If not, then hold your shopping and wait till you get it. Shipping charges, in addition to taxes, could jack up the payment for you.

  4. Buy things that are only necessary. If you need to dress well for work, that’s okay. But don’t buy clothes just because you don’t have it or it looks nice. You can still save plenty by buying fewer but high-quality pieces and utilising the wardrobe you already own.

  5. Avoid offer deals. For example, you are going to buy a pair of jeans, you see an offer buy 2 get 1 free.  And you return home with 3 pairs of jeans. Do you ever realize you spend double the amount that you were supposed to spend? Avoid these kinds of lucrative offers while doing online shopping as well.

5) Prudent Grocery Shopping

Grocery is a must for every household, and a big chunk of our salary is spent on buying groceries every month. Here are some  smart ways to shop for groceries;

  • Go shopping with a list: Companies spend a lot of money on marketers who decide which items have to be placed on which shelf so that consumers buy more.

    You might have seen aisles of goodies near the billing counters of supermarkets which are stocked with items under Rs 100. This is placed so that customers keep buying things even while standing in the billing line.

    An excellent way to control impulsive buying is to make a list before heading towards the market. In that way, you will buy what you need, and your bills will stay in control.

  • Buy in bulk: The grocery items you need can be bought in bulk instead of buying 2-3 times a week. Buy the stock for the whole month in one go! Buying in bulk is cheaper.

  • Get a shopping card: All supermarkets provide shopping cards, in which you get rewarded with points for shopping in that particular supermarket chain. The reward point varies from 1% to 10% depending on items, offers, and seasons like the festive season. It is free of cost and helps you to accumulate a lot of points. You can use these points for shopping again.

6) Reduce Your Entertainment Expenses

If your primary concern is how much should I save from my salary, this is a good option. Many people look at entertainment as the first thing to cut when trying to trim costs, but they often forget to look at the regular expenditures that slowly eat away at their monthly income.

As entertainment is a necessary part of life, here are some of the unnecessary expenses in this domain:

  • Cancel club memberships: In busy work life, it is very difficult to be regular in gyms, Zumba classes, swimming, dance or other sporty activities. If you’re using a club membership less than once or twice a week, you are likely throwing away money. It is better to go for walks or do yoga to keep your health on track.

  • Reduce or eliminate your cable bill: With the arrival of online TV like Netflix, Hotstar, Amazon Prime, and Zee5, people rarely watch shows through cable connection. So if you don’t use cable, ditch that as well. Or you can subscribe to only those channels that you want to watch.

  • Cancel other subscriptions like magazines or newspapers if you never use them.

7) Cut Down on Energy Bills

From summer to winter, all the gadgets that are plugged in consume a hefty amount of money on energy bills. Fortunately, technology has brought us a few effective ways to improve energy efficiency and lower energy bills.

For instance, install CFL or LED light bulbs. If you use a normal 1000-watt light bulb in your home, consider switching to either CFLs or, better yet, LEDs. These bulbs are about four times more energy-efficient than incandescent bulbs and last for many years. Replacing a 60-watt bulb with a 14-watt CFL or LED like to save about Rs 50 per month.

Another way is to ensure you use all your electric devices prudently. Unplug devices when not in use. That laptop battery charger you leave plugged in, the washing machine you forget to turn off, all these can help save little. And results in big savings. This is an easy way if your main concern is how to save salary easily. 

8) Save Money on Food

Food expense is one of the most common problem areas in the average Indian budget. We either eat too much or eat out so often that it causes our expenses to swell.

  • Cook and pack your own lunch at work: Yes, it’ll take up a few extra minutes of your evening or morning, but wouldn’t you prefer to have an extra Rs 1,000 at the end of each month instead? Over the course of a year, that’s a saving of over Rs 12,000.

  • Reduce or eliminate eating out: Dining out can be a luxury and a huge time saver for a busy family, but the expense can be tremendous. By eating at home, you save money that would otherwise be spent on tax and tips, and you can save the extra calories too!

  • Keep eat-outs limited: Eating out can’t be avoided. But you put a cap on them. Fix twice or thrice in a month for eating and allocate a budget for the same. And strictly ensure not to exceed them. For instance, if you know you have a couple of birthdays in the family in the month, you can plan your dine-out accordingly.

9) Make More Gifts for People

India is a country of festivals and celebrations. Rather than splashing out on expensive gifts for people in festive seasons, cut expenses and make your own cards and presents, at least for a few.

Find creative ways to express your love to friends and family members with free, lower-cost or handmade birthday and holiday gifts. The gesture won’t be forgotten.

In India, an average of Rs 500 is spent by a middle-class working person on gifts.

10) Reduce or Get Away With Bad Habits

Any consumable habit, whether it be smoking or excessive drinking, can be a constant drain on a budget without any real benefit.

You can totally get away with these bad habits as soon as possible.


You may have landed yourself a good job, you may earn a fat salary, and you may have a bright future. Yet, none of this is quite fruitful unless you look at your savings.

Sometimes the hardest thing about saving money is just getting started. It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals.

Here is the summary of all the above calculations for cutting down your monthly expenses and the money you can save monthly.

Suppose your monthly salary is around Rs 50,000 and your monthly expense amounts to around Rs 33,700, you can save around Rs 16,300 per month.

With the implementation of the above-mentioned saving tips, you can cut down your expenses to around Rs 15,000, i.e. nearly half of your earlier expenses. In this way, you can save an additional Rs 18,800 per month, taking your toll of savings to around Rs 35,000 every month.

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Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Aakash Baid

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