How to Save Money From Salary Below RM3,000

How to Save Money From Salary Below RM3,000

There are many individuals who still struggle to save money from salary or earned income. In fact, many could not survive throughout the month and end up borrowing either from banks or family and friends. So, how to save money from salary consistently?

We know it’s inevitable in this economy but trust us there are ways that this can be overcome by having a plan and using the right formula to analyze your cash flow – the actual amount of money coming in and money going out.

In this article, we share a few effective budgeting formulas to help you better manage your money even if your salary is below RM3,000.

5 Formula To Save Money From Salary

1. 30 + 30 + 30 + 10

This formula includes the division of your salary into four parts, namely 30%, 30%, 30% and 10%.

Let’s take the example of your net salary is RM3,000, so the money is divided into RM900, RM900, RM900 and RM300.

The first part of 30% is allocated for future enjoyment which includes savings, insurance/takaful and investments.

The second part of 30% is allocated for debt repayments and daily expenses. If you need a loan for home or car financing, make sure the monthly installment does not exceed 30% of your salary.

The third part of 30% covers other expenses such as food and drink, kitchen items, personal needs, rent, bills and any other monthly expenses.

Meanwhile, the remaining 10% can be used to give to parents, donations, gifts or even to pay for zakat.

This formula is suitable for those who just started working or may have lesser commitments.

2. 20 + 50 + 30 

save money from salary

The first part on how to save money from salary using this technique, i.e. 20% is for savings. We recommend to open a separate savings account dedicated especially for your future emergency funds.

Once your salary comes in, set aside 20% of your salary into the savings account. Make sure not to withdraw anything from that savings account and by end of the year, you will be amazed how much you have actually saved.If you are looking for another savings alternative, ASB is great. ASB will not only help you achieve financial goals such as buying a house or car, but it is also one of a tools to save for retirement.

Salary RM3,000 x 20% = RM600 (save into savings account)

RM600 per month x 12 months = RM7,200 per year

The portion of 50% is allocated for debt payments and fixed bills. It includes bills for electricity, water, internet, telephone, and so on. DO NOT include credit card bills used for eating & drinking out, entertainment, clothing, etc. One should always choose to spend wisely.

Debt payments involve personal loan repayments, car/home loans, business loans, and so on. If you want to apply for a personal loan, make sure your monthly debt repayment including the existing one, does not exceed 50% of your salary.

Salary RM3,000 x 50% = RM1,500 (maximum limit for total monthly payments for debts and fixed bills).

The third part of 30% covers other expenses such as food and drink, kitchen items, personal needs, rent, bills and any other monthly expenses. Meanwhile, the remaining 10% can be used to give to parents, donations, gifts or even to pay for zakat.

This formula is suitable for those who just started working or may have lesser commitments

3. 90 + 10

This simple formula on how to save money from salary is often used by those who do not want to divide their money into many portions.

The 90% portion applies to all expenses, whether fixed or variable expenses and necessities or wants expenses.

It is also used to pay debts, bills, food and drink, personal needs, entertainment, self-rewards, and so on.

As long as all commitments remain paid such as debts, rent, bills and does not exceed 90%. Meanwhile, another the portion of 10% is reserved for savings or investments.

4. 30 + 20 + 10

This formula is ideal for those who want to manage their salary on a weekly basis. Set aside 10% for saving and investment.

The remaining 90% is then divided into four parts representing four weeks, namely 30%, 20%, 20% and 20%.

The first week, use 30% of the money to pay fixed commitments such as debts, rent and bills, while use the remaining 20% portion for the upcoming week.

You are also encouraged to control spending and if there is extra, you can always put it into your savings fund or choose to spend it.

5. 10 + 20 + 60 + 10

This is another way on how to save money from salary, by dividing your salary into four parts, namely maximum 10% protection, minimum 20% investment, maximum 60% commitment and maximum 10% ‘spending leaks’.

The maximum 10% of your salary is allocated for protection like insurance. It’s always good to protect yourself in case of any unwanted incidents.

Salary RM3,000 x 10% = RM250 (try to find a medical card with this price and also offer various benefits). 

A minimum of 20% is for emergency savings, at least 6 months of your salary. It includes short and long term savings, education, retirement pensions and travel plans.

Salary RM3,000 x 6 months = RM18,000 (for emergency savings). Make sure all funds are kept in the bank, no withdrawing unless its for emergencies.

You can also place your savings in investment that provides dividend namely EPF, ASB, robo advisors, unit trust, gold and stocks.

Next, allocate 60% for your commitment. You need to be smart to differentiate between wants and needs. The commitments include daily expenses for you and your family, mortgage loan, car loan, ASB, personal loan and PTPTN.

Some examples of daily expenses are groceries, electricity bills, petrol, and so on.

If you need a car for daily use, make sure you buy following the percentage in the salary, i.e. the monthly installment does not exceed 15% of the net salary.

Salary RM3,000 x 15% = RM450 (ideal car monthly installment for you)

Finally, a maximum of 10% leakage. This can be used for less important things such as shopping or rewarding yourself.

10 Useful Salary Management Tips For Low Income Earners

how to save money from salary
Source: Freepik

Even if you are earning a low income, you still can save little by little. Here we share 10 tips that you can apply.

1.Don’t Spend All Of Your Salary 

It is important not to spend the everything by buying unnecessary items. If you want to be successful on how to save money from salary, you should spend your money wisely even if the next paycheck comes in early!

2.Settle All Debts And Commitments 

If your salary stays low after paying off all debts, you may need to rethink the way you live your life.

Some realistic solutions could be finding a roommate to share rent, or even switching to a more economical vehicles such as motorcycles and to use public transport. 

3.Be Disciplined In Spending 

Make sure you only buy items that are on the to-buy-list.

Avoid going to the store too often as you will tend to buy unnecessary items such as snacks and soft drinks.

4.Get A Side Hustle If You Can 

You need to try to increase your income, for example through freelancing, dropshipping, baking, selling second hand goods, be a food rider and so on.

Alternatively, you can also generate passive income through unit trust investments, real estate investments, gold investments and so on. What is important is not to get caught up in scam offers and that the part time job would not affect your fixed job.

5.Save Using A Piggy Bank 

Psychologically, when we see the money placed in the jar increases, you will feel extra motivated to add more money. And contrary to when you use the money, you will be able to ‘realize’ how quickly the money actually disappears. So, be careful in keeping the money at home.

And contrary to when you use the money, you will be able to ‘realize’ how quickly the money actually disappears. So, be careful in keeping the money at home.

6.Bring Your Own Lunchbox  

It is not wrong or even embarrassing for you to bring lunchbox to work. Not only it can help you to save a lot of money, but you also get to eat healthier. If you need some motivation, invite a colleague or two to join you and have lunch together

7.Calculate Your Expenses 

Clearly state the amount of expenses and income on a piece of paper. This will help you to see your financial situation more clearly.

It will also strengthen your commitment to work smarter or harder.

8.Save First, Shop Later 

If you spend all your income first and save later, then that is the most effective move to create chronic financial problems in the future.

Use this formula to avoid getting lost: Salary – Savings = Spending.

9.Buy Wholesale Goods  

Even if you’re single, that doesn’t mean you can’t buy wholesale goods or in bulk. Aim for things that are not easily damaged and are always in use.

You can team up with a friend to buy together so you both get a cheaper price.

10.Give Back To Society 

Do good and good will come back to you. Start little by little. It is also a source of blessing. Remember what they say, the more you give the more you get and it’s not about the amount but it’s the thought that counts.

Video: How to Consistently Save Money From Salary Below RM3,000 Salary

Here are 3 ways to save money from your salary. Remember, it’s better to start now so you can have financial freedom in future!

Conclusion    

Lastly, what is most important in saving money is to always be committed and disciplined. Although there are many types of ways to save money, you do not necessarily have to practice them all. Find a way that suits your abilities and needs.  

Always have the right mindset and reset your finances so that your saving goals can be achieved. Sometimes its normal to fall off track, but its best to quickly get your head back into the game. Don’t give up, you can do this.  

This article is written by Direct Lending – a licensed bank & cooperative personal lending platform. We can help you find, compare & apply for the personal loan that best suits your needs. Check your eligibility for free & get a loan as low as 2.31% or as fast as 2 working days.    

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