Salary & Savings

How Salaried People Can Improve Savings in 2024? Best Ways to Manage Salary Income?

No matter how much you earn, at times, salaried people are unable to save enough. Be it Rs. 0.50 Lakh, Rs. 1 Lakhs, or Rs. 5 Lakhs, monthly income, the same is not adequate to fulfill the financial goals.

In this blog, let’s deeper get into the reason for this.

You might think that below mentioned reasons are the main ones, due to which a normal salaried person cannot save enough money,

  • Inflation and rising Living Costs
  • Fixed Expenses and financial commitments
  • Rising Education and Medical Expenses
  • Lack of Financial Literacy


However, this is a half-truth. No doubt these are the reasons, however, the culprit is something different.

People spend a lot of money, especially in India, on House Purchases, Marriage of Children, and the purchase of a car. Apart from the education of children (which is a necessity), maximum income is spent on these three things.

Let’s assume a person earns Rs. 5 Lakhs per year approx. and on an average earning span of 35 years.

So, how many years of income does a person spend on marriage, a house, and a car?

  • Considering the current scenario, the average spend on a wedding is Rs. 10-15 Lakhs. In case he spends Rs. 20 Lakhs on a marriage of two children, it means, he has spent approx. 4 years
  • of income.
  • Due to easy access to loans, a person with an income of Rs. 5 lakhs, purchase a car of Rs. 15 lakhs, 3 years of income is gone.
  • Purchasing a house of Rs. 50-60 Lakhs including furniture/interior (spent 12 years of income)

Hence, approx. 20 years of income is spent on marriage, a house, and a car. (These are the rough approx.  and calculation. Here, I have ignored the inflation and your income rise as well.)

Other year/s income is spent on day-to-day expenses, bills, education of children, etc. The list is never-ending. In view of the same, saving for financial goals always takes a back seat. Further, this remaining income is not sufficient to take care of you in earning span and after your retirement.

Spending a lot of money just to make a few days special does not make any sense. Rather, spend on things which will make your life quality better every day.

“Spending is not a problem, but spending by availing loan or spending which you cannot afford, is a terrible financial decision”.

As we step into the new year 2024, it’s the perfect time for salaried individuals to reassess their financial goals and adopt effective strategies for managing their income wisely. Saving money might seem like a daunting task, but with a bit of planning and discipline, anyone can improve their financial health.

Create a Budget

Making a budget is the first step toward efficient financial management. Make a list of every monthly expenditure you have, such as rent, utilities, groceries, and loan repayments. Set aside a certain amount of money for every area, and monitor your expenditures. This can help you find places where you may make savings and provide you with a clear picture of where your money is going.

Spending according to your affordability is smart

You need to understand how much you can afford. As mentioned in an earlier example, spending 1 year to 1.5 years of your annual income on a car is appropriate. Further, you are not recommended to spend more than 2 years of annual income on the marriage of your child. This way you can majorly cut off your expenses or you can avoid taking loans, and save money.

Emergency Fund

As life is unpredictable, having an emergency fund handy is going to act as a safety net, just in case of unanticipated expenses like medical crises or job loss. Hence, keep aside money in a separate account, equal to three to six months of your income. If you need to start small, do so, but develop the habit of consistently adding to your emergency fund.

Also Read5 Pillars to Build Strong Financial Foundation in New Year!

Automate Savings

Utilize technology in your favor to save money. As soon as you get your salary, set up a monthly automatic transfer for monthly investment from your savings account. In this manner, saving becomes a priority and you’re less inclined to misuse the money carelessly.

Invest Wisely

To make your money work for you, start exploring investing alternatives based on your objectives and risk tolerance. Different options provide a range of risk and return, such as Public Provident Fund (PPF), Bank & Post fixed deposits, Debt Mutual Funds, and Equity Mutual Funds. To find the best investing plan for your financial objectives and risk tolerance, speak with a financial advisor.

Track Expenses

Use apps or old-fashioned pen and paper to track your daily expenses. This practice will help you identify unnecessary spending patterns and encourage mindful spending. Knowing where your money goes is essential for making informed financial decisions.

Avoid Impulse Purchases

Before making a non-essential purchase, give yourself some time to think. Impulse buying is a common habit that can quickly deplete your savings. Create a list of priorities and stick to it, resisting the temptation of unnecessary expenses.



It’s not difficult to increase savings as a salaried individual in the new year. These easy-to-implement techniques will help you build a solid financial base that will give you financial stability and enable you to reach your long-term financial objectives. Keep in mind that discipline and consistency are key. Cheers to a productive and sound financial year ahead!

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