Hello and welcome! If you’re new here, I’m glad you found this post about strategies to save 50% or more of your income. If you’d like an introduction to my most helpful posts, please see my welcome page and my latest monthly blogging and online income report.
Before I started blogging, I believed a reasonable monthly savings rate was 10% to 20%. I even read an article where a “finance expert” recommended just 5% for retirement savings and claimed it was sufficient.
Looking back, those figures now seem far too low.
Many articles still suggest saving between 5% and 20%, and that may work for some people. For me, though, it isn’t enough.
Recently I spoke with someone who saves about 85% of their after-tax income each month. At first I thought that was extreme—maybe even a little crazy—but I was also a bit envious.
That person takes frugality to an extreme to reach that level of savings, but they’re happy with their choices, and that’s what matters.
Right now, we save about 60% of our income. That number could be higher, but we recently had a wedding (which redirected a lot of our funds), we’ve been traveling more (and buying equipment for camping and hiking), and a significant portion of my monthly business income goes toward taxes.
Saving a substantial share of your income each month helps you reach financial goals more quickly. For example, my savings habits allowed me to pay off $40,000 in student loan debt.
Practical ways to save 50% or more of your income
Increase your income so you can save half (or more) each month
Raising your income is one of the most effective ways to reach a savings rate above 50%. While there’s often a limit to how much you can cut from spending, your potential to earn more tends to be much greater.
Consider a part-time job, freelancing, starting a business, or pursuing passive-income opportunities. There are many paths to boost your income.
Some side hustles and income ideas include:
- Blogging. I make my living through blogging and have generated significant online revenue over the years. If you’re interested, there are guides and beginner courses to help you start a blog and learn how to monetize it.
- Virtual assistant work, which can be started with minimal upfront cost and scaled over time.
- Online survey and product-testing sites can provide extra cash for relatively little effort—sign up for several to maximize opportunities.
- Rideshare driving with services like Uber or Lyft can be a flexible way to earn additional income in your spare time.
- Rewards websites and apps that pay you for searches, shopping, or simple tasks. These won’t replace a full-time income but can add incremental savings.
- Cash-back services and shopping portals that return a percentage of what you spend online—use them for purchases you would make anyway.
Related ideas include collections of side-hustle suggestions, methods to earn an extra $1,000 a month, and resources on starting a WordPress blog or becoming a freelance writer.
Reduce your expenses to free up savings each month
One reason I can save a large share of income is that I earn more than many people, and I’m upfront about that. But you don’t need a high income to save aggressively—many people on modest incomes manage to save a substantial portion by cutting costs.
The person who saves 85% of their income earns about $3,000 a month and spends only $450. That level of frugality isn’t realistic for everyone, but it shows that significant savings are possible with focused budgeting.
Here are common expenses to reduce or eliminate—small changes add up quickly:
- ATM fees: Avoid unnecessary withdrawal fees by planning cash needs and using in-network ATMs.
- Television and streaming expenses: Cut cable or reduce streaming subscriptions. A digital antenna can provide free local channels at minimal cost.
- Use cash-back and rebate websites when shopping online to get money back on purchases you’d make anyway.
- Eat at home more and bring lunch to work. Reducing restaurant and takeout spending often yields large weekly savings.
- Travel less often or travel more affordably—use rewards and plan cheaper trips to maintain a lifestyle you enjoy without overspending.
- Install a programmable thermostat to lower heating and cooling costs by optimizing temperatures throughout the day.
- Pay bills on time to avoid late fees and penalties.
- Shop around for insurance. Rates vary widely between providers—comparing options can save hundreds or thousands annually.
- Plan meals and grocery shopping. Meal plans and budget-friendly recipes can reduce food costs while saving time.
- Save on fuel by combining trips, driving efficiently, or switching to a more fuel-efficient vehicle.
- Consider downsizing your home or choosing a less expensive neighborhood to lower mortgage and utility costs.
- Adopt lower-cost entertainment and hobbies. Frugal social activities can be enjoyable and budget-friendly.
- Take on do-it-yourself projects where feasible—DIY can save on event planning, home maintenance, and repairs.
- Use financial aggregation and monitoring tools to track spending and identify opportunities for savings. Free services can connect bank, credit card, and investment accounts for a clear view of your finances.
I spend less than I used to, yet I’m happier than ever.
Are you trying to save 50% or more of your income? Why or why not? What is your current savings rate, and what steps are you taking to increase it?