4 Realistic Ways to Save Half Your Income

After calculating my new two person budget I realized that combined we would be socking away 47% of our income on a bad month and even more on the months where we earn more than average.

The good news was that we will able to do this at a quite comfortable spending level. (Note that I’m not talking about spending ungodly amounts of money on wasteful things but that we have a small entertainment budget, satellite TV, a healthy food budget and so on.)

It feels good to finally say that I can save half of my income without a problem. That means when things are going great we can add a lot of money to savings and if things are going bad and one of us were to lose a significant source of income we’d be just fine.

It’s financial security at its best.

If you’re wanting to increase your financial security here are four realistic ways to save half of your income.

Live Off of One Person’s Salary

If you’re one half of a working couple then save the other persons income. Even if it doesn’t equate to half of what you bring home it will still get you on the right path.

You might have to cut back your expenses but it will be well worth it.

Create and Save Specific Income Sources

I work from home. My income comes from more than ten different sources each month. Some of these income streams started out really small but have immensely grown over time.

For as long as I can remember I’ve had two of those income sources deposited directly into savings. I have a third income source that is solely for paying self-employment taxes each month.

Here are some online income ideas and some offline income ideas.

Challenge Your Budget

If you’re single and only have one source of income then you’re going to have to temporarily lower your standard of living to reach that savings mark.

Concentrate on the big items like car payments, rent, and mortgage payments. These are going to make the biggest difference.

Count Your Debt Payments as Savings

I have the luxury of not having debt. My husband and I have never been the type to take out debt for frivolous things. Neither one of us went to college either and therefore don’t have student loan debt. And despite not going to college our combined income is more than the twice the median household income for our town.

If you have a lot of debt the reality is that it’s much better of an idea to get rid of your debt rather than put your money into savings. So start counting all of your debt payment as savings.

There’s a lot of freedom that comes along with being able to save half of your income. You can build up a significant amount of savings and won’t be destroyed if you lose a job. It might take a lot of work for you to get there but it will be completely worth it.

Additional Saving Resources

Saving money effectively requires two things.  First, you need to educate yourself.  Second, you need a supportive community of people who will help and assist you in achieving your goals.  For education, I suggest you pick up a copy of Dave Ramsay’s The Total Money Makeover.  Its a classic piece which has helped thousands of people.  A couple of hours spent reading the book the modest investment should reward you well.  Get it on Amazon now for $13.38.

For a supportive community consider checking out the saving advice forums.  Its pretty much full of hard core savings nerds who just want to swap ideas about saving and finance.  You’ll like them. Go sign up.