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8 Ways to Hit Your Savings Goals on an Entry-Level Salary

Published Aug 19 | 6 minute read

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When you earn an entry-level salary, it's easy to assume you'll only have money for the basics. Saving for the future? That'll come after your promotion.

But the truth is, saving is the basics. For one thing, building a savings habit now will set you up for long-term financial success, even if the dollar amounts you start with are small. For another, small dollar amounts really add up over time, especially when you take the power of compound interest into account.

So how can you kick-start your savings plan and set worthwhile goals you can achieve? This guide will set you up for success.

Why Saving Matters

You might think having a high salary is the key to comfort. But while earning a good income is important, it's assets that create the security that helps you work toward financial independence.

What are assets? They're the things you own, like stocks and bonds, real estate or cash in the bank. When life throws you a curveball—like a surprise expense, job loss or a period when you can't work—your assets help keep you standing.

Some lucky people are born into assets. The rest of us have to build them up ourselves—and that's where saving comes in. Putting aside part of your income helps you prepare for emergencies and achieve goals like purchasing a home, traveling or starting a business. Think of it as paying yourself first.

As a bonus, the sooner you start, the sooner you can take advantage of compounding—essentially, the idea that your money can make money.

Budgeting: The Key to Saving Success

The math is simple when it comes to saving: You have to spend less than you earn. For some people, this comes naturally. But in a world with opportunities to shop around every corner, it can be extremely hard to spend the right amount on vibes alone. We said simple, not easy.

This is where budgeting comes in. Think of it as a three-step process:

Assess your current situation: How much do you spend and how much do you make?
Create a budget that allocates your income to different categories, including saving.
Stick to your budget and adjust as necessary.

Let's say you earn $44,000 per year, which is close to the average entry-level salary. How much of that goes into your pocket depends on where you live and your personal tax situation, but we can estimate that you might take home about $3,000 per month. You might create a budget that looks something like this:

Savings: $150 (Remember, pay yourself first!)
Student loans: $250
Rent: $1,100
Phone and other utilities: $200
Transportation: $300
Food and other necessities: $700
Wants and fun: $300

Of course, this is just an example—your budget will reflect your situation. (No amount of budgeting is going to make rent in NYC or LA magically affordable; we know!)

Remember to differentiate between needs and wants when setting this up, and to use your current spending as a guide to help you get started. You can download a budgeting app or use a simple spreadsheet. Also, look for local resources to help you live better within your means. For instance, there might be public benefits available to young earners, or you might be able to take advantage of house sharing to keep your housing costs low.

There are lots of different budgeting strategies to help guide you, too. For example, the 50/30/20 rule suggests allocating 50% of your income to needs, 30% to wants and 20% to savings. But if you live someplace where your needs take up more than half your income, you might need to adjust that strategy and start smaller with saving, such as by putting aside $100 per month. You can break bigger goals into smaller, more manageable milestones.

7 Strategies for Saving Money on an Entry-Level Salary

One thing that can help you reach your savings goals is to adopt a frugal mindset. Think of it as a Jedi mind trick.

1. Have fun—without blowing the budget

Step one is to internalize the idea that you can have fun and live your life well without spending lots of money. For instance, you can:

Choose free activities and nights in with friends over restaurant and bar outings.
Take up virtually free hobbies (that might even pay!) like outdoor exercise, visiting nature parks (how many birds and plants can you identify?) or DIY projects such as upcycling furniture.
Look for free and affordable activities and experiences in your community, such as outdoor concerts or events at the library.
Boost your chef skills and cook at home instead of eating out.
Make shopping smart a winning game by using coupons, hunting down discounts and visiting thrift and bargain stores. Think of the future bragging rights on that incredible $3 lamp you scored.
Be subscription wise by only paying for those you actually use.

If there's something you want that's out of your budget, that's where a micro-savings project comes in. The extra wait will make finally receiving that item feel extra sweet.

2. Increase your income

Another way to help reach your savings goals is to boost your income. That might mean monetizing hobbies or skills as a side hustle or taking on freelance or gig jobs outside of work. Or it might mean getting a salary bump—either through a promotion or a raise—or through a new job that pays more.

3. Pay yourself first

Remember: If you want to reach your savings goals, you need to pay yourself first. Treat your savings like a fixed monthly bill that must be paid. To make this easy, you can set up automatic transfers from your main bank account to a savings account.

4. Be strategic to build wealth

The little things do matter when it comes to financial health, but the big things matter even more. For example, you can save huge amounts of money by doing without a car and instead biking, walking or taking public transit. And while buying a house is a path to financial security for many people, it's also a very pricey endeavor.

To build wealth on a limited salary, you need to be strategic. Consider things such as:

Housing: As a renter, keep costs low by choosing more affordable neighborhoods and splitting costs with roommates. If you do decide to buy, be sure to stay within your means.
Transportation: Owning a car can be convenient, but it can also take up a hefty portion of your budget. Depending on where you live and what alternatives are available, it's worth running the numbers on how much you could save by doing without. It's surprising how much cheaper the car-free life can be, even if you use the occasional rideshare or purchase an e-bike instead.
Debt: Taking on debt can be a positive thing that helps you reach your goals, but it can also be a drain on your budget. If you have debt, decide whether paying it off quickly is your primary goal or if you can handle letting it linger. Usually, the former is better for higher-interest debt, while payments on low- or zero-interest debt can be balanced with contributing to savings. But everyone's situation is different, so it's worth researching what's best for you.

5. Choose the right savings vehicles

Once you're on the road to saving, the next step is to choose where to put that hard-earned money. Start by making sure any cash you've put aside is earning as much interest as possible, such as through a high yield savings or money market account. Then go deeper into creating buckets for all your savings goals. A good guideline to follow is:

For short-term goals, look for accounts that offer good interest but also easy accessibility and flexibility, such as high yield savings or money market accounts.
For medium-term goals, you can turn down accessibility and flexibility for even better gains, such as through a CD account.
For long-term goals such as retirement, beating inflation and minimizing taxes are the name of the game, which is why investing is key, such as via a Roth IRA.

Choosing the right savings vehicle right off the bat can help you maximize growth, meaning you save even faster. Who can argue with that?

6. Leverage free or low-cost financial resources

Once you're into the savings routine, figure out what to do with your money. While you might not be able to fit a financial advisor into your budget (yet), there are lots of free and low-cost resources to take advantage of. Look for podcasts, blogs and online courses on money management, investing and retirement planning. (Synchrony's blog is a great place to start!)

Also, check if your employer offers anything you can sign up for to help you get further ahead, like discounts on transportation or gyms, or investment matching, such as for a 401(k).

7. Stay motivated and avoid burnout

How well you do at saving and budgeting is all about your mindset. That means starting with a goal that will help keep you on track. It might be building a $1,000 emergency fund, putting aside $500 for a road trip with friends or starting to invest for retirement.

The key is to track your progress: Monitor your savings growth regularly to stay motivated. Celebrate small wins. Every dollar saved matters! At first, you might feel like saving $20 a week is pointless. But that's $1,000+ a year—enough to start building real security.

Find accountability by teaming up with a friend or family member to stay on track, and share your goals and progress with someone who can encourage you. And practice gratitude: Focus on what you have rather than what you lack, and remind yourself why you're working hard to save.

Saving Is Forever

No matter how much you earn, life will keep handing you reasons to save: buying your first car or home, building a retirement fund, helping your kids with college. Learning to save early in your career isn't just smart; it's an investment in your future. Master it now, and you're setting yourself up for lifelong financial success. There's no better time to start than today.

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