Whether you’re looking to ramp up your emergency fund, travel around the world, or get a brand new car, $10,000 is always welcome.
The first month of the year is a great time to put some goals into perspective – so get on to mapping out your savings plan right now. How about a challenge?
What if I told you there are ways you can end the year with $10,000 in savings? If you think saving $10,000 is hard, you’re right – but it’s possible. It’s merely a matter of priorities.
People who save $10,000 in a year aren’t magicians. They use plans, common sense, and are highly motivated. Find what motivates you to work towards this big savings goal. Is it a trip, a safety fund, or a genuine passion for saving?
Once you find your why it gets easier. You then need to divide your goal into smaller milestones and try to contribute towards it each day.
I’m stubborn, which has gotten me into trouble as a teenager, but it helped me a lot with personal finance as a young adult. I hate to admit defeat, so setting a savings goal and telling people around me about it was my main drive.
If so many people on the internet could do it, what’s stopping me?
A month-long trip around Thailand was my primary motivation for a full year of saving. It wasn’t possible to do it with my usual vacation budget, so I committed to saving enough to realize it in a year without getting into debt. I knew if I don’t reach the goal, there’s no trip to Thailand. And I didn’t want that to happen – I’ve already bought the perfect swimsuit!
Long story short, I managed to reach my goal with lots of effort, imagination, and grand plan. There are so many materials available like apps, printables, and planners you can use to track your progress. They helped me stay motivated and on track.
The best way to save $10,000 in a year is to find your drive, divide the sum into monthly, weekly, or daily goals. Meet the daily goal and track your progress every quarter. Try to live below your means, cut unnecessary expenses, don’t make any large investments, and look for a side income.
Pay Yourself First
No matter how you get paid, set up an automated transfer from your checking account to your savings account. If you divide $10,000 in 12 months, you need to save $833. So if you get paid monthly, set an automated transfer to $833 as soon as your salary hits your account.
Paying yourself first is essential because it teaches you how to live on the rest of your salary. If you earn $3,500, you could save $833 a month and manage your bills and personal expenses with the other $2,667.
You’re less likely to put those $833 aside 20 days after you got your paycheck. By paying yourself first, you make sure the savings goal is met before you spend money on anything else.
Write Down All Your Expenses
Write down everything – even those $2 you used to buy a candy bar on your way home. Every time you reach your wallet, reach your tracking app too.
Saving $10,000 in a year equals to saving $27,39 a day. If you avoid indulgences that don’t necessarily improve your life quality, that goal becomes more comfortable to reach.
Using an app to track your everyday expenses can be eye-opening. I would’ve never guessed that my major daily expense was food!
Find Ways To Earn More
Only 19% of Americans think they’re paid enough in their workplace. Are you one of them or the remaining 81%?
If you’re part of the second group, try to negotiate your pay. If there aren’t opportunities to earn more on your current post, think about going back to school. It doesn’t have to mean a master’s degree, but a course for another skill that can increase your job market value.
Did you know that millionaires have, on average, 7 streams of income? Well, I didn’t, but it makes sense.
Giving up $833 of your only paycheck might seem too drastic if you consider yourself underpaid. Creating another stream of income and contributing any profit to your savings goal is not only smart but saves you time and effort too.
Think about active income like weekend gigs, pet sitting, dog walking, freelancing, or turning any hobby into a job.
You can generate a passive stream of income like affiliate marketing, blogging, investing in a dividend stock, or renting a spare room on Airbnb.
The internet is full of opportunities; you can enroll in a free online course and learn a new skill that can bring you money!
Try A No-Spend Challenge
I love challenges. Especially if other people I know are included, I tend to turn it into a competition.
A no-spend challenge is simple; create a spreadsheet with the days of the month and check out every day you spent no money. Aim for 10 no spend days a month. How would you do that?
Pack your work lunch if you work in an office that tends to order take-out every day, brew your coffee at home, walk to work if the distance allows it, and don’t stop at any convenience store.
While I have the perk of free coffee and snacks at work, I love a hearty lunch. It was hard for me to cook in advance what I might crave the next day, so I made an extra portion for dinner and packed the rest for lunch at work tomorrow.
If you find the daily no spend challenge easy, take it a step further. Try the no spend month challenge; that’s the ultimate patience and self-control test.
You can buy only replacements for hygienic and cleaning products and ingredients to cook with – not full meals, no eating out, no coffee shop strolls, no packaged snacks.
You are not allowed to spend money on entertainment, clothes, or any other luxuries.
The money you’ll save with a no spend month will motivate you to try it at least once again during the year.
Save Money On Bills
Utilities are known to be eating up our budget, so why not try and tackle that field?
Many of us are not aware that you can negotiate every bill, from an internet service provider to medical bills. Look for discounts, loyalty benefits, etc.
Go over your electricity bill, see if you can switch to gas, and check for any leaking faucet that might be increasing your water bill. Turning the water off while you brush your teeth is not only environmentally friendly but can also save you a couple of bucks a year.
Skip Eating Out
Cooking can be a hassle. I love it, but I’m not in the mood to cook every day. That’s why we used to order in or go out to eat more than three times a week.
Ordering take out takes the worry away, and it’s comforting. But it’s counterproductive when trying to save $10,000 in a year. So I found the same comfort by meal prepping our dinner.
Cooking a batch of our favorite lasagna on a Sunday and having it for dinner two night a week seems like a treat. Overnight oatmeal takes less than 5 minutes to make, but it saves my mornings, while salads in a jar are great on the go lunch.
Three take-out or restaurant dinners a week can cost you more than $100; multiplying it by 52 weeks, you have saved $5,200 with minimal effort. That’s half your goal for the year!
Take Care Of Yourself
While trying to tackle your financial goal for the year, don’t become an overachiever.
Taking up a few side jobs while cooking every day and walking several miles to work can lead to burnout. You might end up quitting and spending an unhealthy amount in a day or develop health problems.
Don’t set yourself up for failure; instead, pat yourself on the back for starting this journey. For each milestone you reach, enjoy a fun night out, a weekend getaway, or a small splurge once in a while.
Swap (Almost) Everything
Can you think of a shirt, pair of jeans or another piece of clothing you bought but never wear? Well, I can recall at least 5 in this moment, and that’s a shame.
Go online or let your friends know what you have and don’t use. You can arrange to swap it for something you might need or sell the items you never use.
The average American household spends $3,000 a year on clothes, toys, books, and furniture. That’s an enormous amount that can be easily avoided for a year
Hit up some garage sales or Facebook Marketplace if you need a new piece of furniture. You can even take an old piece and make it a weekend project to flip it. Free entertainment for the whole family!
Put Out A Savings Jar
Each day when you come home, empty your pockets and wallets from any spare coins. Put that money into a savings jar and don’t touch it.
Or you can make it a challenge to save every one-dollar bill that reaches you and put it in the jar. You might be surprised at the amount that can be accumulated in a year, with no effort at all.
Final Thoughts
The best way to save $10,000 is to educate yourself more about personal finance. You’ll realize your mistakes and create a better future.
The awful truth is that almost half of the US population can’t cover a $400 emergency. They live paycheck to paycheck and don’t even have an emergency fund.
A $10,000 savings is a fantastic jump-start into personal finance. You can get funds for an emergency savings account, invest in some stock, and max out your retirement fund.
Once you reach this goal and experience financial freedom, it becomes addicting. So set yourself for success with a great plan and motivation. Get your closest friends, family, or partner on board, and they’ll thank you later. Make 2021 the year of your financial awakening!
What are your 2021 financial goals? How much do you plan on saving? Let’s discuss!
