One of your own personal goals might be to save $10,000 in a year. It’s a pretty big sum of money and can be a huge milestone for you to reach.
And saving this much money can be perfect for your rainy-day fund, to use towards a large purchase like a house, or maybe for something else you want to save for this year.
While saving five-figures can seem pretty daunting of a task at first, reaching $10k saved is much more attainable than you might initially think.
However, if you want to save this much in a year you will have to breakdown your income and put a plan together that you’ll stick with.
Now pending your finances and income, you might find this process will take you the full year in order to save this much. Or you might even be able to save $10,000 faster than a year (and even save more!).
Here are the simple tips to help you reach this savings goal.
Breaking Down $10,000
Before you get started or put your plan to save $10k in 52 weeks together, you should spend a few minutes breaking down that amount.
Seeing that much money can be a bit intimidating, but if you work out the math into smaller increments, you’ll realize it’s not as scary as you think.
For example, if you break the $10,000 into monthly, you are looking at $833.33 per month. Now, that is also quite a bit of money to save per month too. And honestly, when I first was saving for my first $10k, that was definitely a bit nerve-wracking.
But since many people are more visual, you can break this out further to show smaller dollar amounts.
If you are paid b-weekly from your job, for example, that equals roughly $384.61. And if you broke that down to daily, you’d be at $27.39 per day.
Not as scary, right? Certainly saving five-figures in a year won’t necessarily be easy but breaking it down and understanding what it takes can help you ease into this process.
|Saving $10,000 In A Year||How Much You Need to Save|
Tips to Help You Save $10,000
So now that you see some numbers, what next?
It’s time to follow some essential tips that will help you save $10,000 this year (or even in less time, if you want to be more aggressive!).
1. Change your mindset
I very much believe that in order to achieve saving $10,000 in a year, you have to focus on your mindset. Meaning you not only need to believe you can reach this goal but finding ways to manifest money. Meaning, you are thinking positively and visualize yourself obtaining this goal.
What holds most people back from financial success, is their mindset and attitude towards money. Start looking at money as a tool and create a plan for yourself to succeed. You may have setbacks, but you can’t let that deter you.
Commit to saving $10,000, regardless of how easy or challenging it may be. You’ll figure out what you need to do and be more aligned with reaching this milestone.
2. Put together a simple budget
If you have read other material on this site, then the idea of a budget may sound like a broken record. But the reason this is repeated so much is that it is THAT important when getting started.
Organizing your spending, savings, and figuring out where you can save is not always fun — but it’s necessary!
When you have a savings goal of $10k in a year, your budget will be a guide and help you reach that number. A budget helps you catch wasteful spending, where expenses can be lowered and will show you where any income gaps might be.
If you need more tips, I suggest reading the budgeting 101 guide to help get you started.
3. Review your expenses rigorously
So if you use a budget or budget calendar, you’ll be able to monitor your expenses. But, you’ll need to take it one step further pending your current income.
Since how much you can save might be more difficult if you already are on a tight budget, you need to be on top of your expenses more aggressively.
Your big three expenses typically are housing, transportation, and food. So that is a great place to start! But you might also need to do other things where that extra amount can be put towards your savings.
- Negotiate lower bills. You’d be surprised how much you can save on utilities, entertainment services, etc. just by giving the company a call. If you are in good standing, long-time customer, and are polite — many of the customer service reps will happily work with you. You can also use a service like Trim or Billshark to help.
- Can you cut significantly on the big expenses? With a mortgage, there might not be much you can do, but if you are renting is it possible to move somewhere for cheaper rent? Can you drive less, so you aren’t spending much on gas or car maintenance? Are you monitoring grocery bills, couponing, etc.?
Not everything above is realistic for everyone and you might not see massive savings. But it’s a good place to start and helps you think more frugally as you save $10,000 this year.
4. Pay yourself first
Another important tip that can help get in better saving habits is the pay yourself first rule. It’s very simple and it’s surprising how obvious this concept is, yet so easy to overlook.
Essentially, as soon as any income hits your checking account, you are immediately moving a set percent or amount towards your savings and/or your investment accounts.
The goal here is that before you pay any bills or touch the money for spending, you’ve saved it.
Simple, right? One way to make this process easier is to automatically save a set amount on specific days. This automated rule is something pretty much every bank can do. Now you aren’t tempted to spend first or use that money and are putting money away consistently on a recurring cadence.
Just a few years ago, this idea seemed so glaringly obvious, yet I was not doing it either! As soon as I learned about this, I immediately made changes and have not looked back. This has helped me save a year’s worth of living expenses.
5. Earn more money
If you have looked at your budget and run the numbers, you might realize that saving $10,000 in a year will be difficult. It is a lot of money and pending your income, it might just not be feasible to put away $800+ per month.
However, before you quit on this goal, you can look at putting a plan together to make more money.
Even if your salary affords you to save $10k, you might want to earn extra money anyway to lift the pressure and even reach this savings goal sooner!
Fortunately, we live in a time where there are lots of ways to make more or generate extra income with a side hustle. So what can you do? Here are a few things you can this year:
- Ask for a raise and save the increase.
- Switch jobs and negotiate a higher salary
- Freelance or side consulting gigs if you have a specific skill
- Take part in the gig economy (Uber, DoorDash, Instacart, etc.)
- Flipping items for profit, like thrift store flipping!
- Start an online side business (note this can take time to make money, so might not be the best viable option if you want to save $10k in a year)
How can I save $10,000 fast?If you want to save $10,000 faster than a year, then the best way to do so is to dramatically increase your income. Meaning you need to boost your salary and save the difference and hustle to earn side income that will help you save quicker.
6. Track your progress
Any time you set goals for yourself, it’s highly important that you continue to track and monitor your progress.
It’s fairly easy to set a financial goal like saving $10,000 in a year, but you need to keep tabs on where you stand each week, each month, and even each quarter.
How you track your progress might vary from someone else, but do what makes the most sense for you. By tracking, you’ll be able to see where you stand and if you need top pivot somewhere because you are falling behind a bit.
Some ways to track your progress can be using a personal finance app or software. There are tons out there, for example, you could use Personal Capital (it’s free to use) along with your budget and banking account.
Or you can go back to basics and use a spreadsheet with some color-coding that can be used as your personal progress tracker.
7. Celebrate each month or milestone
While a year does go fast when you are starting fresh, twelve months appears to be a long journey. And it’s easy to be excited and gung-ho when you start, but quickly your interest might wane, or boredom sets in.
To combat being bored and help you stay motivated, find ways to celebrate your efforts and progress. Naturally, you are looking to save money, but find ways to treat yourself at various milestones. Maybe you do something simple at the end of each month or when you hit specific targets every $1,000 saved.
These celebrations give you something to look forward to, keeps the process somewhat interesting, and can be fun pending what you do. However, you choose to celebrate, be conscious of your budget still, and don’t let it derail you from your ultimate savings goal for the year.
Saving $10,000 in a year is no simple task but can be a huge milestone for you to achieve. And hopefully, it continues to motivate you to keep up good financial habits and want to save or invest more money.
When you breakdown this amount, cut expenses and put a plan in place — you’ll find that saving this amount of money is truly achievable. Yes, you may have to put in more work than others but satisfaction from your efforts will be worth it.
Lastly, don’t worry if you run into challenges, I always say to embrace the setbacks! These are great learning moments that can still impact your future decision-making when it comes to your money.