Last updated Jan. 31, 2023 by Peter Jakes
Saving $10,000 in one year may seem like an impossible feat for many but it’s possible. Whatever reason you’re saving for, maybe for college or that vacation trip, you need a strategy in place to help you achieve your goal.
How can I save when I don’t earn enough? Or, is it possible to save up to $10,000 on a low income? With the right mindset and strategy, you can achieve your saving goals easily and faster than you think.
First, take your eyes off the big target and focus on the tiny bits that add up to it. $10,000 in a year would break down to $27.40 per day, $193 per week, and $834 per month.
Depending on your income and financial security, saving $10,000 is achievable within a year, or even within six months. Saving $10,000 in a year means you have to keep up with saving $834 every month.
13 Tips to Save Up to $10,000 in a Year
1. Understand Your Finances
The most important tip for saving money fast is understanding your finances. It is pretty simple. If you don’t know how finances work, saving $10,000 in a year will still be a far cry. Learn to budget. Having a budget in place gives you control over your finances. But where do you begin?
Before you can start setting aside this $834 each month, you have to understand how much money you have coming in and going out. What this entails is having a perfect grasp of your monthly income and expenditure.
Your understanding of your finances starts when you do the following:
- For the next 30 days of making this decision, keep an eye on your finances, both your income and expenses.
- Determine exactly how much savings you already have, your general monthly expenses, and the biggest and least expenditures.
- Make a distinction between your fixed and variable expenses. Rent and utility bills, for example, are examples of expenses that are tough to change. Groceries, entertainment, and subscription services are instances of more easily-adjustable spending in your budget.
- If you can find ways to save more money each month, you will be able to reach your savings objectives more quickly.
- Regularly evaluate your progress and make required improvements. If all of this is too much for you, there are a slew of budgeting applications out there that can help you stay on track check out this article on How to make a budget in 6 Easy steps.
2. Go on a Spending Fast or Diet
Choosing to observe spending fast for about four months within a year can help you jump-start your savings. It also helps you reach your goal faster. As its name depicts, spending fast is when you limit your cash flow by abstaining from spending or shopping on some items.
You get to choose how your spending fast works. Some people reduce their spending to the basic needs such as gas and food prepared at home while some still allow themselves to eat out and watch their favorite TV shows — whatever works for you.
This spending diet or fast’s purpose is to make you aware of areas where you are wasting money and what expenses you can do without. It also helps you simplify your life and spending habits, reducing your expenses while allowing you to save more.
3. Cut Down Your Bills
Saving $833 per month might not be plausible with your current net income — left over after bills and taxes have been removed. However, you can free some extra bucks if you’ll take the time to evaluate your expenses and trim out unnecessary spending.
It’s time to contact your network provider to negotiate your phone bills. You’ll save a lot by stopping billings on phone services you rarely use. Another area where you can cut down expenses is car insurance, especially if the car being insured is a beater.
Rent is another huge expense that people spend most of their earnings on. However, if you’re open to accommodating a roommate, you’ll be able to spare some money. Alternatively, you can opt for a cheaper place than you currently live in to free some cash on your budget.
4. Create a designated savings account
To save money quickly, you need to separate your daily spending from your savings. This entail means setting up a dedicated savings account.
As a result, you reduce the risk of having to dip into your savings in order to pay for your everyday needs. Instead, it motivates you to stick to your daily spending limits while also safeguarding your retirement funds.
5. Start Cooking at Home
An average American household spends over $1,000 a year eating out. If you do the math, you’ll realize that by simply eating more meals at home, you can easily attain your $ 10,000-a-year saving goal faster.
Those regular lunches and coffees through the drive-through can add up to a lot, even if you don’t eat at a fancy restaurant every week.
To motivate yourself to start packing your lunches from home, think about how many calories would be freed from your waistline due to a simple decision to stop eating outside more often. Now is the perfect time to learn how to cook your food.
6. Reduce Your Entertainment Costs
Being a social butterfly can be fun but it also comes with a lot of expenses on outings with friends, which can rack up to a few hundred every month. The Lyfts, admissions, happy hours, and brunch can easily reach $300 in a month without you realizing it.
You don’t have to stop going out, however, limit your monthly spending on entertainment. For instance, allocate $50 to entertainment per week. It can be uncomfortable and you might have to cancel some outings but it’s a worthwhile price to pay for your saving goal.
Sooner or later, you’ll find indoor activities with friends such as game nights or potlucks, can be more fun and relaxing. It also doubles as a budget saver. Comprising and keeping to budget-friendly things would help you save and reach your 10,000 in-a-year goal faster.
7. Increase Your Income
An undeniable fact is that most people can’t spare $833 a month from their net income even after cutting down expenses. Another approach to having more to save is simply increasing your income.
Ask for that raise at work, get a side hustle, and develop a new skill. By increasing your capacity to earn, you’ll have more to spare (more money coming in means more money you can save).
8. Automation Is the Way to Go
Automating your savings is among the best ways to ensure you reach your savings goal without the risk of you spending your savings. You can only spend money that’s accessible.
Set up a savings account with any bank of your choice and specify the details and criteria for the automatic deductions. Click here to see some of the best savings accounts with the highest interest rates.
For a start, you can schedule a small amount out of your paycheck to be automatically withdrawn into your savings. You can then increase it gradually later on to meet your target. This way, it doesn’t require much effort, discipline, or willpower.
9. Start a side hustle
You can significantly increase your goal of saving up to $10,000 by taking up a side job. What this means is anything from working at a bar or restaurant after work, getting some freelancing gigs, or even taking on some pet-sitting responsibilities.
Put all of your side hustle earnings into the designated savings account if you can afford to do so. But watch out for exhaustion. Saving money isn’t as important as looking after your mental well-being.
10. Sell Items You Don’t Use Anymore to save $10000 in a Year
There are chances you’ll have items in your house that are rarely being used. If you’re looking for an easy way to boost your savings, try selling unused and unneeded items around your house.
Just because you no longer use them doesn’t mean they won’t be of value to another person. Things like furniture, tools, books, electronics, or clothes can be resold for a decent price online. Take a tour of your surroundings and you’ll find lots of items you can sell.
The good news is that you can easily sell this stuff online. Online platforms like Craigslist, the Facebook marketplace, and eBay, are home to people looking for the item you’re trying to sell.
11. Cut back on rent
When it comes to meeting your $10,000, slashing your rent is one of the quickest ways to do so. If you’re currently living alone, moving in with a roommate is one of the most straightforward options. As a result, you’ll pay less than half of what you’re currently paying in rent if you live with two additional roommates.
A three-bedroom apartment renting for $1300 a month could save you $650 per month by adding a new roommate. You’d save about €870 a month by moving in with a roommate. Almost $10,000 per year!
For those who already share an apartment, consider moving into a smaller room. The size of the room you’re renting usually determines how much you pay in rent, so you could save a lot of money each month. To make matters even better, it may also inspire you to downsize and make some extra money by selling your unwanted items.
12. Get out of Debt
You don’t want to save the $10,000, so you use it to pay off your debts instead of investing it. Savings should not be tied to any expenditures, such as rent or debt, and thus, they should be separate. Get out of debt.
You’ll probably want to pay off any outstanding debts before you begin saving. The more time you put off paying off a debt, the more it grows in size. In part, this is due to interest, the fee you pay for borrowing money. You could lose any money you’ve managed to save if you put off paying off your debts.
13. Always Celebrate Your Saving Milestones
While you’re on your way to your “$10,000 in a year” goal, remember to always celebrate the little victories on the road. This will help you maintain focus and promote your self-motivation.
You can reward yourself for reaching a saving milestone. For instance, ordering takes out to celebrate reaching $500 or watching a movie as a reward for saving $1,000. This reward makes saving fun. Then it is less likely you’ll get bored or discouraged to save.
Thanks for reading through to the end. The above seven tips are guaranteed to help you during your “saving $10,000 in a year” journey.
In the end, personal finance is all about your mindset. The mindset some people have about money prevents them from even trying to save. Hence, they hide behind false money beliefs and create an excuse that prevents them from saving. Everybody has some of these beliefs, but now you know better.
Never forget the main reason why you decided to set the audacious goal of saving $10,000 in a year. Want to fund a vacation trip? College fund for your kids? Was it to save for retirement so you could retire early financially independent? It would help you stay focused.
Know that you’re worth it, whatever your reason for saving is. There’s nothing bad in prioritizing your desires and needs first. It doesn’t mean you’re greedy or selfish. By placing yourself first, you’ll be able to become the best version of yourself and be in a better position to help others.