To save $10,000 in one year, you will need a solid plan. Your plan may be to achieve a particular financial goal you may have in mind. It may seem intimidating to accomplish this goal in a year, but it is possible.
We will share some tips on developing some smart habits that will help you achieve your goal of saving $10,000 in a year and find some extra money in your annual earnings to put into a regular savings account. In addition, this guide will give balance to ensure you reach your goal without feeling like you must suffer for it.
17 Ways To Saving $10,000 A Year
Below we break down how to save $10,000 a year and to enjoy life at the same time.
1. Break Your $10,000 Goal Into Small Pieces
It is crucial to break the goal into smaller sections to achieve the savings goal of getting to $10,000 in one year. Break the biggest goal into monthly, weekly, or even daily goals to not seem so overwhelming.
For example, the monthly amount you will need to save is $833.34, the weekly amount is $192.31, and if you would prefer to save a daily amount, you will need to put aside $27.40 a day to reach your goal of saving $10,000 in a year.
Once you have these amounts, decide what is most suitable for you to save, daily, weekly, or monthly? You can also save either less or more daily or weekly but ensure that you have reached the monthly target. Saving daily or weekly may be a good idea if you need to work your way up to your average savings target.
A money-saving app is a great way to become budget savvy as it has many helpful details that will help you stay on track. It is crucial to stay focused on your common savings goals so that you can sustainably keep saving without making too many budget mistakes.
Having a boost in savings will help cushion you when you have an emergency instead of withdrawing from your investment account or retirement account. It will also enable you to get high-expense items that you otherwise would not be able to.
2. Map Out Your Financial Journey
To meet your goal of saving $10,000, you need to have a financial journey map that will guide you to achieve your goals realistically. Some of the aspects that you need to look at are what you earn, your needs and expenses, your investments, and anything else that affects your cash flow. In addition, it will enable you to find any extra cash that you may have.
If you find that you cannot get extra cash with your current annual income, think of ways to begin to give yourself a boost in earnings. Some methods are to monetize a hobby such as painting, where you can sell your artwork. Use a financial map to guide you on earning money, taking care of your needs and expenses, and saving towards your financial goals.
3. Change Your Mindset
A famous quote says that the body follows where the mind goes, and the same is true where your finances are concerned. To save $10,000 in one year, you will need to have a mindset that you can do it, and it is achievable. If you tell yourself that it is impossible and hard, you may give up after a short while.
Internal motivation is vital to achieving the goal of getting financial security and financial independence by starting your common savings goals. If you have an unhealthy attitude towards money, recognize it and look at money as a means to help you achieve your personal and financial objectives.
Read books, blogs, and material that will help you change your mind about what money can do for you to help give you the right mindset. It will help you commit to your goals even when it is quite challenging.
4. Save Before You Spend / Pay Yourself First / Automate
Most times, we spend what we earn, then we save what has remained. However, to save your set goal of $10,000, you will need to get into the habit of saving before you have spent any money. Before you pay your bills or spend any money, you put aside the amount you need to commit to getting to your goal.
For example, if you are working with a monthly savings goal of $833.34 per month, when you get your paycheck, deposit that amount into a high-yield savings account, then live on what has remained.
One of the ways to go about this is to save your money when your current income comes in automatically. You can automate saving by setting a certain amount on a date, preferably when you know you will get your earnings or income. You can do this with your bank so that when you get your payments, the savings are automatically deducted and put away in the available savings accounts.
You can also have an arrangement like automating small automatic contribution transfers from your debit card to your separate saving account every time you use it. The amounts can be as small as $5, and you will find that you have saved a good amount at the end of the year without really noticing it. You can gradually increase this amount.
5. Put Together A Simple Budget
A simple budget will enable you to track your average income, your living expenses and help you find where you can get the money to save. The first thing is to write down all your income and expenses preferably on a budget worksheet. Next, have a comprehensive list of all your costs, from regular daily spending to more significant amounts that you may pay off once or twice a year, such as a car insurance.
Budgeting will give you a clear and concise picture of your financial situation so that you can see how to save the target amount. Create a simple budget and ideally have it for one year. The budget calendar for one year will help you achieve your saving goal during this period because you will notice any wasteful spending areas and cut back on them to enable you to save more efficiently. You will also find any income gaps you may have.
6. Decide And Commit To Your Goal
To achieve your goal, you must commit to working on the savings plan you have mapped out and the budget template you have laid out to ensure that you meet your savings objective. In the beginning, you may have a lot of energy to meet the goals, but as time goes by and sometimes you find money tight, you may be tempted to give up or push the goal to the following year.
In the beginning, make a promise that you will meet the goals and commit to that decision. It will help you push through those moments when you want to give up. In addition, you may have a reward system of some sort when you achieve your goal to help you remain focused and committed.
7. Get Serious About Budgeting
To achieve your financial goal of saving $10,000, you must be serious and intentional about budgeting. An excellent monthly budget will help you eliminate wasteful spending and prioritize your most important monthly expenses based on your monthly income. In addition, when you have a budget, it gives a steady guide to achieving your goals.
To meet your daily savings goal, stick to the daily budget. For example, if you have a certain amount you have budgeted for your entertainment, you can’t go out to a fancy restaurant if it exceeds your budgeted amount that day, week, or month. However, you can save to be able to go to that restaurant.
There are various methods to be able to stick to your budget. One of the best is using cash envelope wallets to put the amount allotted for each expense in one envelope. If you run out, you cannot use cash from another envelope. You have to wait for the next time you put money in that envelope.
8. Start A Side Hustle / Earn More Money
Once you have budgeted and realize an income shortfall, and you cannot achieve your savings goals. It may be best to start a side hustle to be able to earn more money. A side hustle can be a hobby that you can monetize, for example, baking. It can also be a skill you do not use, such as driving an Uber in your free time.
You can also opt to start a side hustle to get extra income that will enable you to achieve your financial goals faster. Where you would have saved $833.34 in a month, saving $1000 per month will help you achieve your saving goals in ten months instead of twelve months.
You can earn an extra $1,000 per month by offering your skills or services freelance, you can take online surveys, which takes a short time, and the amount you are paid will add up over the month.
You can also rent out a room in your house if you have extra space that you are not using. These additional costs will quickly add up to at least $1,000 extra cash in your pocket.
9. Cut Unnecessary Expenses
It is essential to cut out any unnecessary expenses to save $10,000 in a year. These are expenses for things that you can live without comfortably. For example, you can buy cheaper products that are good quality instead of more high-priced designer items.
Another way is to reduce your credit card debt by sticking to your budget or using a debit card that will allow you to spend money in your checking account.
Unlike credit cards, a debit card will not allow you to spend excess then pay back the excess amount when you have the money. Therefore, you will find some money that can go towards your savings by cutting back on unnecessary expenses.
10. Avoid Burnout
Burnout may occur if you feel that you are making sacrifices and there seems to be no payoff. It may occur, especially if you have had to make drastic changes to your lifestyle to achieve your weekly or monthly savings goals. Burnout can set you back on your savings journey since you may get to a place where you do not care anymore.
Before you get there, you can do some simple things that will help you avoid getting to the point of burnout, especially when working within a tight budget. When you feel hopeless about your financial goals, talk to like-minded people on the same savings journey and get some encouragement or some financial advice on making the journey easier.
11. Track Your Progress
It is essential to track your savings progress so that if you are falling back, you can get around quickly before it is too late. The best time to start is as soon as you are a month into savings. It is easier to catch up on $50 savings than $1000.
When you realize you have fallen back, check what happened and cover the shortfall quickly to get back on track. Tracking your progress can also help you feel more confident that you are making progress so that the goal does not look so daunting, and it helps you not slack on reaching your $10,000 in a year goal.
You can use visual savings trackers to help you see your savings grow in graph or pictorial form. You can find these tools, apps, or printouts from various sources online.
12. Save Your Leftover Money
After you have paid all your expenses and find some leftover money, it’s tempting to spend that excess money on something you want. But add it to your savings. It will enable you to get to your goal much faster if you are saving additional cash.
However little it seems, the money left over can go a long way in helping you meet your savings goals in a much shorter time frame. If you get some extra cash, such as a tax refund, use it to increase your savings rather than spend it.
13. Celebrate Your Milestones
When you achieve your weekly or monthly goals, you can reward yourself within your budget. These rewards can be thrifty but enjoyable all the same. For example, if you get an increase in one of your new income streams, you can also take a portion of those recent earnings and celebrate by going to a restaurant or buying something for yourself.
In addition, when you celebrate the milestones, it will help you remain motivated to achieve the greater goal of staying on course towards the huge milestone of saving $10,000 in a year.
14. Check For Insurance Discounts
You can save some money on your insurance, whether a car, house, or other types. The first thing to do is to go for more affordable alternatives that will meet your needs. You can increase your deductible amount to pay less in the amount of insurance premium you pay per month but ensure that your budget covers the increased out-of-pocket payment you may have to make.
Look for companies that offer group discounts, or you can ask for discounts and see what you are eligible for and take advantage of those discounts. Some insurance companies will provide you with more significant discounts if you bundle all your insurance with that same company, which may be a better option.
15. Lower Your Cable, Internet, And Phone Bills
To get more money to achieve your goals, you can cut back on your cable, internet, and phone bills. These are recurring services that are not essential but are important. So the first thing you can do to reduce your cell phone bill would be to go for a more inexpensive phone plan—the same for internet and cable.
You can opt for cheaper plans which will help you save money. You can use apps to help you find ways to save money on your monthly payments. You will discover how to negotiate your cable, internet, and phone bill so that you can still get high-grade services at a fraction of the price.
Also, look out for discounts and sign-up discounts that will help reduce your overall spending on these bills.
16. Make Work Days No-Spend Days
When at work or when busy, you can opt to have those days as you will not spend money. It is easier to do because you do not have to pay for anything outside your transportation to work. Plan to save on lunch costs by carrying your meals from home. You can pack your breakfast and lunch so that you do not have to buy any fast food.
No-spend or spending freeze days are great for helping you deal with impulsive spending, which will often upset your budget. It will also help you deal with some of the triggers that cause you to spend. For example, if you are sad, you may spend money to give your mood a boost.
No spending days helps you deal with that to find something else to help you feel better instead of spending money out of your budget.
You will also gain a realistic picture of what you need to spend daily. For example, if you work for five days, you can make at least three out of the five days where you do not spend any money. If you find it hard initially, you can start with one day and then increase the number of days you do not spend any money.
As a result, you will find that you will be able to save some money and have a better approach to spending less.
17. Take Advantage Of Compound Interest With Investing
When you are saving your money, it is better to put it in a savings account such as a high-yield savings account to earn some interest. Compound interest is the best because you will make interest on what you have saved. So, the amount of interest will increase over time because you are increasing the amount of money you are depositing in the account.
The longer it is there, the more money you will earn. It will help you get to your goal faster and earn $10,000 even before a year is over. If you were saving that amount for a particular goal, you could withdraw the $10,000, then leave it in the account and set another goal for yourself.
You will find that you will be able to take advantage of the compound interest and save even more than you thought possible. However, it is important to note that federal taxes are applied to the interest earned on your savings account balances.
What Should You Do With $10,000?
When you have achieved your annual savings goal of $10,000, you will spend the money on the goal you had set beforehand. For example, to put a down payment on a house, you can use that money for that purpose.
However, once you have achieved your goal doesn’t mean that you stop there. Instead, you can opt to set another financial goal, one with a larger balance this time, and allocate a purpose to that goal.
For instance, you can opt to save $12,000 the next year as college fees for your children. Because you have been able to achieve the goal of saving thousands of dollars in a single calendar year, you will find that you are more confident, which will make you feel more hopeful for a larger contribution limit for the following year.
You will also be able to refine the tips and money hacks that you have learned to enable you to get to a much higher annual limit in your savings goals.