Learning to save money can be a most rewarding experience. There is simply nothing to compare to having money in the bank when you need it. Savings can cover many emergencies and unexpected expenses. It provides financial independence that prevents you from having to borrow from friends and family, take out a loan, or use credit cards. Therefore, learning how to save $10000 in a year will be a game-changer for your financial well-being.
“Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”Thomas J. Stanley, PH.D., William D. Danko, Ph.D., authors of The Millionaire Next Door.
How to Save $10000 In A Year
Saving $10,000 a year for several years will afford you a fully-funded emergency fund, down payment for a house, to purchase a low mileage used car, a vacation, or a special item purchase. Or simply peace of mind that comes from being financially independent.
How to save $10000 a year breaks down to:
- $27.40 per day
- $193 per week
- $385 every two weeks
- $834 per month
I would skip the daily and monthly amounts. Those amounts are not sustainable. Every day will become a chore and it is easy to forget a once-a-month transfer. Also, I am not a fan of saving plans with different amounts weekly. This will require me to think about saving and then I might not. It is so much easier and more efficient to do a set amount to be automatically transferred weekly or bi-weekly via your paycheck or through your bank with an automatic deposit. Hence, setting it up to coincide with your payday will make this process painless. So set it and forget.
How to Save $5000 in a Year
If $10000 is a challenge for you. Let’s start with saving $5000. There is still a lot one can do with $5,000. Consequently, it can still give you peace of mind knowing you have something saved. This can be your first savings goal towards having a fully-funded emergency fund. Read Emergency Fund Savings to learn more about the importance of an emergency fund.
Saving $5000 breaks down to:
- $13.70 per day
- $96 per week
- $192 every two weeks
- $417 per month
How to save $1000 in a Year
If you are a newbie to saving. Let’s start with a more realistic goal.
- $2.74 per day
- $19 per week
- $38 every two weeks
- $83 per month
Starting small and getting some quick wins can get you addicted to saving. Also, if you are still trying to pay off your debts you should have at least $1000 in the bank to cover unexpected expenses so as not to have to use credit or borrow from family and friends. Ergo, learn how Being Financially Sound leads to financial independence.
How to Save $10000 – Create a budget
You are going to need a budget to save. You will need to keep account of all your expenses to save. This is how to save $10000 in a year. Hence, you will need to write down all your income and your expenses. Once the bills are accounted for review what is left. If you have available cash left over to save that meets your saving goals then you can begin saving. Start by setting up your automatic deposit weekly or bi-weekly. Let me repeat, this should be in the form of a direct deposit of the same amount each week or bi-weekly done by your bank or through payroll. Then create your savings goals and make them part of your current budget. Consequently, savings should always be part of the budget. Therefore, the budget becomes the savings plan and your financial goal for the year.
How to Save $10000 in a year – Is the goal
When saving is your goal, it takes priority over everything. You must consciously decide that you are going to complete this in a year. No matter what. You may have to say no to some purchases or events that you may want to participate in. However, you must stay the course because having savings is a financial game changer.
Here are some free budget tools to help you achieve your financial goals. First, is a free pen and paper version of my free Budget Planner or the Google Docs link to help you create a budget using a spreadsheet. Also, here are some digital apps to teach you how to budget by following their step-by-step guidelines during the set-up process. Check out EveryDollar.com (Free), YNAB (Fee), Pocket Guard (Free), Marcus (Free), and Good Budget (Free).
How to Save $10000 In a year – eliminate Debt
It is very difficult to save when you have debt. I would save $1,000 first and then tackle all debt. This is one of Dave Ramsey’s steps to financial freedom. Understand, debt drains your current and future income. It can make it almost impossible to save. Therefore, working to eliminate debt either using the snowball method or the debt avalanche method should be your second step. Then begin saving the $5000 or $10000 for your emergency fund first and then special purchases and financial peace.
Cutting Big Ticket items is How to Save $10000 in a Year
This may seem impossible but there are some cuts you can make to some big-ticket expenses that can help you to save $10000 a year. Take a look at your housing, food, car note, and insurance and see if there are any adjustments you can make. Reducing costs here can go a long way toward how to save $10000 in a year.
If you own your home you can refinance to reduce your monthly payments. Keep your escrow account up to date so as not to increase your monthly mortgage significantly. Consider downsizing if you are currently living in too large a home. Finally, get a roommate to reduce costs in your apartment or move in with a friend or relative. My son came home to pay off debt and save his first $10000.
Food is a variable expense that can drain a budget if you eat out a lot. Therefore, start by bringing breakfast and lunch to work. Suspend dining out unless it is for a special occasion. Also, opt for potluck dinners versus hosting entire dinners. Do your grocery shopping online so you will know how much you are spending before you pick them up or have them delivered. Hence, it will control impulse shopping for extra items that derail most food budgets. There is a nominal fee for this type of grocery shopping, but it is far better than buying ten extra items on impulse.
Based on your driving needs eliminate your second car or the one car you own. My son recently moved to an urban city and with the headache of finding parking and avoiding parking tickets owning a car was more of a headache. Besides the convenience of public transportation, it was an easy decision for him. Thus, he saved a lot by eliminating tickets, his car note, and car insurance. Therefore, he had an instant $400 a month to add to his savings.
Also, consider refinancing your car note. If you have been making all your payments on time and your credit score is good or has improved to good then refinance. You should re-negotiate to a lower interest rate with a shorter term that can save you money.
With the current price of gas, your only alternative is to drive less. Find fun and interesting things to do at home or within walkable distances. Try carpooling and combining errands to save on gas. Find other alternatives to getting around like walking or riding a bike.
Other Bills to cut or reduce to help to save
Cancel Cable and buy an antenna. Also, find streaming services less expensive that meet your needs.
Netflix, Hulu, Prime Video, Apple TV+, Disney+, and Discovery+ all are excellent alternatives that are way cheaper. The trick is to sign up for all the free subscriptions and cancel the ones that are not of your interest before they begin to charge you. This is a great way to watch what you like and reduce your budget at the same time.
On the other hand, review current subscriptions and cancel whatever you are not using regularly. This may include other forms of entertainment i.e., music subscriptions or gym subscriptions. If you are not using it then lose it.
If you can’t give up cable yet, then review the bill and delete items you don’t watch and any added charges that you do not need. I recently did this and saved about $30/month or $360/year. Negotiate a retention bonus that renews every year and remember to call and renew it. You can save an additional $10 to $30 per month.
Always review all your current bills and then look for cheaper services. Especially car insurance. Cheaper rates are always offered to new customers. Rarely are they offered to current customers. I search every year before I renew. Getting quotes costs you nothing but a little time. Try these quote engines to help you. InsuranceQuotes.com, TheZebra.com, and Experian to name a few.
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This is a big step
Cancel the debit card for the savings account. You do not want easy access to this money. The idea is to save it and forget it. Allow yourself to review it for motivation but not for opportunities to spend it. Therefore, for most this is a big step towards financial independence and it is how you save $10000 in a year.
Increasing your income is how you Save $10000 in a year
- Ask for a raise
- Apply for a promotion or transfer to another department or division at work
- Learn a new skill to get a higher-paying job.
- Request overtime or pick up another shift
- Find a part-time job
- Get a side gig like uber, Lyft, or doordash
- Start an online business using your current skills to train others
- Sell stuff you no longer need online to Depop.com, Plato’s Closet, ThredUp.com, Poshmark.com, Tradesy.com, Ebay.com, BuffaloExchange.com, or simply host a good old fashion Garage Sale.
- You can also buy cheap from Goodwill / Salvation Army and resell them for a profit. Great source of steady income.
Be Motivated by How to Save $10000 in a year
Check your account weekly to be motivated by your progress. However, you can also use a physical tracking system where you can check off your progress weekly. Post where you can see it daily to track how close you are to completing this goal. Here is a Savings Tracker to download to help you. Therefore, take joy and pride in your accomplishments. So please use this free printable to track your progress. I hope it motivates you to keep on saving.
From time to time you may receive some extra money via a bonus, gift, or a tax refund. To speed up your saving goals toss it into savings rather than spending it. Also, any left-over money from your monthly budget due to cost-cutting or less spending should be tossed into your savings. You are in a saving zone, not a spending zone. Stay focused. Hence, this is how to save $10000 in a year.
Learning how to save $10000 Can Lead to Becoming a Millionaire
Many of today’s millionaires are regular everyday people. They did not receive an inheritance or win the lottery. They simply saved and invested their money. Living below their means while consistently spending less. They did not always buy new cars and expensive items to prove their wealth. They are simply wealthy because they saved their money.
- Eight out of 10 millionaires invested in their company’s 401(k) plan.
- The top five careers for millionaires include engineer, accountant, teacher, management, and attorney.
- 79% of millionaires did not receive any inheritance at all from their parents or other family members.
Starting with your first $10000 building on to reaching $100000. Then push for $250000. Proceed to $500000, then $750000 until you finally reach $1000000. You can reach this goal with a combination of savings and investments. Start with a high-yield savings account and a retirement fund. Either an IRA or 401k (from your job) or both. These are the low-hanging fruits of building wealth. Besides, most companies offer a matching percentage of 3 or more. Don’t leave free money on the table. The trick is to be consistent and think of this as a marathon, not a sprint. You are in this for at least 30 years. Therefore, this is how to become a Millionaire. No magic here.
How much do most Millionaires make?
The average salary for most millionaires is $70000 to $80000 which is about $37/hour. Even if you are not currently making this amount you can still become a millionaire by investing in your 20s until you are ready to retire. However, it is never too late to become a millionaire. You just may have to save a little more if you are in your 30s or 40s.
Final thoughts on How to save $10000
Saving money when you want to have fun is not always easy. I assure you that the freedom that comes from having money in the bank and not owing creditors any of your money is true financial peace.
Recap of How to Save $10000 in a year
- Decide whether you can save $10000, $5000, or $1000 this year
- Create a budget that includes saving
- Set goals and stick to them
- Pay off any outstanding debt
- Cut expenses
- Generate additional income
- Save any extra funds
Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.Proverbs 13:11 (ESV)
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Let’s Budget, Spend, and Live!