Saving money will never go out of style. At best, you will have enough money to ensure that you enjoy a blissful retirement or make a down payment on the home of your dreams. At worst, you could end up with extra money you have no use for. However, it is inconceivable that having more money can be a problem for anyone.
When saving, it is indispensable to have a target in mind. Hence, you may want to consider saving 10,000 dollars. A timeline is also crucial, so setting the bar for one year is a goal you can work towards.
You should indeed set as a target only what you can accomplish. However, it would help if you did not get discouraged before starting. Regardless of your monthly income, it is possible to hit $10,000 in a year. So, if you need some motivation to start saving money, keep your eyes on the extra cash you will be making.
If you’re looking to save $10K in a year, you’ve come to the right place. This guide will dive into the various steps to make $10,000 in a year. Most of the suggestions are commonsensical and practical. Ready to learn? Read on to start saving!
How To Save $10K in a Year
Saving $10K in a year sounds like a giant leap, but it is entirely possible. Below are a few options you can follow to save $10,000 in your bank account by the end of the year.
Be Definite About Your Savings Goal
As you must have realized, the path to financial independence is economic savviness and financial discipline. One of the indicators of that is savings. The first step crafting a savings goal and going on a minimal spending freeze. A savings goal serves as a roadmap. It tells you the target you wish to hit and how to achieve that feat.
Thus, having a savings goal is an excellent personal finance habit to pick up and imbibe. Some may wish to save $1,000 in a few months; others may have a more physical goal like saving for housing costs. Deciding on your financial plan is one of the essential steps to take.
Thankfully, at this point, you already have a savings goal in mind. However, looking to save 10,000 dollars in a year can seem like a tall order when you consider the things you are regularly spending money on. This is especially the case for people who do not have so much money or have a lot of dependents.
Breaking the colossal sum into bits is best to make it a lot easier to navigate. Hence, you can decide to get a monthly savings goal or even a weekly savings goal. Then, calculate how much you will need to save per month or week to hit 10,000 dollars before the year runs out.
Bear in mind that the earlier you start saving, the easier it will be to reach your goal. However, you will have less money to save when you start on time as the months go by.
Open a Savings Account
If you do not have a bank account already, you will have to open one if you intend to save $10,000 in a year. There are several savings account options to explore, but the best is a regular or high-yield savings account.
The chief attraction of a savings account is that you get to earn interest. This could even be a means to be making money periodically. With other bank account types, you get charged fees. You should not save money in a checking account. You will be losing instead of making more money.
A savings account is further attractive because of the possibility of your money compounding over time. If the 10,000 dollars is your retirement savings, you will benefit from the compound interest a savings account affords you.
As a loyal customer, you could even be eligible for bonuses unavailable to others. This is asides from the compound interest the account yields to you. Note that high yield savings accounts from online banks offer more interest than traditional banks and have zero monthly maintenance fees.
Also, depending on your need, you may need a separate savings account. For example, if you have other goals aside from the $10K, you’ll need a separate account for it.
Spend Less From Your Checking Account
You cannot aim to improve your savings if you spend too much on unnecessary expenses. Thus, the goal of saving $10K in one year will remain a mirage, except you get some grip on your spending and stay on a tight budget. You have to cut down on your biggest expenses to hit your savings target.
Granted, cutting down on how much you spend on living expenses can be quite a hassle, given the current realities. For example, a 2019 report shows that the average household spends $4,400 on food. This is significantly high.
In addition, most people have to pay utility bills (e.g., your cell phone bill and internet service), car maintenance, car payments, insurance premium, entertainment costs, bear the cost of transportation, and several other monthly expenses.
However, cutting down on your spending is not tricky. It requires the development of good financial habits and discipline. Thus, the first thing to do is go through your expenses with a fine-tooth comb and eliminate all that isn’t essential.
Then you may also want to reduce how often you pay for items or make online purchases with your debit card. Finally, you can designate some days to be your spend days. Outside of those days, you will not spend money. Doing these will help you to effectively cut expenses.
Use a Savings App
Using savings apps is almost indispensable for target saving, such as saving 10,000 dollars in a year. A saving app primarily helps you to save money.
However, each one can have unique features. For instance, some help you create your monthly budget based on your current income. Some automated systems will make an automated transfer (direct deposit) from your checking account to the app within your pay period. In addition, some others can also act as investing apps, helping you put your money into sustainable investment accounts.
Using a savings app will not disrupt your everyday life. If anything, it could make your life easy if you are interested in saving ten thousand dollars in a year and boosting your financial security.
Our preferred option is Acorns. This app is reliable, has an intuitive user interface, and can help you save $10,000 in a year with no hidden charges. However, there are others you may want to check out. First, however, you should make sure that the app helps you hit your savings goal.
Pick Up a Side Hustle
Starting a side hustle is also one of the reliable ways to earn cash and save 10,000 dollars in a year. If you haven’t heard of side jobs or aren’t doing one already, you are missing out.
A side hustle is a new job you take up in your free time and a great source of passive income. Ideally, it will involve anything you can do in your spare time, which will not affect your regular job. Hence, these jobs typically do not take so much from you but can get you started on your savings journey.
There are several side gig ideas around. First, you need to discover the one that suits your skillset. Hence, you could start a freelance writing gig. You could also take up Uber or Doordash driving on the weekends or evenings after work.
More so, you can become a virtual assistant. Of course, you have to carry out some research and test it out for a while to ascertain that you are a fit for any of these.
Starting a side job is excellent advice because it is a secure way to earn and save money without sweating too hard. You can use it to save 10,000 dollars in a year and improve your cash flow.
However, you can also put the money from your side jobs into your emergency fund (aka rainy day fund). This is because you would ostensibly be making enough money from your regular job. You could then put away the extra income to cater to emergencies.
Check the Monthly Bills
You may not even realize it, but a considerable chunk of your monthly bills could come from subscriptions that you pay for. As long as you keep up with them, you will not have enough money to meet your savings goals.
Thus, split your subscription packages into two. The first group should contain those that drain your money without providing long-term happiness. For example, a gym membership could fall into this category. Just eliminate those.
The second category would include items like utility bills and the likes. It makes the most sense to keep up paying for these. However, you can choose to go for a lesser subscription package compatible with your financial situation or negotiate with the service provider. For instance, it is possible to speak with your cell phone provider to get a better deal than you currently have.
However, bear in mind that spending so much on these bills and hoping to save $10K at the same time will be a foolhardy decision.
Financial success will not come simply from saving money. You will also have to start investing as soon as possible. Understand that the intention is not for you to hit your savings goals and to stop there.
If that is your plan, then your financial goals are incomplete. So instead, incorporate investments into your personal finance ideology and watch the benefits come in waves.
Investing does not require much effort. This is because there are so many investment options to consider. Investing in stocks is most likely the best for a newbie like you. However, you could also decide to go into real estate.
Here, you will be investing for the long term. Real estate investing takes a few years to mature for you to reap the proceeds. Hence, if you started on time, say in your twenties, you would be reaping returns even late into your retirement.
It is also important to point out that you may want to employ the services of an expert while investing. This means that you would have to spend money. However, you should develop an abundance mindset.
This outlook lets you know that if you spend money on any worthwhile endeavor, there is the possibility of reaping it several times over. The critical thing is to discover the right platforms to channel your funds into.
Pay Off Debts
You will not truly set off on your financial journey if you do not pay off your debts and loans. Imagine loans as an anchor; they hold you down even when you want to sail out into deep waters.
You will need to rank your debts in their order of priority. Thus, if your student loan debt is higher and requires more interest than your credit card debt, you should tackle that first. Then, when you become debt-free, you will have more money to channel into your savings.
Avoid taking personal loans, and if you must borrow money, take an interest-free loan.
Conclusion: Saving $10K in a Year
Saving 10,000 dollars may not necessarily guarantee financial freedom. However, it is a step in the right direction. When you are deliberate about improving your savings, you will be picking up other necessary financial skills simultaneously.
Additionally, you would be curtailing wasteful spending and revamping your spending habits. These skills will help you become a person of means in the long run. This article has shown you all you need to do to attain this impressive feat. It is now left for you to get to it!