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Whether you are trying to save money for a new car, a downpayment for a house, or a family vacation, $10,000 a year can make a huge difference.
And although learning how to save 10k in a year sounds like an impossible task, it is a lot easier than you might think.
In this post, we will discuss why you should save $10,000 in a year and eight simple steps to take to achieve this goal.
By putting these steps into action, you will be able to save more money each month and reach your financial goals.
Let’s get started.
Why Save $10,000 in a Year?
If you are searching for how to save 10k in a year, you probably have a reason why.
You may be trying to save for:
- A wedding
- A downpayment for a house
- A new car
As previously stated, saving $10,000 in a year is a hefty goal. Knowing your “why” is important because it will help you stay motivated throughout your savings journey.
On the other hand, if you aren’t saving for anything specific and just want to take on the challenge of putting $10k into savings in 12 months, that’s fine too!
This type of savings challenge will ultimately help you learn how to save more money and create healthy financial habits.
Afterward, you will know how to commit to a budget, meet financial goals, and stay out of debt.
If these all sound like areas where you can improve, learning how to save 10k in a year might be the best goal to start with!
Let’s take a look at some steps on how to successfully complete this challenge.
How to Save $10,000 in a Year
If you want to learn how to save 10k in a year, you will need to take a few crucial steps.
Let’s look at how to achieve this goal.
Calculate How Much to Save Each Month
Overall, $10,000 in savings sounds like a lot of money.
But if you are looking to save this much in one year, it’s important to understand how much you will need to save each month.
So, because there are 365 days in a year, 10k in a year is broken down like this:
- $833 per month
- $385 biweekly (if you are paid every other week)
- $193 weekly
- $38 daily
However way you look at it, these are the numbers you need to save in order to reach your $10,000 in a year savings goal.
Breaking down the numbers this way can ultimately help you save the right amounts each month and keep you on track.
Set a Budget
If you don’t already have a budget, you will want to make one for this savings goal.
A budget will ultimately help you understand how much income you are bringing in each month and how much you have leftover after expenses.
It will also show you all unnecessary costs that can be cut out each month.
If you don’t want to create your own budget, consider using online budgeting tools like Personal Captial or Mint.com. These tools will automatically help you create a budget and track your spending so you don’t have to.
After you successfully track your spending habits for a month or two, you will be able to see how much money you have available to set aside.
Cut Unnecessary Expenses
After you create a budget and track your expenses, you will want to cut some unnecessary costs.
Some unnecessary costs may include:
- Gym membership
- Subscription services
- Daily coffee from a coffee shop
- Impulse purchases
- Cable bill
- Takeout and delivery meals
- And more
Although some of these expenses may seem small on their own, they can really add up fast.
For example, if you stop for a $5 morning coffee 5 days per week, you end up spending $100 per month on coffee.
You could easily make coffee at home and bring it with you to significantly reduce this cost.
Or, maybe you have a gym membership or subscription services that you hardly ever use. You can easily find alternatives to these costs that are way cheaper or better yet… FREE!
If an item is not completely necessary to survive, it can almost always be cut from the budget.
Lower Your Monthly Bills
One of the best ways to save more money each month is by simply lowering your monthly bills.
Some people may not have much room to cut down on their bills, while others will be able to save quite a bit each month.
For example, you may be overpaying on your phone bill, insurance, cable, etc.
Check your budget and contact your providers to see how much you can negotiate.
These are services that can help you save on your monthly bills by negotiating the costs of your phone bill, internet, TV, insurance, satellite radio, and more. They also help you to cancel your old subscriptions.
Cutting down on your monthly bills is a great way to put more money aside for savings and help you to reach your financial goals.
Automate Your Savings
It can get difficult trying to put money into savings on your own.
In this case, it might be best to automate your savings so that you don’t manually have to do it yourself.
For example, your bank may allow you to move a certain amount of money into your savings account automatically whenever you use your card.
Or you may be able to opt-in for a percentage of your paycheck to automatically get deposited into savings each time you get paid.
Either way, this is a great way to save money without having to do it yourself.
Increase Your Income
In some cases, finding ways to save money might not be enough.
You may need to find ways to increase your income to meet your $10,000 in a year goal.
This can be achieved in a few different ways:
- Start a side hustle (or two)
- Work extra hours at your current job
- Get a second job
- Ask for a raise
- Build up passive income streams
These are all great options to increase your income and save more money. You could even try a few of these options at the same time to maximize your earnings.
Live below your means
One way to save more money each month is to learn how to successfully live below your means.
Living below your means is when you consistently spend less than what you make.
In other words, you don’t need to go into debt each month to pay for all of your expenses.
When you have money left over each month, you can put it into savings to reach your $10,000 in a year savings goal quicker.
Track Your Progress
Learning how to save 10k in a year can be difficult.
It’s important to not only set your goals, but to track your progress as well.
This is so you can keep track of where you are with your savings. Some months you may be able to save a lot and another month you may only be able to save a little.
It’s important to keep track of how much you have saved and how much more you need to save.
To do this, you could create or purchase a visual tracker to help you stay motivated. Or you may want to stay organized with a spreadsheet or check-off page.
You can do this however you would like, but make sure you keep track of your progress each day, week, or month.
Complete a No-Spend Challenge
One way to help save more money, and reach your goals quicker, is to try a no-spend challenge.
A no-spend challenge is when you challenge yourself to only spend money on essential items for a certain period of time.
The goal with a no-spend challenge is to only purchase what you absolutely need for the time that you are completing the challenge.
For example, some necessary items that you will still need to buy include:
- Other bills
- Gas for your vehicle
- Daily essentials (toothpaste, soap, toilet paper, etc.)
The items that you should stop spending money on for a no-spend challenge include:
- New clothes
- Eating out
- Getting your hair or nails done
- Unnecessary shopping
- Anything that is not essential to live
By doing this, you will be able to cut down on unnecessary spending and put more money into savings.
Check out this full post on How to Do a No-Spend Challenge.
Celebrate Your Progress
A year-long savings goal can become a daunting and boring task pretty quickly.
If you are used to spending money often, you may start to feel like giving up after a month or two.
But while saving money is great for reaching your goals quicker, it’s unrealistic to not spend any money on yourself at all.
You should celebrate your progress by allowing yourself to splurge (within reason) once you reach certain milestones.
For instance, you could set aside $50 to spend on yourself for every $1,000 you save.
Or, you could take a small vacation when you save the first $5,000.
However you want to celebrate is up to you, but make sure you are tracking your progress and celebrating your milestones so you don’t get burnt out with your savings goal.
The Bottom Line: How to Save $10,000 in a Year
Learning how to save 10k in a year is a great financial goal to aim for.
And with some careful planning and the right steps, you can achieve it, no matter what your salary is.
Whether you are saving to buy a house, a new car, or for travel, having money set aside will help you get there quicker.
Just imagine what an extra $10,000 could do for you financially!
And who knows? Maybe in a year or two, you will be able to save even more than $10,000 a year.
Hey there! My name is Swati and I am the author and creator of The Blissful Budget.
My goal with this blog is to help you save more money, earn more money, and start to live the life you want by obtaining financial freedom.