Have you ever thought about how to save $10,000 so you can reach your goals quicker?
If you’re in the throws of paying off debt, you might not want to be tempted to think about what an extra $10,000 a year in your wallet would do for you and your family. But the reality is that for most of us, an extra $10,000 would adequately cover 3 – 6 months of expenses, or possibly pay off our debt entirely. Either way, it would be a huge step forward toward financial peace and recovery.
We’ve talked extensively about the importance of creating and building an emergency fund, paying off debt and covering living expenses. $10,000 is an important goal that could help you achieve any or all of these steps.
But ten grand is a whole lot of cash, and it may seem like an unattainable goal to reach. But, it can be done. If you make the necessary sacrifices (yes, it will take sacrifice), plan and budget properly, this time next year you could reach that goal – and I’m going to show you how.
How To Save $10,000 This Year
Of course, the idea of $10,000 in your bank account is appealing but you must be smart about how you go about saving this money and what you do with it.
If you’ve got zero credit card and student loan debt, then congratulations! You’ve got the right to pass go and start saving this money for the sole purpose of building up your long term savings or if you have long-term savings covered, then for whatever purpose you desire. If you don’t, you’ll need to do a few things before you save for the long haul.
First, make sure you have your emergency fund fully funded. You know that fund that is anywhere from $1000 – $2000 and includes all those moments in your life you can’t predict will happen like the tire blows, the water heater needs to be replaced, or Fido needs to make an emergency trip to the vet?
Once you’ve got that covered move from there to paying off debt. I know you’d rather put that money into savings, but you’re paying interest, and probably a lot and so it’s smarter to pay off the credit card debt first then to save.
Once your debt is paid, you can move freely to the next step.
Wait – you don’t think you have money in your budget for saving?
It’s All In The Budget
Anything you need can be found in your budget if you know how to plan effectively.
Sit down and examine the numbers. Look it over, review the categories and see what your variable expenses are and where you can make cuts.
Are you maximizing your pre-tax income? Are you moving money into a plan that helps pay for medical expenses with pretax dollars thereby lowering your taxable rate? If not consult your accountant to find out the best solutions for you and your family including withholdings.
Next move to other variables like cable, lights, and other utilities. Ditch cable and move to a cheaper plan and while you’re at it get rid of that landline too. We cut our cable bill and canceled our home phone and saved $150 a month by doing so. That’s a saving right there of $1,800 per year. That’s almost 20% of your goal.
Is money leaking right out of your checking account? Gym memberships you don’t use? Magazine subscriptions you can cancel? What about automatic deliveries? Typically these expenses go unused and unnoticed. Cancel them if you’re not utilizing them to the fullest advantage.
Budgeting is all about consistency. It’s not a set and forget activity that’s done once a year. Instead, it’s something you should revisit monthly or at least four times a year.
The Budget Buster
Your food budget can make or break your budget. It typically is the largest variable expense most families struggle with.
Most of us eat out way too often resulting in a food budget that is unsustainable over time. The first way to drastically reduce your food budget is to stop eating out. Instead, you can start creating easy freezer meals and other budget friendly options for your family.
When planning your food budget make sure you meal plan with coupons, use sale matching, stock up on staples, and eat less meat to make your grocery dollars stretch and stretch. Over time you’ll see that by using these methods in combination can drastically cut your food budget in half.
Additionally, there are many money saving apps that give you money back for groceries you buy. Make sure you investigate all the options out there so you can cut that food budget.
To Spend or Not To Spend, That IS The Question
One of the ways that many people save money is to do what they call a No Spend Challenge. If you’ve never done one, in a nutshell, you refrain from shopping for an entire month. No trips to Starbucks, no shopping for incidentals, no online shopping, no date nights, no NOTHING for a whole month.
Feels restrictive doesn’t it? Well, it is, and it can be beneficial for some people but not for all. And so I caution people about using no spend challenges to save money. Sometimes it can have a reverse effect causing the overspender to go out and recklessly spend after the trial is completed.
So, if you’re someone who struggles with shopping and spending recklessly, I don’t recommend a No Spend Challenge. Instead, find other ways to save money and use your budget to it’s fullest.
Save on Everything
The reality with online shopping and tools like Honey, and Ebates, it’s possible to save on nearly everything you need to buy. By using and stacking these saving tools, you can save a substantial amount of money for the things you need.
Saving can be hard and if you take it to an extreme can make life feel joyless, miserable and restrictive. There are countless ways to make life feel festive and enjoyable even if you’re living on a tight budget. I just spent 100 Days sharing budget friendly ideas for gift giving, decorating, recipes and projects in my 100 Days of Debt Free DIY Holiday Ideas. Check them out and see how you can still do fun things even if you don’t have a lot to spend.
I love You Tube. Anytime I need to fix something in my home I go right to You Tube, and sure enough, there is at least one if not 100 videos on how to fix what’s broken. You just might find you have a knack for home repair you never knew about. Becoming a DIY’er can save you substantially in the course of a year.
Consider putting off purchases for the year. Can you go another year with your washing machine? Can you keep the old clunker going for another year before buying another car? Try as you can to put off buying things you don’t need to buy for an entire year.
Do you have a talent someone would gladly pay for? Maybe you are wonderful at photo editing. Someone without those skills would gladly pay you for to do that task for them.
Most of us, if we thought about it could market many of our skills to make our goal of saving $10,000 in a year.
Do you have a passion you want to share with others? Blogging provides me a full-time income. After taking the Elite Blog Academy Course, I was able to turn my hobby into a full-time income. Maybe blogging is right for you?
Revisit Your Budget and Plan
If you’re serious about saving this money and utilizing it towards your big goal of getting out of debt or fully funding your long-term savings, then you’re going to have to keep your eye on the prize. That means reviewing your budget and spending weekly and course correcting when necessary.
$10,000 is a big goal, but it’s not unrealistic if you employ smart strategies and start living more within your budget and means. When things get tough (and they will), remind yourself of your big WHY. Think about how wonderful it will feel when you have achieved financial peace and reach your goal.
While we would all love $10,000 of play money, true satisfaction comes from being able to live debt free. Keep that in the forefront of your mind as you work towards your $10,000 goal!