save 10k a year

How to Save 10k a Year: A Complete Guide

Looking to save 10k in a year? You may be wanting to save up to help pay down debt, go on a fun vacation, or save for a down payment on a house. No matter what your goal is, saving 10k in one year is an achievable goal if you break it down in to manageable pieces.

Read below to get information on how much you’ll need to save, how to save, and ways to keep yourself on track! The most important part is coming up with a plan and getting started.

How much do you need to save in order to save $10,000 in one year?

So let’s start by breaking it down. Saving $10,000 can seem like a daunting task, especially if you don’t have a plan set out. The first thing you need to know is how much you’ll need to save each month in order to reach your goal by the end of the year.

Let’s break it down monthly:

$10,000 divided by 12 months is $833.33 per month. That means if you’re looking for a monthly savings goal it’s $834- you can round this up for simplicity.

What about if you wanted to break it down to a daily goal:

$10,000 divided by 365 days is $27.65 per day. Again, you can round this for simplicity- most budgets work with the number $25-$28 per day.

Even broken down monthly or daily, saving 10k in a year may seem like a big feat. But by breaking it down, we can better understand how much we need to cut back (or earn) each month.

How to save 10,000 in a year?

Now that we have an understanding of how much we’ll need to save, let’s talk about how to actually do it. There are a variety of ways to save, such as cutting back on expenses and/or getting a side job. The important step is understanding how much you currently spend and identifying key areas for improvement.

Calculate your current income and expenses

The first step to saving more money is understanding where your money is going. The best way to do this is calculate how much money you’re currently bringing in and what you’re spending it on each month.

This can feel like a daunting task, but taking the time to do it will be well worth it. It will help you identify key areas where you can cut back or make additional income.

Look at your spending history. Where does most of your money go? The easiest way to track your spending is to sign up for a free service like Mint or Personal Capital. You can import your spending history and it will give you suggestions on areas where you should save more.

You can also track your spending by using physical planners like the Clever Fox Budget Planner. Or you can use a spreadsheet and manually track expenses. Pick a method that works for you and gather about 2 to 3 months worth of spending data.

Create a budget

Once you have an idea of how much money you’re spending each month, start creating a budget. You’ll want to create basic categories like mortgage/rent, transportation, groceries, eating out, utilities, etc. Then, based on your spending history, make a few custom categories to help track areas where you may not be as disciplined. This could include video games, makeup, books, etc.

Here is an example of a detailed budget category breakdown. But you can make yours more simplistic if it is easier for you to track.

An easy way to create a budget is to use an online service like Mint, which will track your spending history and calculate your monthly expenses for you.

See related: Budgeting Tips for Beginners

Identify where you can make cuts in your budget

After you’ve laid out all of your spending into different categories, go through and identify where you can make cuts to save more money. Look for items that are a little too high or areas of spending that were forgotten about. For example, do you really need Netflix, Spotify, Amazon Prime, etc.? Can your grocery budget be cut down? Do you spend a lot of money at coffee shops?

Actionable ways to save $10k a year

Let’s take a look at a few ways to put $10,000 in your bank account.

Eat at home

Eating out can be a huge expense for people. Whether you’re grabbing lunch with coworkers or taking your spouse out for date night- it can really add up. While you don’t have to cut out every single meal at home, prioritize which ones mean the most for you and skip the rest.

Eat at home as much as possible– find favorite recipes and/or meal prep the night before so you have meals ready for the week. Prepare large batches of soup or chili to take for lunch during the week.

Cook larger dinners on weekends and use those leftovers for lunch during the week.

If cooking at home isn’t your thing, try meal prepping. Meal prepping is where you make large batches of dinner (or lunch) and then freeze it. Then, on nights when you don’t feel like cooking or don’t have time to cook- you can easily reheat the meal.

If you’re concerned about how much money you’re spending at the grocery store, using cheap ingredients like beans and rice can save you a lot of money. You could also look into buying store brands versus name brands (remember the price is per ounce/gram).

Cut out impulse buys

When trying to reduce spending, cutting out impulse purchases is one of the best places to start. Impulse buys are items that you buy without really needing or having a plan for. 

Every time you’re about to make an impulse purchase, stop and ask yourself is this something I need? Do I already have something like this at home? How much am I spending here and is it worth it?

Check out these 7 questions to ask yourself before buying something to help reduce spending.

Cancel subscriptions you don’t use

Do you have a subscription to every single streaming service? Do you still get DVDs in the mail? Cancel these. If you don’t think you’ll miss them, call and cancel your subscription.

On the other hand, if you are using a cable provider that costs you over $100 per month- can you switch to a cheaper streaming service and still get the shows you actually watch?

Take a look at how you’re utilizing your subscription and do a trial one month cancel to see how it actually affects your life. Bet you won’t miss it.

These subscriptions can include TV, clothes, jewelry, books, etc. Anything that automatically charges your credit card every month!

Use coupons when buying necessities

Coupons are a great way to save money. Using coupons when buying items you need can help you save a lot of money over time. Coupons are often available in the Sunday paper, or on coupon websites you can find online. You can also check with your grocery store before shopping to see if they offer any additional coupons for specific products- sometimes stores will have buy one get one free deals with certain items.

Not only can coupons help you save money when buying necessities but they also help you save on things like makeup, clothes, and household goods.

Check out the many ways you can coupon here.

Many people sign up for rebate programs like Rakuten, where you can make money on purchases you were already going to make.

Create a side hustle

Increasing your income can be another way to save $10,000 in a year. Side hustles are ways to make money outside of your traditional job. A few common side hustles include starting a blog, freelancing through sites like Fiverr, driving for Uber or Lyft, and starting your own Etsy business.

While side hustles can be easy ways to make extra money they also take time. For example, if you start blogging it will take at least 3 months (if not longer) before you start seeing any income come in.

If your side hustle is successful enough to make a pretty significant chunk of change, you may be able to rely on it as your main source of income.

See related: 9 Side Hustles for Moms that Actually Make Money

Savings Challenges

Save 10k a year - no spend challenge

Savings challenges can be a more fun way to save money. There are many different types including no spend challenges, where you try to go an entire month or more without spending money in a certain category. There is a 52 week challenge where you put $1, $5, or $10 in your piggy bank every day of the year. Or you could try the penny jar challenge where you keep all your spare change from every transaction.

See related: 5 Savings Challenges You Must Try

Automate monthly savings

If you’re worried about your ability to save money throughout the month, start by putting that money into savings before you have a chance to spend it. This can help challenge you to live off the remaining amount for the duration of the month.

When you see a larger sum in your checking, it’s easier to spend it on things you don’t need. But if you’ve already moved your money into savings, you know whatever is in your checking is all you have to spend which can be motivating.

You can automate your monthly savings by signing up for Digit, which withdraws small amounts of money from your bank account throughout the month.

What can you do if you save 10k in a year?

Saving $10,000 is a huge feat and there are plenty of ways to utilize those savings.

Here are some examples of how you could spend $10,000:

Pay off credit card debt.

Travel around the world for 1 month.

Start a new business venture or expand an existing one.   

Create a down payment for a house.

Pay cash for a new car or purchase one of the many cars you can buy used for under $10k.

You could also invest that money with an app like Wealthfront and watch it grow.

Know your long-term goals and track your progress

The key to succeeding is clearly defining why you want to save $10,000 in a year and tracking your progress. Having a clear goal in mind will help you stay motivated throughout the year, especially when it’s time to save for holiday shopping or other expenses.

Celebrate the big and small milestones. Each day and each month you save is an accomplishment and worth celebrating.

You can track your progress by keeping a spreadsheet, updating it with the amount of money you save each month or week.

See related: 7 Smart Financial Goals to Grow Your Wealth

Conclusion

Saving $10,000 in a year may seem like an insurmountable task but with planning and time you can do it. Use these tips and save more money so you have the freedom to do what you want. Create a plan, track your progress, and celebrate your success!

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