What would you do if you had an extra $10,000 at the end of the year? There are so many wonderful things that you could do, whether you wanted to enjoy a nice purchase or make a serious investment. However, it’s hard to imagine how to save $10,000 in a year. After all, that’s quite a big chunk of money. Nevertheless, it’s not impossible.
Break Down What It Means to Save $10,000 Per Year
Saving $10,000 sounds like a lot of work. Certainly, it can be. However, you aren’t saving it suddenly in one day. You have a whole year to save $10,000. So, instead of asking yourself how to save $10000 in a year, look at it this way:
- You’re going to be saving $833.33 per month.
- Alternatively, you’re going to find a way to save $192.30 per week.
- That’s a savings of $27.39 per day.
When you think about it that way, you can start to see how to save $10,000 a year. Of course, it’s still not easy to scrounge up $27 or $28 per day for savings. But it’s also not impossible. It’s doable. And you can do it.
Things to Sell or Downsize to Save $10000 a Year
In order to save this kind of sum, your best bet is to cut out some of your biggest expenses. And that means that you need to downsize some of the big things in your life.
Sell Your Car
I’ve been car-free for over a decade, so this one isn’t going to help me at this point. But it could have in the past. After all, cars are very expensive. If you have a car payment as well as an auto insurance payment, then chances are that you’re already spending close to that $833.33 per month that you’re hoping to save this year. Therefore, if you get rid of the car, you’ll be able to save yourself $10000 in a year.
Even if your car and insurance payment isn’t as pricey as that, you can bulk up the savings by selling the car. Sell the vehicle, put that money into your $10000 fund, and then funnel your previous monthly payments into that same fund. Don’t forget that all of the money you were spending on gas and repairs can also go into the fund instead. Do that and you might not need to do anything else at all to figure out how to save $10000 in a year.
Downsize Your Housing
How much do you spend each month on your rent or mortgage? It’s probably the biggest part of your budget. Therefore, if you can cut back in this area, you’ll go a long way towards saving that big chunk of money.
First, consider moving to a smaller house. If you’re a homeowner, selling your large home and downsizing to a smaller one could easily save you $10,000 in one year. As a renter, you can still save hundreds of dollars per month by moving into a smaller space. In addition to saving on the cost of rent, you’ll also save on home energy use, cleaning products, and so forth. You can also declutter all of the things that don’t fit in the new space and sell those items to add to your $10000 savings fund.
Similarly, you could rent out the extra space in your home. You could get a roommate. You could use AirBnb or VRBO to make money off of your extra space. Perhaps, you might even just rent out storage space in your basement or garage to someone in your neighborhood who needs to store or park something there. Use all of that extra savings to bulk up your $10000 fund.
Of course, you could also get more extreme. Move out of your house altogether for a year. Move in with your family members. Or camp out for a year. If you go light with housing, you’ll have a lot of extra money at year’s end.
Reduce Food Spending
Spending money on groceries and dining out is another one of the biggest expenses in your budget. While you might not cut out $800+ / month just by reducing your food spending, chances are that you could easily cut out $100 or more. That’s $1200 towards your goal for the year. Here are 50 ways to reduce food spending.
Assess Your Budget for How to Save $10000 in a Year
Selling or downsizing the big items in your home will go a long way towards helping you reach that $10000 annual savings. But the small money saving tips add up as well. Remember that you’re trying to save about $192 per week. So start looking at the places where you can cut back.
What to Cut Out Entirely
Go through your monthly budget and see what you can cut out. Make saving as much as possible your goal. Sacrifice everything else. Here are some of the most common things that you can cut out entirely:
- Buying books. Use your local library. Most books you want or need will be available for free.
- Clothes shopping … Really, go through your closet and you’ll almost certainly discover that you have enough clothing to last for an entire year without buying anything new.
- Streaming subscriptions … Find free alternatives to Spotify, iTunes, Netflix, Hulu, and all of those other streaming services that you currently pay for. (Bonus if you cut out TV and Internet entirely, but you don’t have to do that to save a nice chunk of money.)
- All monthly memberships … Quit the gym and go exercise outside. Stop getting the wine club delivery to your house each month. Cancel every membership that you have and funnel that money directly into your plan for how to save $10000 in a year.
- Salon and spa services … Cut your own hair. Trade massages with your partner. Have a mani-pedi night with your friends.
- Taxis and rideshare services … Walk, take public transportation, skip going out and you’ll save yourself a pretty penny.
- Various fees … Does your bank charge a fee for your account? There are banks that do not. This is just one example of a small fee that you can entirely eliminate from your life.
- Vacations … If you take one or more vacations every year, then you’re in luck because cutting them out for a year will save you a whole lot of money.
- Vices … What are the things that aren’t serving you and are costing you a lot of money? Alcohol, cigarettes, coffee, gambling, and fast food are just a few examples of things that you’re spending money on that probably aren’t great for you anyway.
What to Cut Back On to Save Money
Next, go through your monthly budget again and assess where you can cut back. There are some things that you can’t cut out entirely, but you can cut back. For example, you aren’t going to stop using home electricity. Buy you can implement energy-saving tricks all throughout the home to significantly reduce your spending. Here are some other areas to cut back:
- As aforementioned, cut back on TV and Internet. You might not cut it out entirely, but do you really need all of the services you’re paying for? If you haven’t cut the cable cord yet, then do so. If you’re paying for unlimited phone service but don’t need it, then why are you paying for it?
- Maybe you weren’t on board with giving up your car entirely, but could you use it less? At least then you would save on the gas money.
- Review your insurance and see if you can cut back. You might be able to switch plans, bundle various types of insurance, and/or change your deductibles to save a lot of money this year.
- Likewise, check with all of your monthly bill providers to see if they can do anything to assist you in lowering your costs. Ask about deals, reduced services, and special discounts for students or retirees or whatever category you fit into.
- Barter for things that you want and need. Use your skills as a service to trade for the things you want rather than spending cash on them.
Additional Tips for How to Save $10000 a Year
Here are some other helpful tips to keep in mind:
- Automate your savings. If you’re in a position to set your accounts to automatically transfer $192.30 per week (or $385 biweekly, depending on how often you get a paycheck) then do that. Send it straight from checking to savings without thinking about it and you’ve saved $10000 in a year.
- Take any extra money that you get and immediately put it into savings. Whether it’s your tax refund, a gift check, or money from a side hustle, don’t count it as “new money to spend.” Instead, consider it money to save.
- Try a money challenge. A no-spend month, a 26-week money-saving challenge, or another similar plan could help you save even more.
- If you have debt, see about refinancing or getting a better loan with a lower interest rate.
- Keep your focus on non-monetary joys and values. The more attention you give to these aspects of life, the less likely you’ll feel “cheated” out of the money that you’re saving, and the more likely that you’ll succeed in your big savings goal.
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