Saving a significant amount of money, like $10,000, can be a life-changing accomplishment. There are a lot of great things you could do with that money. You could buy a car, use it towards a down payment on a house, boost your retirement savings, pay off credit card debt or student loans, save for a wedding, save for your kid’s education, or do anything else important you.
After learning how to save $10,000 in a year, chances are, you’ll feel empowered and want to continue with the good habits that you’ve developed.
Not only will that $10,000 allow you to do some awesome things, but going through the process of saving money can also help you to develop strong financial habits that will put you in a much better position going forward as you head toward financial security.
Of course, saving $10k in one year won’t be easy, and it will require some sacrifice. But you’ll be able to look back a year from now and see that it was all worth it.
The Math Behind How to Save $10,000 in a Year
While it’s great to set a goal of saving $10,000 over the next 12 months, to have a realistic chance of succeeding, you’ll want to break it down so you know how much you’ll need to save each pay period.
It breaks down to:
- $27.40 per day
- $193 per week
- $385 every two weeks
- $833.33 per month
Saving the set amount from each paycheck is one way to go about this money-saving challenge. Another option would be to save a variable amount each week. Sometimes this can be a little bit more fun, and you can also start with a smaller amount and work your way up, so it’s not such a big shock.
How to Save $10,000 in a Year in 10 Steps
Now that we’ve looked at how much you’ll need to save each week or each pay period, let’s move on to the most important topics, like how you can actually make this financial goal happen.
1. Have a Purpose for Pursuing This Milestone
Because saving a big amount like $10,000 is not easy, it’s a good idea to have a clear understanding of why you want to save. It’s easier to make sacrifices when you know why you’re making them or how you’ll benefit in the future.
Your purpose could be any number of different things. The only part that really matters is that it’s important to you, and it’s something you’re willing to sacrifice for.
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2. Commit to Reaching This Savings Goal
Don’t be wishy-washy on this money-saving journey. If you’re not committed to it, you’ll be likely to take the easy way out when some challenges arise. Commit to reaching your savings goal and you’ll be more likely to make the changes needed to save the money, and ultimately, more likely to succeed.
If you’re married or with a significant other, it’s extremely helpful to have a partner who is onboard as well. If you’re single, maybe you can find a friend or family member who wants to take the challenge along with you, or at least someone who will encourage you along the way. Getting someone else involved can help you save. This provides accountability, and it’s just more fun.
3. Create a Monthly Budget and Track Your Progress
If you don’t currently live based on a budget, I highly encourage you to create a budget as soon as possible. Budgeting and tracking your expenses will go a long way in getting the most out of your money and reducing unnecessary expenses. You’ll probably find some easy ways to start saving money right away.
If you’re not sure how to budget, read my article How to Create a Budget That Works that breaks down the budgeting process for you.
4. Automate the Savings
While it’s not 100% essential, automating the savings can be a really big help. The best way to do it would be to set up a direct deposit so you have some money going directly to a high-yield savings account each pay period.
Most employers that offer direct deposit will allow you to deposit to multiple bank accounts, so you could have the majority going to your checking account, and have a smaller amount going to a savings account.
If direct deposit isn’t an option, you could set up an automated transfer from your checking account to your savings account each week, bi-weekly, or each month.
The only downside of automating the savings is that you’ll need to make sure you can still cover your essential bills with the amount that’s left in your checking account. If it’s going to be really tight, you might want to opt against the automated transfer.
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5. Put the Money Someplace Safe (Where it Won’t Be Touched)
It’s essential that you don’t spend the money that you’re saving throughout the year as a result of budgeting. The best way to do it is to create a new savings account specifically for the money that you’re saving. Most online banks allow you to easily create additional savings accounts.
Keeping the money in a separate savings account makes it a lot easier to see exactly how much progress you’ve made, and to avoid spending the money. If you’re adding the money to an existing account, it’s really easy to accidentally spend it or use it for some other purpose.
6. Sell Stuff You Don’t Use
Most of us have a lot of stuff around the house that we no longer use. An easy way to quickly boost your savings is to sell things you don’t need or don’t use.
Even though you don’t use it, the item may have a decent value to someone else. Selling things like clothes, electronics, books, tools, furniture, or whatever else you have around the house can be a great boost to your savings (for ideas, see What Can I Sell?).
Fortunately, selling your stuff is actually pretty easy. You can use eBay, the Facebook Marketplace, Craigslist, or several other selling apps to find people who are looking for the things that you want to sell.
If you don’t have experience with selling your stuff, be sure to read my article How to Make Money by Selling Your Stuff.
7. Take Advantage of Easy Wins to Spend Less
When it comes to personal finance and saving money, there are a lot of what I call “easy wins”. These are ways that you can save money without spending a lot of time and without a huge impact on your life. Any time you’re looking to save money, I think it’s a great idea to start with easy wins to get the ball rolling. Here are a few ideas.
Cable TV (or satellite) is a major expense each month that you can do without. This one change can possibly save you about $100 in monthly expenses, or $1,000+ per year.
Fortunately, there are a number of really good cable alternatives. The cheapest option is to buy an antenna and get free TV. Netflix, Hulu, and Sling are all excellent options that are far cheaper than cable. If you’re an Amazon Prime member, you also have a big collection of TV shows and movies available through Prime Video.
My wife and I got rid of cable about 9 years ago and we’ve never missed it. Netflix has more than enough options to meet our needs.
Switch to a Discount Cell Phone Carrier
Another big monthly expense is for cell phone or wireless service. And an easy way to reduce that is to switch to a cheaper carrier. Several years ago, my wife and I switched from a major carrier to a discounted carrier and it literally cut our monthly bill in half. It went from $140 per month to $70 per month, which comes out to a savings of $840 per year! And it’s really had no impact on our service.
We use Cricket Wireless, but there are also some other great options like FreedomPop, Mint Mobile, and Ting. If you’re not currently using a discounted carrier I would highly suggest looking into it. It’s probably the easiest money I’ve ever saved.
Look for Cheaper Insurance
Insurance is one of those monthly bills that’s easy to overlook. You set it up, and then it’s probably billed to your credit card or taken out of your checking account automatically. But it pays to check in on your insurance rates every once in a while.
Obviously, there’s a lot of competition in the insurance industry and it’s usually not too hard to find better rates than what you’re currently paying. You can use resources like Quotacy (only for life insurance) or Policy Genius to easily compare rates and find better options.
Another way to lower your insurance premium is to adjust your coverage. Take a look at your current policies and see if you are over-insured. You may be able to reduce the coverage or increase the deductible to save a significant amount of money each month.
Credit Card Signup Bonuses
Many credit cards will offer bonus money if you sign up and meet a few basic requirements. Typically, you’ll need to charge a set amount of money to the card in a given period of time (usually 90 days). If you already pay for most of your expenses with a credit card, meeting the spending requirement may be no problem at all and without wasteful spending. See the best credit card signup bonuses here.
Of course, it’s not a good idea to sign up for a card if you have to change your spending habits in order to reach the spending requirements. And if you currently have credit card debt or if you don’t feel like you have the discipline to have a credit card, you should skip this one.
Most credit card signup bonuses will be at least $100, and some will reach $500 or more. Getting a $500 bonus from a credit card would give you 5% of your savings goal of $10k with virtually no effort. And if you’re married or with a significant other, if both of you were to get a $500 bonus, that gives you 10% of the savings goal very easily.
The best signup bonuses tend to come from cards in one of two categories: cash back credit cards and travel rewards credit cards. You can see an updated list of the best cash back credit cards here and an updated list of the best travel rewards credit cards here.
Let Trim Reduce Your Bills
Trim is a free app that can help to save you money in a few different ways. First, Trim will analyze how you spend money and look for subscription payments that can be canceled. Maybe you have a gym membership that you never use or subscription box payments that you could easily do without.
But the best thing about Trim, in my opinion, is the bill negotiation service. You can allow Trim to negotiate your cable, internet, and cell phone bill on your behalf. They have a great track record of being able to lower bills. I used Trim last year and they were able to reduce my monthly Comcast bill for internet access.
Trim is free to try. If they are not able to negotiate a lower rate, you will owe nothing. If they are able to reduce your bill, they will keep 33% of what you would save during the first year. There’s really nothing to lose and it takes just a couple of minutes to sign up.
Take Advantage of Passive Income Apps
The last easy win that we’ll look at is to take advantage of passive income apps and websites that offer easy money. There are a number of apps/websites that will pay you with very little effort on your part.
In general, you’re not going to make a ton of money with any one of these apps, but it can add up (and it doesn’t take much effort). Here are a few specific apps to try:
MobileXpression – MobileXpression is a research company that studies online internet usage and patterns, and they will pay you (in the form of gift cards) for access to your mobile browsing activity. They don’t collect any personal or private data. All you need to do is install it on your phone, and open the app every now and then to claim the points that you’re earning. You can earn $50 in gift cards per year.
Drop – Drop is a cash back app that links to your credit or debit card, so you’ll earn cash back automatically when you make purchases at participating stores. They have a lot of great retailers and restaurants that participate like Walmart, Target, Walgreen’s, McDonald’s, Dunkin Donuts, and many others. You can also earn more by accepting special offers that are available inside the app.
Dosh – Dosh is another cash back app that, like Drop, links to your credit or debit card. Dosh has a lot of partners, including some local stores and restaurants and the amount of cash back that you can earn is pretty good in some cases. Dosh is also offering a $1 bonus when you link your first card – sign up through this link.
Honeygain – If you sign up for Honeygain and install the app, you can make money completely passively. Data scientists pay Honeygain to use Honeygain’s network to connect to the internet. Honeygain manages the connections and pays you for your unused net traffic.
Swagbucks – Swagbucks offers several different ways to make extra cash. The passive part of the income is from earning cash back for your online purchases. Swagbucks has partnered with thousands of different stores and websites and it’s easy to earn cash back for many of the purchases you would make anyway. There are also some other active ways to make extra money, like taking surveys through the app. Swagbucks is also offering a $10 bonus if you signup through this link.
Related reading: 27 of the Highest-Paying Apps
8. Scrutinize Your Recurring Bills
When you’re trying to save money, one of the best things you can do is lower or eliminate your recurring monthly bills. Even bills that may seem small will add up over the course of a year. Try to avoid recurring bills for anything that isn’t essential or very important to you. Sometimes you might not be able to completely eliminate a recurring subscription payment, but you may be able to reduce it by taking a cheaper option.
Earlier, I mentioned that Trim will help you to find subscription payments that can be canceled. While that can be helpful, you can also do it on your own without the help of an app. Simply go back through your credit card and bank statements and look at all of the recurring bills. Scrutinize each one to determine if it’s something you really need, or if you could reduce or eliminate it.
Things like gym memberships, subscription box services, streaming services, and website memberships can often be eliminated if you’re looking for ways to save money every month.
For others, entertainment can be a huge line item in the budget. If that’s the case for you, look for some free or low-cost alternatives that would still allow you to have fun without spending as much money. See our list of stay-at-home date ideas and ways to get free concert tickets.
9. Tackle the Biggest Expenses in Your Budget
If you want to make a big impact on your monthly budget and free up a lot of money for saving, one of the best things you can do is focus on the biggest expenses in your budget. All of the budget categories, the ones that tend to account for the most spending are:
- Car payments
There may be some others that make up a big part of your budget, but these four are at or near the top for a lot of people. Reducing your expenses in these categories may not be easy, but it can have a big impact on your budget if you are willing to make some changes.
Since we’re focused on saving $10,000 in the next 12 months, let’s consider options that can be put into practice quickly. Options for lowing your housing cost quickly could involve refinancing a mortgage (depending on your current rate) and renting out a room or part of your house. These won’t be viable options for everyone, but if either is a possibility for you, it could make a big difference for your savings.
Food is probably the easiest of these four categories for most of us to save. If you’re regularly eating meals at restaurants, an easy way to save a big chunk of money is to start preparing more of your meals at home. Aside from reducing spending at restaurants, weekly meal planning and doing your grocery shopping from a list can have a big impact. Many individuals and families are able to cut their food expenses in half by making some simple changes.
Related reading: 30 Brilliant Ways to Save Money on Groceries
If you currently have car payments, you may want to see if there is a way to get rid of that payment. Is the car essential? Are you a two-car family that could really go down to a one-car family? Do you have a car that’s far more expensive than you need?
Depending on how much you drive, gas can also be a big expense. The most significant way to cut back here is to drive less. You could carpool to work, combine errands and other trips to drive less, ride a bike or walk, and simply find more activities to do at home rather than going out.
Related reading: How to Save Money on Gas
10. Increase Your Income (Side Hustle)
When we look at how to save 10,000 in a year, ways to reduce spending tend to get most of the attention. But increasing your income can also allow you to save more, assuming your living expenses remain the same.
In fact, increasing your income can have far more impact in the long run than finding ways to cut costs. You can only cut expenses so much before you run out of options, but you can always make extra cash and have more money to save.
The first thing you should consider is how you might be able to make more from your job, and there are a few options.
- Get a raise. Getting paid more for the same amount of work is the best solution. See this article about how to ask for a raise.
- Get a promotion. A higher-paying job at your current employer would allow you to save more.
- Find a higher-paying job. If no promotion is available at your current employer, you may be able to find a job with another company that pays more.
- Work overtime. If your job allows you to get paid for overtime, it can be an effective way to make more money.
Increasing your income through your job is the ideal solution, but it may not always be possible (or maybe you don’t want to leave your job). If that’s the case, starting a side hustle is a realistic alternative.
There are plenty of different side hustle ideas that you could pursue, but if your goal is to save money in the next 12 months, you should choose a side hustle that allows you to make money quickly. Some side hustles involve starting a business, which can be great for unlimited potential, but typically it will take a while before you start making money.
Here are some side hustles that allow you to start making money quickly.
There are many different services that you can offer as a freelancer (see this list: 25 In-Demand Freelance Services to Offer), including writing, designing, coding, and much more. Freelancing allows you to work around your existing job, and you can make a good rate for your services. It also can turn into something full-time if that interests you.
Rent Out Your Stuff
It may not be the first side hustle that comes to mind, but renting things can be great when you’re dealing with limited time availability. You could rent a part of your house, a bedroom, office space, storage space, land for farming, your car, boat, RV, tools, baby equipment, and more. For a detailed guide on how to earn extra money from rentals, please see 20 Things You Can Rent Out for Extra Money.
Become a Flipper
Another surprisingly lucrative side hustle is to buy items at places like yard sales, thrift stores, auctions, estate sales, and flea markets and resell them. You could sell on eBay, the Facebook marketplace, or a number of other sites/apps. To learn more, please see 40+ of the Easiest Things to Flip for Profit.
Work as a Virtual Assistant
Working as a virtual assistant (VA) is an excellent way to earn. There are a wide variety of services that you could offer as a VA, including managing social media profiles for clients, editing blog posts, designing graphics for blog posts and social media posts, providing customer service, and much more. For more details, please see How to Become a Virtual Assistant.
If you're interested in making money from home, be sure to check out this free workshop from Kayla Sloan. She shows how to use the skills you already have to start making money as a VA.
Become a Transcriptionist
If you have some typing skills, working as a transcriptionist is a perfect option. Most transcription jobs are extremely flexible and allow you to work whenever you choose. It’s great as a side hustle and won’t interfere with your life outside of work. To learn more, please read How to Become a Transcriptionist and find the best transcription jobs here.
This is another one that probably is not the first side hustle that comes to mind, but you can make good money by doing it. If you donate plasma twice per week (which is the maximum that is allowed), you can make $300 – $400 per month in extra income. That adds up to $3,600 – $4,800 over the next twelve months! To learn all of the details, please see Get Paid to Donate Plasma.
Taking online surveys is generally not the most lucrative side hustle, but it can be a good way to make some extra money from your spare time. It’s extremely flexible and doesn’t require any hard work. Our favorite sites are Swagbucks, MyPoints, and Survey Junkie, but you can see a bigger list here – 11 of the Best Websites to Take Paid Online Surveys.
Final Thoughts on How to Save $10k in a Year
Using these strategies, you should be able to increase your income, reduce your expenses, and save more in your bank account. You can use the money to pay off student loan debt, save for retirement, establish an emergency fund, save for a house, or any number of things. Now that we’ve broken down the steps of how to save $10,000 in a year, all that’s left is to take action and make it happen.
To get started, be sure to think about your own reasons for embarking on a money-saving challenge. In just one year, you’ll have an extra $10k in savings and your financial life will be significantly changed. Once you know how to consistently save and make the most of your money, you’ll be well on your way to financial freedom.