Saving $10,000 can be perfect for your rainy-day fund, to use towards a large purchase like a house, or maybe for something else you want to save for this year. While saving five-figures can seem pretty daunting of a task at first, reaching $10k saved is much more attainable than you might initially think.
However, if you want to save this much in a year you will have to breakdown your income and put a plan together that you’ll stick with. Now pending your finances and income, you might find this process will take you the full year in order to save this much. Or you might even be able to save $10,000 faster than a year (and even save more!).
1. Change your mindset
What holds most people back from financial success, is their mindset and attitude towards money. Start looking at money as a tool and create a plan for yourself to succeed. You may have setbacks, but you can’t let that deter you.
Commit to saving $10,000, regardless of how easy or challenging it may be. You’ll figure out what you need to do and be more aligned with reaching this milestone.
2. Put together a simple budget
Organizing your spending, savings, and figuring out where you can save is not always fun, but it’s necessary! When you have a savings goal of $10k in a year, your budget will be a guide and help you reach that number. A budget helps you catch wasteful spending, where expenses can be lowered and will show you where any income gaps might be.
3. Review your expenses rigorously
So if you use a budget or budget calendar, you’ll be able to monitor your expenses. But, you’ll need to take it one step further pending your current income. Since how much you can save might be more difficult if you already are on a tight budget, you need to be on top of your expenses more aggressively.
Your big three expenses typically are housing, transportation, and food. So that is a great place to start! But you might also need to do other things where that extra amount can be put towards your savings.
4. Pay yourself first
As soon as any income hits your checking account, you are immediately moving a set percent or amount towards your savings and/or your investment accounts. The goal here is that before you pay any bills or touch the money for spending, you’ve saved it.
One way to make this process easier is to automatically save a set amount on specific days. This automated rule is something pretty much every bank can do. Now you aren’t tempted to spend first or use that money and are putting money away consistently on a recurring cadence.
5. Earn more money
If you have looked at your budget and run the numbers, you might realize that saving $10,000 in a year will be difficult. It is a lot of money and pending your income, it might just not be feasible to put away $800+ per month.
However, before you quit on this goal, you can look at putting a plan together to make more money. Even if your salary affords you to save $10k, you might want to earn extra money anyway to lift the pressure and even reach this savings goal sooner!
6. Track your progress
Any time you set goals for yourself, it’s highly important that you continue to track and monitor your progress. It’s fairly easy to set a financial goal like saving $10,000 in a year, but you need to keep tabs on where you stand each week, each month, and even each quarter.
How you track your progress might vary from someone else, but do what makes the most sense for you. By tracking, you’ll be able to see where you stand and if you need top pivot somewhere because you are falling behind a bit.
7. Celebrate each month or milestone
To combat being bored and help you stay motivated, find ways to celebrate your efforts and progress. Naturally, you are looking to save money, but find ways to treat yourself at various milestones. Maybe you do something simple at the end of each month or when you hit specific targets every $1,000 saved.
These celebrations give you something to look forward to, keeps the process somewhat interesting, and can be fun pending what you do. However, you choose to celebrate, be conscious of your budget still, and don’t let it derail you from your ultimate savings goal for the year.