Reach $10K in 12 Months with This Savings Challenge!
You have a lofty goal in your sights…save $10000 a year. Maybe you are saving up for a down
payment on a house. Perhaps you are creating an emergency fund or rainy day fund. Or maybe you just want to challenge your budgeting chops and save an extra $10,000.
But how can you save $10,000 in a year?
Generally, you can save $10,000 a year by saving $27.40 a day, $192.30 a week, $384.62 every two weeks, or $833.33 a month. Making this happen will take discipline, cutting back, and increasing income.
Whatever your motivation, I am here to help you with actionable tips and advice on saving $10,000.
How Much Do I Need To Put Away To Save $10,000 In A Year?
Desmond Tutu once famously said, “There is only one way to eat an elephant, one bite at a time.”
The first steps towards a big goal always feel a bit overwhelming. It’s a pretty large amount of money.
Instead of focusing on the giant amount of $10,000, divide it into smaller savings goals according to the calendar or your payday.
Then you won’t be facing a five figure number, you’ll have much more manageable amounts to aim for. Assuming that you are trying to save $10,000 in one year (or 12 months), your smaller savings goals break down like this:
| Daily | $27.40 |
| Weekly | $192.30 |
| Biweekly (every other week) | $384.62 |
| Monthly | $833.33 |
If you are trying to save more aggressively, let’s say in six months, your savings goals break down like this:
How To Save $10,000 Fast (Six Months)
| Daily | $54.79 |
| Weekly | $384.62 |
| Biweekly (every other week) | $769.23 |
| Monthly | $1666.70 |
How To Save $10,000 In 25 Years
And if your goal is very, very long term, look how easily you can break down saving $10,000 in 25 years
| Daily | $1.25 |
| Weekly | $7.69 |
| Biweekly (every other week) | $28.57 |
| Monthly | $33.34 |
Ways To Save $10,000
Now that you know how much you need, you’ve got to figure out where you’ll get the money from. You can free up money to put toward your $10,000 goal in several ways.
Remember that you most likely won’t meet your smaller savings goals with just one change…plan on using several of these strategies to save your daily/weekly/monthly amount.
Reduce expenses to free up money in your budget.
Go over your budget with a fine-toothed comb and start cutting expenses. Look for categories that you can tighten up or even eliminate. If you are trying to save $384.62 every two-week pay period, what expenses can be reduced to help you towards that goal?
Some possibilities include:
Food/Groceries
- Eat out less or only occasionally (the American household spends too much on eating out)
- Shop grocery sales to lower your food budget
- Make coffee at home instead of buying it every morning
- Meal plan so you don’t impulse buy
Vehicle/Transportation
- Set up or join a carpool
- Use public transit to decrease your gasoline bill
- Bike/walk more places
Entertainment
- Cancel cable
- Cancel all but one streaming service
- Borrow/stream movies from the library
- Instead of buying books, borrow them from the library
- Find free local events to attend for dates/activities
Clothing
- Buy clothing from thrift shops
- Arrange a clothing swap with friends/neighbors
- Shop clearance sales and buy ahead a season or two
Housing
- If you are renting, consider moving into a cheaper place
- Own your own home? Consider renting a room (VRBO or a more permanent renter).
- Refinance your home with a lower interest rate so that you pay less each month. Put the difference into your $10K savings account.
Insurance
- Shop around to see if you can save money on car/rental/homeowners insurance.
- Lower coverage on older vehicles
Add Income To Meet Your $10,000 Savings Goal
The next strategy to get you closer to your $10,000 savings goal is adding income.
If your budget doesn’t allow for reducing expenses, adding income is an excellent way to accomplish your goal quickly! Here are some ideas.
Work extra shifts/overtime at your current job.
Tell your employer that you are available for any special projects or overtime. Tell other employees you are free to pick up shifts if needed and earn extra money where you are.
Get a second (or third job)
I have seen help wanted signs in many retail stores lately. People are out there shopping and eating out again, and waiting on tables is a clear way to bring in cash every shift.
Start a side hustle
- Drive for companies like Uber, Lyft, Ubereats, Instacart
- Teach online at VIPKid or Qkids
- Start your own Etsy shop
- Do handyman work
- Paint
Find Extra Money
There are lots of unexpected places you can find the money. Look for “hidden” money that can add up and help propel you closer to your $10,000 savings goal. Some ideas:
- Check your state’s unclaimed property division (usually online; make sure it is a legitimate .gov site)
- Look through drawers and cupboards for unused gift cards and change
Have Occasional Spending Freezes
A spending freeze is a specified period of time during which you commit to spending nothing on unnecessary expenses. It is a wonderful tool for paying off debt or building up your savings.
As you work towards saving $10,000, you can incorporate daily, weekly, or monthly spending freezes to put that extra cash into your savings account.
Earmark “surprise” money for your savings goal
The more big chunks of money you can throw at your $10,000 goal, the faster you can achieve it. During a normal year, there are often times that you end up with some extra money that can be put towards your savings goal.
Look for windfalls like:
- Tax Return
- Birthday/Christmas cash gifts
- Work Bonuses
Create An Account For Your $10,000 Savings Goal
Besides making it more official, creating an account for your savings can also help to grow your money through accrued interest.
Here are some banking account options to consider. This is a big deal—set goals.
Traditional Savings Account
The benefit of using a traditional savings account is easy access to your money. However, the variable interest rates (which rise and fall with the market) offer an average return of about 0.06%.
This means if you had $1000 in your account and if it was compounded annually, you would earn $60 in simple interest for that year.
High-Yield Savings Account
Many banks offer high-yield savings accounts. These accounts can have a considerably higher Annual Percentage Yield (APY) than a traditional savings account and often earn up to 16 times more interest.
This is also a compound interest account, which means that the interest in the account is also invested and will, therefore, earn you more.
The high-yield savings accounts with the best APY are often online…since they don’t have brick-and-mortar stores, they can pass along some of that savings to you.
The possible drawback of online banking is that your money is less accessible.
However, if you shop around, you can find online high-yield savings accounts that allow withdrawals and easier access to your money.
Remember that you are earning interest based on the total amount in your account, so it is best to deposit and then not touch it. Here are the best online high-yield savings account options.
Money Market Account (MMA):
Money market accounts are compound interest accounts with a higher APY than traditional savings accounts.
The difference between the MMA and a high-yield savings account is that MMAs often have minimum balances to earn the highest interest, limit check writing, and balance transfer privileges.
If you plan to deposit money and not touch it, an MMA might be a great option. Here are the best online MMA account options.
Incorporate Your Savings Goals Into Your Budget
Once you have determined how much you need to save each period, found the money to make it happen, and created a specific bank account, the next step is to make it official by adding it to your budget.
Dave Ramsey said, “A goal without a plan is just a dream.” Not only have you set an exact amount to save, but you’ve also thought through how to reduce your spending and increase your income to save that amount.
You have a plan to save $10,000, and adding it to your budget will make it an official part of your financial plan.
I advocate for a zero-based budget, in which you assign every dollar of your income to a job to make your money work for you.
If you aim to save $10,000, add a line item to your budget for the amount you are trying to save. Then, every time you get paid, whether it is a portion of your main income or from your side hustle, divert that set amount into your goal bank account.
Making your goal official by adding it to your budget is a monumental step.
Eventually putting money towards your $10,000 savings goal won’t be as difficult, it will just be automatic. And while life goes on around you, you will slowly build that $10,000 nest egg.
Make It Visual
If you live frugally and/or work hard to earn additional income, saving $10,000 isn’t a walk in the park. I love to create visual reminders of my financial goals to help keep me motivated.
That might look like a bar graph you color in every $100 increment. If you are saving for a down payment on a house, you could divide a house picture into segments and “build” it on a bulletin board as you save your money.
A visual representation of your savings will help you see your progress. Choose a visual that makes sense for your lifestyle and will help inspire you to keep on keepin’ on with your savings goal.
Celebrate Small Victories With Incentives
Similar to an inspiring visual, creating an incentive plan will help you stay on track with your savings and empower you to keep working hard.
Choose increments of saving that you can celebrate with an incentive. You could make it small and very regular (an ice cream cone every time you deposit another $100) or choose a pricier incentive that happens less often.
Perhaps when you reach the halfway goal of $5000, you can go out to dinner or splurge on a manicure or pedicure.
Creating a regular reward program can help motivate you to continue your good savings habits.
Sure, these rewards will bite into your savings total a little, but they also provide an incentive to work towards as well as a relaxing break from all of your hard work.
Final thoughts on how to save $10,000 in a year
It takes hard work, sacrifice, and diligence, but just like eating an elephant, you can accomplish this big financial goal by taking it small bit by bite.
These steps will set you in motion toward reaching your goal and give you motivation and inspiration to work hard.
As a financial coach, I recognize that achieving a goal isn’t always easy. But I can promise you that it will definitely be worth it in the end. As always, if you want me to assess your budget and goals, I am here to help! You can set up a one-on-one meeting or try my course.