How to save $10,000 in a year is the question of many. Today, you’ll get it answered. Whether you plan on saving for a trip, college, or a house, find out how you can take that amount to 10K in a 12-month!
When the majority of us think about saving money, we think of a very slow and careful process of accumulating tiny amounts over a long period of time, until we finally see the results in 10, 20, or even 40 years from now.
I’m here to tell you that it doesn’t always have to be like this. How? Read below to find out how to save $10,000 in a year.
8 Ways You Can Save $10,000 In a Single Year
To save $10,000 in a year, your average savings have to be $27.40 per day, or $192.30 per week, or $833.33 a month. To look at these amounts, you might already be thinking it’s easy, but let us tell you now that all the methods and tips we give below will require discipline and some amount of personal sacrifice.
1. Change Your Eating Habits
Ordering take-out and dining in restaurants is always more expensive than buying groceries and cooking at home. One of those birthday dinners at a nice restaurant that costs $90-100 per person can equal the better part of a week’s worth of groceries if you shop smart. If you’re looking to save $10000 in a year, you need to change your eating habits ASAP.
Changing your habits might mean some extra work and time, with the grocery shopping, cooking, and cleaning up afterward, but it all contributes to a healthier lifestyle and a healthier bank balance.
The USDA says that the average weekly cost of groceries for 2 people between the ages of 19 and 50 is $148. Conversely, the blog MoneyUnder30 pointed out that the average commercially-prepared meal costs $13, which over a day means an average of $39 per day. That comes to $273 per week.
Even just using these conservative averages, you can save $125 per week, or $600 a month. That’s most of your $833 target to save 10000 in 52 weeks.
2. Cut Out Your Car
Having your own car is expensive per se. Cars seem only to cost us money and very rarely make us money unless we drive for Uber or Lyft. You have gasoline to pay for, insurance, registration, maintenance, and then there are the breakdowns and emergency repairs hanging over you.
There are ways to bring your car into your savings plan, however. The first idea is to simply get rid of it. If you want to save a lot of money fast, then switching to public transport for your daily commuting will save you hundreds, probably thousands of dollars over the course of a year. It would be a very large contribution to your goal of saving 10k in a year.
If your area is not well served by public transportation, then consider an alternative such as carpooling. You can cut down on gas costs by riding with your colleagues or friends.
If you keep the car, there’s nothing you can do about insurance payments, but you can always shop around for cheaper premiums, especially if you have accumulated several years without having claimed. Any of the above measures with your car will get you a good deal closer to your savings goal.
3. Trim Down Your Social and Entertainment Budgets
Next, we come to one area that many find very hard to budget within, and that’s social life and entertainment. Many are afraid that to budget these areas will actively reduce the quality of their lives. It can seem that way at first, but when you see just how much money you can save in a short time, you may change your mindset on that subject.
How to save 10k in a year while maintaining your social life, then? You can save a great deal by limiting your bar nights to only one every couple of weeks, or even every month if you don’t go out on a weekly basis.
Eventbrite claims that the average event-goer spends $81 on a night out. Therefore, cutting out two of those and spending $20 on some home-based entertainment instead can result in $61 saved per time. If you do cut one per week, that soon adds up to $244 a month saved; steps like this one is how you save $10 000 in one year.
4. Consider Relocating
If we’re looking for ways to save 10000 in a year, there’s another important factor to consider changing. Downtown rented accommodation has a great pull for us when we’re young and want to live close to where all the action is. If you want to be serious about saving money, however, you should consider relocating to a different living area.
We don’t deny that the sheer convenience of living downtown can appear to have financial advantages – less money spent on transportation, for instance – but these advantages pale in comparison to the savings you can make by moving to a cheaper neighborhood.
If your city has ample public transport like subway, buses, or monorail, then there’s no reason not to live a bit further away and save big on both rent and utilities, as well as local taxes, building management fees, or even groceries!
You might pay $1500 a month for a studio downtown, but only spend around $500 for the same space in the suburbs. You could even cut down to $1000 a month and end up with lots more living space, which is yet another advantage, especially if you can then use the additional space to share that cost with others. This is also how you can save 10000 in a year with much more ease.
5. Refinance Your Home
If you’re fortunate enough to own a home but you still owe on the mortgage then you could make significant savings each month by refinancing it under better terms. It’s quite possible that in the years you’ve owned the house and been paying the mortgage, your credit rating has gone up and you could get much better terms.
Refinancing at a lower rate of interest won’t change the amount of capital you’re paying on your property, but it will bring down the rate of interest and therefore make your monthly mortgage payments lower. You can simply channel those savings directly into your savings pot.
The average monthly mortgage payment in the US is about $1,600 according to the US Census Bureau. Reducing that amount even by $100-200 is a big contribution to the monthly $833 you need to save 10000 in one year.
6. Rent Out a Room
Another scenario for homeowners who also have empty bedrooms is to consider renting one out. Many people buy a property with spare bedrooms thinking they will always be welcoming friends and family to stay over. They soon discover that they’re paying for that extra space 95 percent of the time and only getting that use they imagined the other 5 percent of the time. The answer, then, is to get a lodger and rent that space out.
You have to be mindful of who you allow into your property to live, of course, but it can be quite an enriching experience to gain a roommate or housemate. Besides the extra hundreds of dollars a month you can gain, the lodger can assist with chores and maintenance of the property, too.
Furthermore, you’ll have company and possibly a whole new circle of friends if you connect with your new roommate’s circles. That has its own additional benefits, becoming the best way to save 10000 in a year as you won’t be doing any active work.
7. Get a Side Income
When looking for ways on how to save 10000 dollars in one year, don’t rely only on cutting back, but also see if you can find ways to augment your income. The ideal solution is to find something that can be developed into a passive income stream, such as a blog or freelance designs that you can sell on platforms like Teespring. In this way, you can apply minimum input but gain income even while you’re asleep.
If you have the time, you can also use active methods to earn money, such as taking extra responsibility or additional shifts in your day job.
You could also create a side gig such as freelance writing, language tutoring, or something else that you can do in the evenings or weekends. Even a few hours a week being paid as low as $10-15 an hour can add $30-45 per week to your savings pot.
8. Be Thrifty with Utilities
If you’re wondering how can I save 10000 in a year only by cutting out expenses? here is the ultimate way: be thrifty with utilities. The average American is spending roughly $110-115 a month on electricity and about $30-35 per month on water. That cost goes up if there are multiple people living in one space, especially for water where it’s estimated that one family can use as much as 300 gallons of water per day.
If your total monthly savings target is $833, then cutting down utility costs is only going to be a small part of that, but if you can cut your bills by 15-20%, then you’re still making a good contribution to your goal and easing financial pressure off of yourself at the same time.
So, to that end, cut out those luxurious baths you treat yourself to and stick to quick showers instead. Switch off lights (and switch to energy-saving bulbs) and other electrical outlets in rooms when you are not using them, and only charge your devices when you have to. Simple habits like these can help to cut down overall utility costs.
To succeed in your goal of saving up 10k in one year, you need to exercise strong fiscal discipline, and it might be difficult at times.
There are a lot of spending temptations in our world today, most of them constantly bombarding you via your smartphone and other online channels. They also pop up in ads when you’re scrolling through social media or browsing other sites. It’s even harder now that so much advertising is tailored toward you personally based on your search and purchase history.
If you stay strong, however, and strive to reach this goal, then the end result will be more than worth it. Imagine at the end of a single year having a whole $10,000 of spare cash to do with what you like.
The money-savvy among us will turn that one year of thriftiness into a lifelong habit that brings thousands in savings on a yearly basis. That’s how you end up with a real retirement pot with which to enjoy your golden years later on.