Saving money comes down to two things: earning more and spending less. If you want to save $10,000 in a year, you need to make drastic changes to your income and spending habits. Saving any amount is difficult especially in a challenging economy and when the price of goods constantly seems on the rise. You spend most of your days working at your job or business and have time to focus on making more or researching saving opportunities. Also, very few people want to change their lifestyle and become a Grinch when it comes to anything fun or even mildly frivolous. With a little bit of discipline and creativity, it is possible to be penny-wise without being penny-pinching.
It is possible to save $10,000 a year with the following changes. Before all else, it makes sense to look into opportunities for increasing your earnings so you have more disposable income to save.
Understand Your Budget
Before you make concrete savings goals, you need to understand how much money comes in and how much you spend on regular bills and incidentals every month. If you want to save $10,000 a year, you need to put away just under $1,700 per month. For many families, this is a considerable chunk of money, so it takes careful planning.
Write down everything you earn and everything you spend for two or three months. Categorize expenditures to see where you can cut in order to meet your savings goals.
Make More Money
One of the easiest ways to increase your spending is to boost your income or create another one. Start with asking your boss for a raise if it is appropriate to your career position. If possible, consider looking for a new job that may pay you more. Other options for extra funds include side hustles, part-time jobs, or starting your own business with minimal upfront expenditure. A few rideshare app sessions a week provide money you can put directly in your savings account. If you start online sales of items you do not need around the house anymore and can boost your financial buffer considerably.
Spend Less Money
There are two main ways to spend less money every month. First, you can simply stop paying for certain things. Second, you must decrease the amount of money you pay for essential things. This is where looking at your budget comes in. If you buy a $20 lunch out every day, for example, you can easily stop paying for it and instead bring a sandwich from home that costs $5 instead. With such a simple change, you already have about $450 to put toward your savings goals.
Spending less money on the things you need is a way of saving more without changing your lifestyle all that much. Shop around for the best prices on phone and Internet service. Consider moving to a less expensive apartment or refinancing your mortgage. Look for the most affordable grocery sales in your area rather than always shopping at the same upscale store.
If you want to know how to save $10,000 a year, the process is very simple but presents an overall challenge that some individuals or families may not be comfortable with. Ultimately, it depends on how much you earn and what you can do without.