Financial experts all agree on one thing — Unless you want to live in extreme poverty or become homeless, the key to living in the present is to be mindful about what you spend.
If you want to save $10,000 in a year, you need to make sure you’re on top of managing where your hard-earned money goes. That’s why this blog post is here to help you.
To save $10,000 in a year, you’ll need to make some sacrifices. You need to refrain from what you can’t afford to spend.
With how fragile the economy is these days, especially after the pandemic, it’s only clever to ratio your next paycheck wisely.
9 Easy & Simple Tips to Save $10,000 in a Year
The struggle for being financially sound is hard to obtain in today’s time. The only thing viable for us to do is hope for the best.
Now, these times call for some precautions in our spending, which I have strictly decided to abide by. Ranging from budgeting my monthly expense to adding a maximum limit to the cash I can have at once.
One of such principles is to start saving around $10,000 per year. Now given the circumstances, this may seem unattainable, but trust me, once you are done reading this, you’ll have all that it takes to save your own $10,000 in just nine easy ways!
#1 Update Your Budget
Sometimes we adopt a certain budget for ourselves and over time, this may result in a surplus of how much we need to spend.
Be it a decrease in a certain aspect of our spending or just inflation working its works, making mundane things more costly. Indeed, we should routinely update our monthly or weekly expense schedule.
This way we can be well aware of how much more a certain prospect in our budget now costs and how to ideally overcome it.
Here are the reasons why budgeting is important.
How to Do That?
Once you can easily distinguish which areas now cost more, you can work to remove them, either by a factor or entirely from your expense list.
If it is not as important or easily avoidable then it should take no time for you to cut its percentage out from our expense. However, if the cost is unavoidable, you can also look for other areas where you can cut to meet the cost.
This way, any amount you don’t spend can be put aside for your $10,000. Not only saving you from the unknown extra expenses but also giving you the ability to save up in the long run — Easy Peasy…
Another way to update your budget can also be to adopt the cost-benefit agenda. In this, you can create an imaginary scale that weighs the benefits of two different expenses. If one item overpowers the other in its benefit then you should prefer the former in rationing your money allocation.
Similarly, if you find that a product or service does you more harm than good. Then you can opt to either cut it out completely or reduce its overall percentage. This applies the same if the product has any sort of cheaper alternative.
With the cost-benefit agenda, you can assure yourself of utilizing minimal funds; while simultaneously achieving maximum gains. All this is done not at the expense of your standard of living. Any amount saved from this agenda can be put to reach your ultimate goal.
#2 Spend Less On Outdoor Dining
This unfortunate step must be taken to cut out monthly costs. Oftentimes, eating out is less of leisure spending but more so a consequence of our laziness.
Here’s how much you should spend on outdoor dining.
Look at it this way, when you decide to eat out, does it have anything to do with your lack of desire to cook something, or does it count as part of treating yourself for your hard work.
If the answer to that question is the former, then it’s time you cut back on your dining out.
How to Do That?
Opt-in for home cooking. Trust me — It’s not as bad as it seems real.
Once you get the hang of it, cooking will seem less like a chore and more like a means to de-escalate the arduous hours you spend at work.
According to some surveys, an average family spends around $262 per month on eating out. This nearly averages to around $3000 spent in a year.
Now if you reduce that $3000 spent by eating at home, you can easily squeeze in enough to make a grand total of $10,000 by the end of the year.
Give yourself a desired goal and a healthier body by spending less on eating out.
#3 Try No-Spend Days Policy
This may seem bizarre to many but, an easy and effective way to ensure you can have enough to save would be to adopt the no-spend day policy.
How to Do that?
Basically, this would be where you set out certain days in the week where you work your hardest to spend not even a single dollar on any and everything. No need to indulge in any unnecessary spending.
All you have to do is to make sure you get your daily things done beforehand, like filling up your car tank and groceries. Other than that no other payment should be made.
Of Course, you don’t have to reach the point of becoming a cheapskate; saving at the cost of your quality of life. But to the point of making economically sound decisions. And refraining from anything which has no relevant gain.
#4 Make Compound Interest Your Friend
It’s time to introduce yourself to the wonderful world of compound interest. A shorter path to getting your $10,000 by the end of the year, would be to invest in a compound interest account.
How Compound Interest Works
How this works is, that you initially open up an interesting account and invest your principal amount. Having it gives you a compound profit on the principal amount.
So for instance, if you were to initially invest $10 as your startup, you’d get its designated percentage of interest in its first tenure, and then, the second interest would be on the secondary amount. Not the principal amount.
As the cycle continues, you would be receiving profit on already existing profit. This gives you a compiled income with no effort at all.
Benefits of Compound Interest
A simpler way to explain this would be that the compound phenomenon is just interest on interest. And this gives you twice your initial investment in just a matter of months.
If you entertain the compound phenomena, then you can expect yourself to get $10,000 in even less than a year. This gives you another means of earning, lessening your burden on only one prospect of your revenue.
#5 Make a Savings Goal
This may seem like a pretty easy task but it isn’t like it.
For starters, life can sometimes really put you in tough predicaments. Leaving you empty-handed and then, saving doesn’t sound so easy.
Although it may seem difficult at first; cutting back a few leisure costs to meet your goal, in the long run, will make future savings easier.
Once you strive to reach your goal you’ll be equipped to reach any extent to meet it. The fiery passion should compel you not to back down and eventually, result in your victory.
How to Do That?
No — You most definitely do not need that $100 dress. Or those $250 pairs of heels. If you succumb to the vicious hands of advertisement, you’ll never be able to reach your aim.
Now I get that seeing the new spring collection plastered over every other billboard is quite the temptation. Blurring your lines of need and want. But you must think rationally. Is this something I cannot live without?
If your answer is no then, I’m sorry to break it to you but those shoes can wait. Instead, you can purchase them off-season or when you’ve reached your monthly limit in attaining your objective.
Here’s more to know about how to learn to save money!
#6 Engage in a Side Hustle
Sometimes, it’s hard to cut back on some expenses and find any areas where you can cut back. For many, their pay does not fully cover the cost of their living. To them saving is a far-fetched concept when you barely make it through the week.
Even for those who do earn a lot; your pay corresponds with your monthly expense. The bigger the salary the more your expense rate will be. So, to find a means where you can earn enough to save up would be to engage in a side business.
Although there are a few setbacks in starting your side hustle, it’s not impossible to set upon. It should only be equipped enough to give you a decent amount. This way you can ease the burden on yourself and make enough to set aside to use later.
#7 Stay Away From Burnout
Another important factor to look after is to make sure that while in your endeavor, you don’t lose yourself to the burden of saving. That is, you must work in a way where you are not psychologically drained.
Burnout is real and can suck every fiber of determination from you. In your advent to have an extra source of income or to cut back a few costs you may find yourself in the shackles of emotional drainage.
The best way to avoid this is to make sure that you’re allowing yourself to routinely relax from both your side hustles and your actual job.
Along with this, you must also allow yourself to relax and be pampered once in a while.
If you’re emotionally apt, then you can assure yourself to show your utmost productivity hence earning enough to reach your goal.
#8 Divide Your Goal Into Smaller Goals
Let’s be real, you can’t possibly conjure up $10,000 out of thin air. To actively carry out the effort of having such an amount in twelve months would require you to plan it out according to your situation.
One simple way to keep a track of your efforts would be to divide your goal into mini-goals.
How to Do That?
Think of it this way, you have a project due in four months. Now the most efficient and beneficial way to complete and submit your project would be to do a little every day. Eventually setting a limit to reach every month for the next four months.
This way you can assure quality and minimal stress induced on you. Not only will you get your desired results but you’ll also feel nice doing so. This, compared to working haphazardly with no set limit to reach, will cause more harm than good.
In the same way, to reach a goal the best way is to divide it into smaller ones. This way you can keep in check with your progress easily. Being aware of how much you have and how much you’re short in attaining your target.
#9 Save Every Extra Cash You Get
Lastly, and I can’t mention this enough, try your level best to store every extra dollar you’re able to keep. It may seem impossible and downright ridiculous at first.
How can you possibly find cheaper alternatives and still maintain your quality of life?
But as you dive deeper into the world of finance you’ll see that anything is possible.
Bonus Tip! — Get Rid Of Services You Can Do Yourself
It’s time to stop being lazy and look for ways where we can ensure quality with zero expense.
An example would be to quit going to the carwash instead of just washing your car yourself. This not only saves you from the time you waste waiting for your car to get clean but, you can also indulge yourself in healthy activities on the weekend.
This way, you can find a means to destress and cut up on the pointless cost you had looming over you.
Now that we’ve looked at every aspect in minute detail, I think it’s safe to say that we’re fully equipped to move on to our next step.
Yes, the journey to reaching $10,000 seems difficult and filled with endless temptations but, if you can envision the end benefit then nothing can come in your way.
No Shame in Saving
Don’t think of cutting back a few expenses as a bad thing. There’s nothing wrong with looking for the long-run advantages.
Instead, you should strive to enable yourself to survive in the rapidly changing world. With no idea of how much the prices can inflate or how many more customs duties are applied, the most clever survival would be to keep a stash of a fixed amount of cash right at your disposal.