The New Year is here and many of us have the same goal – saving money. Most want to simply start saving, but others want to save a significant amount of money, such as $10,000. You may think it’s impossible to save $10,000 in a year. Such a life-changing number feels impossible to achieve – right?
Wrong! Yes, it’s difficult to save $10,000 in one year, but it’s doable. As with anything in finance, saving a significant amount of money comes down to one thing – mindset.
Yes, it requires you prioritize your goal over other things. Yes, it means you must sacrifice to achieve the goal. However, just think of what you can accomplish with an extra $10,000.
You can do multiple things to save money fast, including:
- Pay off debt
- Save to buy a house
- Grow your emergency fund
- Get serious about saving for retirement
Sacrifice aside, looking back at the end of the year, you will see it was all worth it. If you want to save $10,000 in 12 months, our guide shares practical steps to make that possible.
The Math Behind Saving $10,000 in One Year
When you encounter any lofty goal, it’s best to break it into smaller chunks to help encourage action. Saving $10,000 in one year is no different.
Saving $10,000 in 12 months breaks down to the following:
- $193 per week
- $385 every two weeks (assuming a bi-weekly pay period)
- $834 per month
You can set aside money from each paycheck to help reach the above numbers. But it will likely take efforts across different fronts to reach your savings goal.
Ways to Save $10,000 In a Year
Saving a significant amount of money may feel so impossible that you may not even want to start. As the saying goes, you eat an elephant one bite at a time. Growing your savings is no different.
You want to locate where to trim the most fat and focus on those efforts to reach your goal. Knowing the amount you need to save each week or month is helpful, but you need practical ways to save money each month.
Here are nine practical ways to save $10,000 in a year.
1. 52-Week Savings Challenge
Saving money can seem more enjoyable when you make it a fun challenge. So, consider trying the 52-week savings challenge to help you meet your goal.
Generally, the 52-week savings challenge allows you to start saving by putting aside just $1 during the first week of the year. From there, your savings contribution increases by the number of weeks.
For example, here’s how much you will save each week:
- Week 1 = $1
- Week 2 = $2
- Week 3 = $3
- Week 4 = $4
By the 20th week, you’ll save $20, and by the 52nd week, you’ll save $52. By the end of the year, you will have $1,378 saved.
This challenge alone won’t get you $10,000 in one year, but it makes a significant dent. Consider making your savings contributions automatic, so you don’t have to think about it.
Chime Bank is an excellent banking option to help you start saving automatically. Chime members often get paid early with direct deposit.
They can also automatically transfer ten percent of their paycheck to a savings account each time.
The bank also rounds up all of your purchases and has over 60,000 fee-free ATMs. Chime Bank has no fees or minimum balance requirements and offers one of the best money saving apps in the space.
Read our Chime Bank review to learn more about the institution.
2. Refinance Debt and Student Loans
Debt makes it harder to save, but it’s not impossible to save money when paying off debt. The best way to save money when paying off debt is to refinance your indebtedness.
Refinancing lowers your interest rate, allowing more of your money to go towards your debt. This reduction can benefit you in one of two ways: you can continue to pay the same amount each month and kill the debt faster, or you can bank the savings.
The former is best for long-term wealth creation.
If you have credit cards, Fiona by Even Financial is our favorite option to lower rates. The platform allows you to simultaneously compare up to 17 lenders to find the best fit for your situation.
If you’re paying 15 percent or more on your credit card debt, it may be possible to save a significant amount of money.
Credible is a terrific option if you have student loans. The platform lets you compare up to ten lenders at once, offering a rate as low as 2.13 percent.
Read our Credible loan review to learn more about how the platform works.
Either of the two platforms above let you receive a quote in under two minutes. If you’re struggling with debt, it’s well worth the time to help save more money during the year.
3. Find a Side Hustle
If you feel that saving $10,000 in a year may be tight with your budget, consider increasing your income with a side hustle. You can only cut back so much and finding a way to make extra money is an excellent way to enhance your efforts.
Finding a side hustle that fits your schedule may be challenging, but it will be worth it when you start seeing the extra income coming in.
If you have transportation and some extra time, consider using DoorDash as that source of additional income. It’s quick and free to sign up, and there are no time commitments or fees attached.
Log in and work whenever you have the time. You will deliver food to people upon request.
DoorDash couriers must be at least 18-years-old, and you don’t even need a car to deliver meals. You can deliver for DoorDash via the following:
This flexibility is helpful because some rideshare companies, like Uber or Lyft, only allow cars, and they have to be in decent shape.
Since DoorDash is a delivery service and doesn’t involve transporting passengers, the condition of your car isn’t as critical.
What’s great about it is you get paid per delivery, and you get to keep 100 percent of the tips you receive. On top of that, you also get paid for mileage and your time. Many locations report earnings of $15 – $18 per hour!
Read our working for DoorDash driver review to learn how to maximize earnings with this opportunity.
You can also consider doing things like walking dogs, babysitting, freelancing online, rent out your spare room with Airbnb, or delivering packages with Amazon.
4. Refinance Your Mortgage
Another debt you can refinance is your mortgage. Refinancing your mortgage will replace your current one with a better interest rate.
Lowering your rate by even one percent may help you save thousands of dollars over the life of the mortgage. You can bank the savings, or use it to pay off your mortgage faster.
LendingTree is a trusted resource that can help you find a lower mortgage rate. You just have to answer a few questions, and with that, they’ll send the information out to their lender network.
Within seconds you’ll receive five different quotes.
Seeing these options side by side will help you make the best decision. If you have any additional questions, you can reach out to the loan officers representing the company you’re interested in, and they’ll be happy to address them for you.
5. Create a Budget
If you’re looking for ways to save $10,000 in a year, look no further than a budget. A budget helps you see where each dollar goes and how to increase savings,
Many view budgets are restrictive. They’re not. When done right, a budget gives you the knowledge you need to create the kind of life you want.
There are countless methods to budget. From pen and paper to Mint to You Need A Budget, there’s no real wrong way to budget.
Tiller is our favorite resource to help readers start to live on a budget. The Tiller platform connects to your bank and provides all of your spending information in a simple to use Google sheet.
Tiller can update it for you and even create new categories for you. They can also help you follow different budgeting methods, including:
You can customize the spreadsheet with any colors, font, categories, or even emojis. If you’re new to budgeting, read our guide on how to start a budget to take the first steps.
6. Automate Savings and Get an Interest Boost
Want to know another key way you can save $10,000 in a year that requires virtually no work? Automating your savings transfers each week or month is one of the top ways to save money during the year.
CIT Bank is one of the best choices to automate savings. Through their Savings Builder account, you can earn .40 percent on your spare cash.
You must open the account with at least $100 and commit to saving $100 per month to receive that rate. This setup is a terrific way to grow your emergency fund or simply increase your savings.
With horrible interest rates, that .55 percent rate isn’t too bad either.
7. Automate 401(k) Deposits
Automating or increasing your 401(k) deposits is an often overlooked way to save $10,000 in a year. While you hopefully won’t access the funds for a need, 401(k) deposits still count towards saving and growing your money.
And, if you receive a matching contribution from your employer, you’re receiving free money! Unfortunately, few people understand how to use their 401(k) properly to grow their retirement funds.
If that describes you, Blooom is a great resource to take your 401(k) to the next level. Blooom helps you properly diversify your investments and lower your fees.
The platform offers free analysis and charges $10 per month if you want them to help you monitor it throughout the year. Paying the fee unlocks features, including optimizing your portfolio to align with your goals, expert financial help, and minimizing 401(k) fees.
Read our guide on how to set up your 401(k) for resources to use if you plan to manage it personally.
8. Cook More at Home
Eating out often is a terrific way to sabotage your efforts to save $10,000 in one year. It’s easy to believe that eating out is insignificant. However, it can quickly add up to needlessly spending thousands of dollars per year.
You may be surprised when you realize how much you spend on restaurants and work lunches throughout the month. Life gets hectic, but the cost isn’t worth the lost savings. Meal planning is the best way to reduce eating out and save money on food costs.
If you’re running low on meal ideas, $5 Meal Plan is a great option to solve the problem. The platform sends meal plans and shopping lists so you can easily prepare meals that the whole family will enjoy.
Each week, new meal plans arrive in your email inbox.
You’ll have five entrees with sides included. The meals typically include one freezer-friendly meal, one 20-minute meal, one slow cooker meal, and more. The service is $5 per month after a free 14-day trial.
9. Ask For a Raise
Earning more money at your 9-5 job will make the road to saving $10,000 in a year significantly easier. Instead of spending the raise, funnel it all to one of the top high-yield savings accounts to help increase your savings.
If you’ve been putting in extra effort and contributing more to your team, ask for a raise.
Don’t just tell your boss that you want more money. Provide him or her with quantifiable reasons why you deserve a raise.
The more you’re able to communicate your worth, the better chance you have to receive the raise.
Finding a way to save $10,000 in a year might sound like a difficult task when you first think about it. It may feel like a lot of money, and it is.
However, it’s not that much to save when you view it in light of significant needs like buying a house, saving for retirement, or paying off debt.
Starting is the most challenging part of saving money. If saving $10,000 feels burdensome (and it likely will), break it into smaller chunks. Doing so helps build the momentum necessary to make your goal a reality.
Yes, saving $10,000 in one year requires sacrifice. But, seeing your bank account balance grow throughout the year makes it all worth it.
What ways do you mindlessly waste money? How much money would you like to save this year? What’s one big goal you want to achieve this year?
*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.