Here are some ideas on how to save $10,000 in a year. Use this 52-week money challenge to boost savings, and work toward financial freedom.
How to Save $10,000 in a Year: Start your Engines!
Dollars are part of life. As best I can estimate, most of us could make good use of $10,000. However, dollars go quick! It can be a challenge to manage regular expenses, let alone the notion of saving this much cash.
Let’s take a closer look at what you can implement on your own, the tools you’ll need, and a suggested schedule to achieve your goal. I have used this approach several times, updated and refined it accordingly, and have found it works well for any level of savings. Use what you can to further build Mêtis in your Money Matters!
Here we go!
Budgeting will help you Save $10,000
Budgets are essential. Like any destination, you’ll need a route and a plan to get there. A working budget is your most important tool. Like any good habit, it will take some time to set up; it gets easier from there. Don’t get overwhelmed! My experience has been that keeping a budget gets much easier over time. The same is also true when learning how to save $10,000 in a year.
Breakdown of Milestones as you Save $10,000
With your budget in place, one of the ways you can think about this savings goal is in terms of a sinking fund. Save $10,000, then cash it out for your desired goal (e.g. an epic vacation).
Set milestones along the way! Measure your hard work and find ways to celebrate the wins you have earned. (You’ll also be forging good habits, too!)
Double-down on the enjoyment by using this opportunity to crush your financial management goals so you can enjoy the reward of your hard work guilt-free.
Before you try to Save $10,000: An Honest Assessment
There is a lot of value in setting realistic goals for yourself. Push yourself, don’t hurt yourself. For example: if you are drowning in credit card debt, the first goal should be to get out of credit card debt. Good news – make that your $10,000 goal! Then, next year (or whatever time frame works for your financial situation), set mark your next goal. If you’re not chipping away at solving problems and working on better habits along the way then you’ll be promoting poor financial choices and cultivating bad habits.
The question, how to save $10,000 in a year, is made up of many pieces. Be honest with yourself, and challenge the status quo in your life. Keep working, keep hammering away! You’ll get there sooner than you realize.
Non-Mortgage Debt must go!
This is important, especially with high-interest loans. My friend, I have been there; it is so very nice to be free from the shackles of credit card debt. Then, after credit cards, focus on the next high-interest loan. One by one, they will fall and you’ll be able to look back on your progress and gain more determination in your next battle. Stay with it! You can do it.
Fall off the horse? No worries – I have many times, too. Get back on, and keep riding toward your financial goals!
How to Save Money with a Low-Income, and Building Wins!
When I first joined the military, and for the 21 weeks of training, I had almost no money. One of the lowest grades in the military, I was truly building from the ground up. My calculated hourly wage was one of the lowest salary points in my life. However, by comparison, I had a lot of money saved relative to other later jobs with a higher hourly rate. The military did provide the essentials during training, and I had no time for spending money. However, over the same time, many others managed to spend every penny they had and more. The key was saving a little every week, managing my expenses, and building good financial habits.
My wife and I realized as the income increased over the years so did the opportunity for more spending. Without good financial habits and discipline, any of us can fall deeper into debt. Living beyond our means was misery for us; we’ll never go back to that.
Lessons we Learned:
- Budget, as we mentioned earlier. Are there budget items and expenditures that can be more effectively managed?
- Cut expenses where possible. Not fun, but necessary. For us, we tried to “rip off the band-aide” with a no-spend challenge so we could get it over with.
- Increase income. Also not a lot of “fun” per se, but this is also very effective. Low-income or not, keep updating your resume, growing, and bettering your personal brand.
- Save what you can, and don’t compromise. Target debt, household expenses, or Christmas gifts ahead of time!
- Don’t touch your retirement savings. Ultimately, kicking problems down the road is not solving for anything. Especially earlier in your career, cashing out retirement is not good. The time value of money is on your side – take advantage of it!
- Just start… and be willing to fail! It can be very overwhelming, but it is crucial to start. The first battles can be some of the most challenging ones to fight. Don’t fall into the trap of waiting for the “right time” to change your life. Give yourself room to fail and grow from the learning!
How to Save Money Fast: Automation and Discipline
Use motivation to build discipline in your finances. With your commitment to yourself and your family in place, your discipline will get you through to the end; it will not be by accident! With your empowered self in mind, here are a few suggestions and examples for planning purposes.
Put Your Plan into Action
Nice work! Now, let’s put up a few milestones. We’ll assume this is a cash-only (no interest) savings schedule for your progress. With any kind of interest, this timing will change in your favor; at the end of the year, you’ll have even more. We’ll also spread this over 26 weeks (for the standard bi-weekly paycheck).
So, here’s the place to start. Again, keeping in mind that this is assuming no benefit of interest, this is the most conservative approach (the most you’ll need to spend) to achieve the goal. If you have an account with interest (highly recommended), the ending balance will be higher, or you can save a little less each interim period. Also, keep an eye on inflation (especially over longer-term goals) which will reduce your purchasing power.
| Time Interval & Suggested Milestones | Action Item & Contribution | Weekly Total |
|---|---|---|
| Week 0 (Launch!) | Setup budget, etc. | $0.00 |
| Week 1 | $385.00 | $385 |
| Week 2 | $385.00 | $770 |
| Week 3 | $385.00 | $1,155 |
| Week 4 | $385.00 | $1,540 |
| Week 5 | $385.00 | $1,925 |
| Week 6 | $385.00 | $2,310 |
| Week 7 – Milestone (Past 25% already!) | $385.00 | $2,695 |
| Week 8 | $385.00 | $3,080 |
| Week 9 | $385.00 | $3,465 |
| Week 10 | $385.00 | $3,850 |
| Week 11 | $385.00 | $4,235 |
| Week 12 | $385.00 | $4,620 |
| Week 13 – Milestone (Half Way!) | $385.00 | $5,005 |
| Week 14 | $385.00 | $5,390 |
| Week 15 | $385.00 | $5,775 |
| Week 16 | $385.00 | $6,160 |
| Week 17 | $385.00 | $6,545 |
| Week 18 | $385.00 | $6,930 |
| Week 19 | $385.00 | $7,315 |
| Week 20 – Milestone (Past 75%! Finish Strong) | $385.00 | $7,700 |
| Week 21 | $385.00 | $8,085 |
| Week 22 | $385.00 | $8,470 |
| Week 23 | $385.00 | $8,855 |
| Week 24 | $385.00 | $9,240 |
| Week 25 | $385.00 | $9,625 |
| Week 26 (YOU did it!) | $375.00 | $10,000 |
Eliminate the Guess-Work
With your blueprint in hand, I highly recommend automating your contributions. I have set up and automated several different accounts for various needs, and I enjoy the fact that I don’t have to manually move the money each month. With automation, my accounts take care of the work and free up my time to focus on other tasks.
If this is a Sinking Fund that you plan on needing on a regular basis (e.g. saving for a yearly family vacation or Christmas gifts) then you might also consider opening an account just for this purpose. That way you can automate your contributions, rinse, and repeat the process as needed. Sounds like something you might be able to use? Check out my Sinking Fund post for more details on that.
Your Path to Financial Freedom
I tend to believe that nothing worthwhile is easy to do, and money matters are a great example. The journey and goal to save $10,000 will take sweat! My personal weakness with saving money is towards the end: as the pot of money starts to grow so does my desire to buy some new shiny toy! That’s where the discipline will help you stay strong. When I think about how to save $10,000 in a year, I’m immediately reminded of a journey. Not a straight path, cut-and-dry, and obstacle-free. Keep a proper mindset as you embark and travel toward this goal! The only real loss is when you decide to quit moving forward.
Motivation, Curveballs, and Mistakes
Give your self room to fail. None of us are perfect, and setbacks are part of life. Never waste a failure – learn from what went wrong and pickup where you left off.
Some of this will come from times when life just doesn’t play nice with your beautiful plan. This is where things like an emergency fund come into play, but you can only do so much. It can be a grind, and those moments are tough. Don’t worry, they too move on eventually and leave us stronger.
Work Hard, Play Hard! Balance.
Don’t forget to take time to celebrate the wins! You’re working very hard to change your financial situation, and the rewards are part of that journey. Further, solidify good habits with milestone awards that you and your family can enjoy. For example, my family likes pizza… A LOT! After hitting our pre-set milestones we take a night off from cooking and descend like a pack of hungry pizza-loving wolves upon our favorite food.
Increase Your Income
I know this isn’t as easy as snapping your fingers, but I do want to mention this as an important step to investigate. From personal experience, I was able to dramatically change my finances and work-life balance with one career move. Looking back, I remember wondering if it would work and coming up with reasons in my head why I shouldn’t try. However, I am oh so very glad that I stuck with it and came through the other side better off.
Now, that isn’t always an option, and I can appreciate that we are all in different situations. If a career change, raise, or vocational change isn’t in the cards for you, then try taking a hard look at side-gigs or passive income. Maybe you’re in a good situation to capitalize on a hobby, or other skill set?
Regardless of your financial path, the point I’m making is to think about ways to increase income along with the steps we’ve already mentioned. Regardless of what you put the money towards, saving $10,000 will become easier with each positive change on this list. So, as you ask the question “How to Save $10,000 in a Year” you can begin to piece together a plan that works best for you, your family, and your finances. Don’t be afraid to customize the plan accordingly!
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