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As I was reading about topics on saving, I was shocked by the data I discovered:
According to a GOBankingRates survey, 57% of Americans had less than $1,000 in their savings in both 2022 and 2023.
This figure of 57% is alarmingly high, representing over half of the American population.
What’s even more shocking is that those aged 45-54 had only $100 or less in their savings accounts. Meanwhile, individuals over 65 are most likely to have between $2,001 and $5,000 in savings.
Now, if you belong to those groups, I can honestly say that you can break through those amounts.
I don’t want to tell you that saving $5,000 or $10,000 is a walk in the park, but with the right habits and mindset, it is very possible. I did it in my early 20s and no matter what age you are today, you can too.
However, the hardest part is always the beginning. The start of the journey.
Once you get the ball rolling, it gets easier from there. You will see a massive shift in your spending habits and how you look at money.
With the proper investment of money and time, you might even hit the $10k goal in just 6 months.
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Is it possible to save 10k in a year?
You need to go into this challenge with the right mindset. If others have done it, so can you.
Most people dismiss the idea of saving $10,000 because they see that figure and they immediately think it’s too big. They’ve already given up even before trying to work for it.
The first thing you need to do is to not look at the end goal. You can, but put it in the back of your mind. Looking only at $10,000 can discourage you knowing that it’s so far away.
What you need to do is to identify your next step which is breaking the numbers down into smaller pieces.
10,000 / 12 = ~$834 per month.
To save $10k in a year, you need to earn at least an extra $834 per month.
It’s not going to be a walk in the park to reach that goal but it is very attainable with today’s opportunities. And you can start your journey to reach $10k in savings through the list that I’ll share with you below!
How long does it take to save 10k?
As much as I want to say that you could earn it in X months, the honest answer is it really depends.
I’ve seen people save it in 6 months. Some less than that. While others get paid $10k monthly. Personally, I’ve added $10k to my savings just by blogging.
So there’s no exact answer to this question.
The fact that you’re reading this blog means your old ways are inefficient.
Something has to change in your lifestyle. This could be your spending habits, your thoughts toward money, how you handle it, and how you can earn more of it.
The list I’ve shared in the next section will help you achieve all of these things.
I came from $90,000 in debt to saving $100,000 in net worth by the age of 26. All of this without having a six-figure income.
I’ve shared everything that helped me reach this figure below!
1. Create A Budget
The first step on how to save $10,000 in a year is to create a budget.
Budgeting is the process of creating a plan on how much you are going to spend in a certain time period. This is essential to your journey because it stops you from overspending.
Most people don’t have a lot of savings because they just mindlessly spend their money away.
They buy unnecessary things like these items here in small amounts without realizing the expenditure compounds.
Creating a budget is the start of keeping your finances in order. You can do so in 3 easy steps.
Step 1: Determine your net income
Your net income is your take-home pay. It’s your salary minus all the deductions.
The net income is the foundation of every budgeting framework. So you need to list this down first.
Step 2: Find a budgeting method
There are a lot of budgeting methods like the 50/30/20 rule that you can try out. It will guide you on how to control your expenses and set a daily budget. It’s ok if you keep on changing your method – just find the one that’s perfect for your lifestyle.
Step 3: Track your progress
It’s important to know how you’re doing – are you spending less? Are there unnecessary purchases? Or are you on track?
This will help you determine if there are changes needed to be done. It won’t be perfect at first and there would be iterations in the process. What’s important is you strive to be better.
Having a budget and sticking to it will make you properly spend on your needs and wants. This forces you to change your spending habits.
2. Pick Up A Side Hustle
If you want to speed up your savings, finding a fun side hustle that pays well can do that for you.
In today’s day and age, there’s no shortage of opportunities for people who want to make more money.
People now can make a full-time income just by being in their homes.
It’s the ideal situation for many since working at home doesn’t require commuting to work, going through traffic, and waking up early.
Some just get out of bed at the time of their liking, boot up their laptop, and start working while eating their breakfast. The internet has truly changed the work landscape.
Now, you might be thinking what’s a good side hustle to pick up?
Freelance is one of the best ways to earn money on the side. If you’re a skilled writer, coder, or assistant, you could land a side gig with no problem. Speaking about a skilled writer, you can learn how to make money as a freelance writer.
Freelancing might require some time sacrifice from your end, but no one said saving $10,000 would be easy.
Offer a service where you can leverage a skill you’re good at.
Let’s say you’re the top closer in your firm averaging 7 digits per year. I’m sure people all over the world will pay good money to know how you constantly close clients.
So think about something you’re good at and if it can be taught to others. This one’s a very lucrative side hustle.
These are perfect side hustles in your journey to $10k because it requires little to no capital. Plus those jobs pay really well when done at a high level. It’s a good investment to learn more about this side of the internet.
3. Start Reading Personal Finance Books
I believe in the saying that the “answers are in the books”.
In your case, you should learn more about personal finance from books. Reading the same topic from different authors opens up your mind to how you can save and make more money.
Every book comes with different perspectives and methods. If you are into the Personal Finance niche, you won’t run out of good books to read. The industry has gotten so big that there are timeless resources in this niche that can help you be financially healthy.
Here are three books for you to read:
Rich Dad, Poor Dad – A classic book that can change your mindset on money. It’s one of those eye-opener books that can leave an impact on your life after reading it.
The Millionaire Next Door – The lessons from this book can change your spending habits for the better. It teaches you how to make money, what to do with the money you’ve received, to compound the money you have, and ultimately how to become a millionaire without winning the lottery.
The Total Money Makeover – This book by Dave Ramsey clearly tells you what you should do with your money. It tells you how much to save, what percentage of your income should go to your retirement fund, what debt you need to pay off first, and many more.
Reading personal finance books will teach you the best ways to save and earn money. It gives you knowledge on how you can improve your finances. You also gain perspective on what other people did to build wealth and achieve financial independence.
4. Invest In Yourself
I could not emphasize how important it is to invest in yourself.
If you’re not satisfied with where you are today, there might be a skill that you don’t know but is easy for you once you learn it.
However, don’t just focus on any skill. Learn a high-paying skill that sparks your interest. It doesn’t have to be something that you’re wildly passionate about, but when you find a lucrative side hustle that you can enjoy and matches your personality type, it can lead you to the path of financial freedom and happiness.
You need to read books, take up courses, join webinars, or watch Youtube videos. It’s by investing in yourself that you can learn a skill. But it won’t be just any skill, it’s something that you can monetize to help you earn more money.
You have to realize that the best investors, entrepreneurs, real estate moguls, coaches, and others started as a student – having zero knowledge of the craft that they are well known in today. They were once in your shoes.
Investing in yourself means you’re investing in your future.
You could also invest in advancing your knowledge in your career. Doing this usually leads to getting higher pay at work.
There are tons of certifications you can take no matter the field of work you’re in. Just recently, Indeed published the top in-demand certifications you must know of. Here are some of them:
- Sales certifications
- Marketing certifications
- Healthcare certifications
- Human resource certifications
- Business analyst certifications
- Project management certifications
Investing in yourself can open up a new set of money-making opportunities you can leverage.
5. Track Your Spending Habits
Another great way to save would be doing the fun activity below. But there’s one thing I ask from you before you start: be brutally honest with yourself.
I want you to track your spending habits every day for a week. Live your regular daily routine without thinking about the journey to saving $10k.
I want you to list down all the things you spend money on.
After the week has ended, cross out the expenditures that you can live without. Segregate the needs and wants.
And yes, Starbucks in the mornings is a want and it should be crossed out. But of course, there are always hacks on how you can get free Starbucks if you want to reduce your budget and save money.
If you want to go further, check your subscriptions as well. You might be paying for something you’re not using or reading anymore.
After this activity, you’ll be shocked at how much unnecessary spending you do – like the 10 stupid things I stopped buying to save $10,000. You’ll also be amazed at how much money you spend on these things daily!
Tracking expenses shows you your spending habits. It exposes what you prioritize over saving money.
There’s no shame in doing this activity, it’s even an eye-opener for many including me. If you really want to save that high of a figure, you need to be willing to drop certain habits that are delaying you to achieve your financial goal.
As mentioned earlier, saving up $10k is no easy task. You will encounter challenges and there are sacrifices needed to be made.
If it was so easy, everyone would be rich. But that’s not the case. Most would shy away from tracking their expenses because they don’t want to face the guilt of their overspending.
But you are different, You have a goal. And you’ll do anything to achieve it.
6. Learn How To Invest
I’ve never heard of one rich person that doesn’t invest.
Almost every single one of them has some type of investment. And it’s something I would suggest you try as well.
Just remember it isn’t a get-rich-quick scheme. You don’t get rich overnight.
You’re putting money into an instrument that you think is going to increase in value over time. Emphasis on “think” because there are no guarantees in the market.
The most common form of investing is in stocks or ETFs.
You purchase shares from a company that might grow in value in a certain time period. The average annual return of the stock market is around 10% to 15%. So if you want to earn passive income, investing in the stock market is a good choice.
You could also invest in Real Estate Investment Trusts (REITs).
If you want to diversify your portfolio, REITs are usually the recommendation of most money managers.
Having an average annual return of 8%, it’s the third largest asset class in the US market next to equities and bonds.
People would rather choose to invest than store their money in a savings account because of the return that the market can give. But it’s important to remember that the advantage of higher returns comes with a risk as well.
That’s why experts say “invest only what you can afford to lose”. NEVER put your entire savings in the market because no one knows what can happen the next day. The stock market is volatile and sensitive to news.
7. Pay Off Your Credit Card Debts
Repaying your debt won’t give you additional earnings but it’s one of the fastest ways to save money.
It’s always recommended to pay off consumer debt before focusing on saving. Why? Because interest rates on credit cards don’t benefit you at all. All it does is it makes you pay more for the item that you didn’t need in the first place.
Debt has always been a big roadblock to saving and financial freedom. I’ve been there and it wasn’t easy to overcome. But with hard work and consistency in paying monthly, I was able to get rid of my car and student loans.
If I can do it, then trust me, you can do it too.
I’ve listed some of the debt-repaying strategies I’ve used in the past. These are two popular strategies to help you get started.
- The Snowball Method – You pay the smallest debt as soon as possible. Prioritize these debts since it will help you get into momentum in repaying. These small wins can be a confidence booster for many.
- Debt Avalanche Method – You pay the largest debt first. Or the one with the highest interest. These debts are the ones taking a big chunk of your take-home pay. Prioritize finishing the hard ones and the rest will be easy.
When you have repaid every debt you have, you need to make a pact with yourself never to go down that road again.
Remember the times you wished you were out of debt the next time you’re thinking of getting a loan.
Practice delayed gratification. If you can’t afford something you want, save up for it. It will be much more satisfying when you get that goal knowing how much you’ve worked hard for it.
8. Overtime At Work
If you want to save up $10k, there’s no better way to say it than just earn more money.
One way to get more money is to go overtime at work. You should take advantage of overtime pay when the rates are reasonable. You’re already at the office, might as well spend a few more hours taking on more work or doing extra projects.
This will also demonstrate initiative, which your manager will appreciate. Hence the higher chances of a promotion and more pay from your boss in your next evaluation.
This is one of those money-earning strategies that require no capital upfront.
Just make sure you’re aware of overtime rules in your company. Find out if anyone can do overtime, how much it pays, and what are the ways to log your extra hours.
The last thing you want to happen is you worked extra hours only to find out you’re not qualified to be paid overtime.
There are a lot of companies that are looking to hire part-timers just to help them with everyday duties. It might not pay as big as your day job but it will surely help in adding more money to your account.
Jobs here are usually crew members in a restaurant, sales associates in a retail store, customer service at groceries, cashiers at warehouse stores, and many more.
Don’t limit yourself to those positions. You can simply google part-time jobs near you and you’ll find a variety of jobs you can apply for.
9. Save Most Of That Extra Money
When you get extra money from work or other sources, you immediately think it’s money for spending. Don’t listen to your old self. Put a good part of that money into your savings and spend the rest.
Some would recommend saving all of it but I have empathy and know there are things we want to buy. So to meet in the middle, save more than 50% of that extra cash and you can use the rest for any wants you’d like to purchase. It’s exactly what I did when I took on a fun side hustle like flipping furniture for extra money.
Extra money can do so many things for you. It can cover the debt payment for that month, it can pay utility bills, can be added to your investments, and other things. All of this without touching your take-home pay.
If you want to really use your extra money to good use, you can automate your account wherein it transfers a set amount of money to your savings account.
Almost every bank application already has this feature. It’s an excellent way to not be even tempted to spend it on unnecessary purchases. Most people do this automated feature for their investments and emergency funds.
Combine less spending and more earnings and savings, and that $10k is well within arms reach.
10. Try Savings Challenges
A saving challenge is only effective when you’re serious about doing it.
It’s bound to be hard hence the term “challenges”. But it’s actually a very fun activity to do especially when it’s your first time doing it.
These challenges were made for spenders to achieve a certain financial goal. It forces them to really budget their finances and stick to the projected saved money in the challenge.
Challenges like these make you mindful of what you’re spending money on. It’s best to do it with a friend or partner so you can both hold each other accountable. When it’s only you, you can cheat around the challenge.
Do you think you’re up for the activity? if you’re interested here are some of them below:
- Save $1,000 a Month Challenge – If you learn how to save $1,000 in a month’s time, then reaching $10,000 in a year will be much more feasible. This challenge will make you more mindful with the money you’re handling.
- 26-Week Savings Challenge – I created this when I first started this blog to challenge my readers to at least save $1,000 by Christmas. It’s a challenge that starts in June, but of course, you can start it anytime you like.
- No Spend Challenge – In an ideal world this is how our finances should be organized. But there’s a ton of temptation which makes it hard to do this. This challenge permits you to only purchase gas, food/meals, bills, internet, and phone. All other things are not allowed. Here’s what I learned in my no spend challenge at the beginning of my financial journey.
- 52-Week Challenge – Here, you’re going to save $1 for the first week. $2 for the next, $3 for the week after that. You get the point. By the end of this challenge, you should have saved at least $1,378.
- Weather Wednesdays Savings Challenge – Want something random? Try this one out. This challenge tells you to match the high temperature every Wednesday. So when you live in hotter areas of the country, you can expect to pay more than $100 on some days!
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