How to Save $10,000 in a Year
Hey everyone, it’s now 2023 and I have to say things have CHANGED!!! With inflation and rising cost of living going absolutely berzerk, it’s probably more difficult than EVER to save 10K in one year. Most of us really just need the money to get by on our regular bills.
I’ve gone through and updated this post to have the most helpful information for getting on track in 2023 and looking into 2024.
Want to know how to save $10,000 in one year? I’m going to tell you exactly what I did to be able to save $10,000 in one year! I did it in 8 months, believe it or not. At 24 years old, I cut down my spending to pocket as much money as possible into my savings account.
Those photos above are actual screenshots of my Mint account!
Why Should You Save $10,000?
Well, the answer to this question is straightforward. There’s a finance rule of thumb that you need to have six months of savings put away to cover any unexpected costs.
Say you were to lose your job because the sad reality is that we are all disposable to our employers. Thanks, pandemic, for really driving that one home! Now closing out 2023 we’re going through more and more layoffs. I keep hearing that this is supposedly the worst job market since 2008.
You need to be able to cover living expenses while you get your life sorted out. Having that financial buffer will save you a TON of stress and give you great peace of mind.
Okay, so maybe you are self-employed, or you are not at risk of losing your job. Why do you need to save $10,000 so quickly? Well, life loves to throw curveballs.
It’s best to save as much as you can when you can and expect you might have to spend a lot of money later. Just keep that in mind.
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How Do You Actually Save $10,000 in One Year?
It sounds impossible, right? For a long time, I thought it would be, too. As a broke college student, I had two part-time jobs that made me barely any money. My paychecks were maybe $200 max. I worked for minimum wage and made no tips!
After graduating, I worked at a restaurant for almost a year until the pandemic happened, and I was laid off.
During that time, I was saving, but not seriously. I was living at home, so I didn’t have a rent payment which I am so grateful I had that opportunity.
Another fortunate thing that happened to me was I was employed again within two weeks of being laid off. How was this possible?
I got my degree in Cellular and Molecular Biology, which allowed me to secure a job in the biotech field. As we all know, biotech and pharmaceuticals have TAKEN OFF since the pandemic began.
I then moved out of my parents’ house and to a new city, so I needed to start taking my money-saving seriously. Let’s get into the details.
You Need to Have a Goal
Why do you want to save $10,000? There needs to be a reason behind it that you feel firmly about. Setting big goals such as this one with a year-long wait to get there makes it hard to do.
Yes, telling yourself you will save $10,000 in a year is a lot easier said than done!
Ask yourself, is there something you want that costs $10,000? It could be 6 months of financial security or a downpayment on a car or house.
For me, it was flight training. Yep, I wanted to earn my PPL (at the time of writing this post, I am 75% through my training). It’s terribly expensive. That was my main goal for saving $10,000, and I wanted it bad enough that I buckled down and saved for it.
So, what’s your goal?
You Need to Know the Breakdown
Let’s look at what saving this much money looks like!
This figure clearly shows how much money you have to set aside and at what frequencies to make this goal! Seeing the amounts broken down helps plan your budget accordingly.
You know that you have to set aside $385 to make it to your goal every time you are paid. That seems like a lot, right? When you see that it’s just $28 a day, you can know that it is possible!
Download a Budgeting App
I downloaded Mint, and it completely changed the way I see money. This app allows you to compile all your bank accounts into one area.
With this, you can see how much money you have and where. You can also see your credit card balance. Mint allows you to track your credit score as well without knocking you down a few points.
Those screenshots at the top of this post came straight from Mint. It shows you how much you’re making VS how much you spend each month!
They even have little goals you can try. I recommend this app to anyone trying to save that $10,000 in one year!
Pay Your Bills First
Let’s get one thing straight. You can’t start saving until all your expenses are covered. There is no reason to go into debt while trying to save!
Pay your rent, car payment, insurance, credit cards, loans, etc., before you pack away those savings.
I have two different budget planners available to help you manually track expenses!
Here is a very simplified example of my budget and expenses. This is on a bi-weekly basis.
Notice I don’t have a car payment, which I’m so grateful for. If I did have one, then flight training might be out the window for me. I allow myself to go to one lesson a week, and that keeps me on budget.
After my 401K contribution, I still have $520 leftover, give or take, but sometimes it ends up less with my spending.
There is still ample room to put $385 into my $10,000 savings account.
For groceries, I live with my partner, so the bill is more expensive sometimes. However, we split them, so I usually don’t have to pay more than $200 a month!
DISCLAIMER: I know I am so lucky to be making what I make and paying what I do in rent. We got into our apartment before the pandemic, and rents went crazy! I know I am SO lucky not to have any student loans, and I sincerely thank my incredible parents for that.
Cut Down on Smaller Expenses
Once you have figured out your budget, you will be able to see where you are overspending. These can be on things like subscriptions you don’t use. I’m NOT talking about cutting out the occasional cup of coffee or avocado toast. We can all agree that enjoying something and treating ourselves should NOT result in financial distress.
Think about things like cutting down on how many meals you eat out vs. cook at home.
How many people have a Hulu, Netflix, HBO Max, Disney + account, etc.? Which of these services are you willing to give up? Look at which streaming apps you use more and get rid of the ones you don’t.
LUNCH SPENDING EXAMPLE
Let’s look at the table above. If you go out to lunch and spend $10, how much would that add up to? These values are on a weekly basis, so we can determine what the monthly expense is.
We’re looking at up to $200 a month just on lunch if you were to go out five times a week! It’s probably costing more like $15-20 a meal eating out now anyway.
I took my lunch to work every single day except for a few occasions! The only time I spent money on lunch was when we decided to go out as coworkers.
Check All Your Credit Card and Bank Statements
People who are financially motivated are CONSTANTLY checking their transaction history. What if you are being charged for something you aren’t using?
What if a scammer got your credit card number, and you never noticed?
You need to be on top of all your transactions and make sure they make sense. Again, Mint will show you your spending across all accounts, so there is no excuse to miss something.
Break down your spending by category and see where you are spending the most. After my most recent personal audit, I noticed my partner and I had spent $800 on restaurants in one month and I was blown away.
Open an Online Bank Account
I can genuinely say this is the tactic that led me to success.
An online bank account means that there are no ATMs or brick-and-mortar stores to do your banking.
If that’s the case, why the heck would you want one? Well, it’s an easy way to keep your money safe from your own spending!
I opened an Ally bank account soon after I graduated college. Since then, I have been putting my serious savings money away each month.
It takes 2-3 business days to transfer the money in and out of this account. That means, if you want to make an impulse purchase, you’re going to have to wait. That waiting period will often change your mind on how badly you need that item.
Another benefit of an online savings account is the interest rates are much higher. So, you are rewarded more in interest for keeping your money there than you are in a traditional bank! Heck yeah, I want to make money by having money!
Stay on Top of Credit Card Rewards
Most good credit cards reward you for using them. Be sure you are constantly checking for new offers on your credit cards. You might be missing out on cash-back opportunities you didn’t know existed!
Because of credit card rewards, I’ve stopped using my debit card entirely. It’s safer, anyway.
Just be sure to pay your bill every month to avoid interest payments!
Plan Your Essential Spending
When you go out to buy groceries, make a plan. Be sure you know what you should be getting, and don’t go shopping HUNGRY!
We are all victims of the grocery store when we go in super hungry. Every single snack looks like a delicacy!
Plan out your meals for the week to help decide what you need to buy and what you don’t.
If you know you have an old car and will probably need to purchase one in the next year or so, plan for that.
Don’t wait until you end up in a bad situation and have to drop tons of money on a car you can’t afford. You can contribute as little as $10 a week to whatever emergency fund you need. As long as you have the money, you will be way less stressed in the long run!
Start a Side Hustle
I think this is more important than ever in the economy we’re living in. With inflation as rampant as it is, no one is receiving a yearly cost of living raise to match it. I HATE that this is a solution, but if you can make a side hustle work to boost your income, then you should.
If you have some time after work, you can start a side hustle! This can be as simple as taking surveys online to creating your printables to sell on Etsy or more.
Take up a part-time job in your free time. I sell kettle corn with my friend on the weekends for a little extra income. That income goes towards the fun things I want to do, so I can put my paycheck from my full-time job into savings. Even if you think you don’t need multiple incomes, you might one day.
Remember what I said about being disposable to your employer? Don’t wait until you lose your job to look for another way to provide income!
Another incredible side hustle you can try is selling online courses. The online course business is BOOMING and is expected to keep growing. The online course business is expected to grow by over $300 BILLION by 2025!
If you have some knowledge in an area, nothing stops you from being a part of that sales statistic.
Take on a Part-Time Job
Not everyone has the time to do this. If you have a flexible work schedule, then consider taking on a part-time job. If your full-time job covers all of your living expenses, you can put your part-time paychecks straight into savings.
Before the pandemic, I had a part-time job teaching an after-school program for kids. Since the program was after school, I had time in my schedule to make it work!
All of those paychecks went straight into my $10,000 savings, which was a big part of how I was able to accomplish that goal in a short amount of time.
There are many bars and restaurants that have part-time workers on the closing shift. Just be careful of this option because you don’t want to end up burned out.
A part-time job can be an easy “short-term” solution for someone who needs to save $10,000 fast.
To Wrap Up
Now we know what it takes to save $10,000 in a year,
Is it easy? No. Is it possible? Most definitely. You don’t have to make six figures to be able to save a substantial amount of money.
The earlier you start saving, the better off you will be in the long run!
Remember, it’s never too late to start. No matter how old or what stage of life you’re in, you can start saving money for your future.