If you want to save $10000 before the year ends, it can seem impossible, even with good money habits. However, you will be surprised to see how a few simple habits can yield significant results over time.
Where to start to save $10000?
You cannot simply start to save without a savings plan and end up with $10000 at the end of the year. However, any target can be achieved with systematic and consistent efforts. Start small and end up rich. You can start by simplifying the numbers with short term goals:
Per day: $27.40
In a nutshell: Saving $27.40 a day will result in $10,000 at the end of the year. For many, this is not very difficult. You will be surprised to see how these few dollars saved every day will add up during the year. You can also try weekly or monthly savings:
Per week: $192.30
Per month: $833.33
Plan to save $10000
Just like any other savings goal, you will need to follow these two steps to make your goal a reality:
- Decrease your spending.
- Increase your earning.
With a budget, you can spread your monthly income for payments, needs, wants, and savings without any confusion. Here are some categories for your reference. You can personalize it according to your situation.
Housing debt can be less than 28% of gross monthly income. It will include:
Total monthly consumer debt can be less than 20% of net monthly income. It will include:
- Credit card debt
- Cash advances
Total monthly debt payments can be less than 36% of gross monthly income. It will include:
- Credit card payments
- Car loan payments
- Mortgage payments
- Student loan obligations
Retirement & savings can be greater than 20% of gross monthly income. It could be any of these:
- 401k accounts
- Roth IRA accounts
- IRA accounts
- Savings accounts
For most people, the most considerable expense would be the housing debt. If you find it challenging to create a budget or need the help of the pros to make the most of it, you can use apps like YNAB. Many financial experts recommend YNAB because you can save $600 within the first two months. It also comes with a 34-day free trial.
Your wants can wait
Cutting down expenses would be the hardest step. But it’s definitely worth it. Whenever you struggle to give up something you want, you can think about the gain you would get at the end of the year. Moreover, there are several promotions, coupons, and discounts readily available everywhere. You can decide to make a purchase only if you have a coupon to redeem. This way, you can add more dollars and might even reach the savings target earlier.
Don’t just save, invest
Once you have started saving, you must not simply set it aside. If you don’t invest the savings amount, its value will drop over time because of inflation. It’s advisable to automate investments. Once you deposit your paycheck, the funds for investments will get transferred first, and the rest will go for monthly bills. You can try apps like M1 Finance to get help with investing strategies.
Increase your Income
Decreasing existing expenses and increasing your income will be the best way to reach your savings goal practically. You can look for part-time jobs, work overtime, or ask for a raise. Every extra sweat will be worth it when you get the reward at the end of the year. Several part-time jobs offer hourly payment with great flexibility. You can also download apps like Truebill to cancel unwanted subscriptions and reduce your bills.
Motivate yourself to save $10000
Saving is like dieting. The process isn’t fun but painful. The only motivation is the result. But you can try to make the process fun by having rewards after reaching a weekly or monthly target. This can include treating yourself to a meal or watching a movie. The size of the prize can also depend on the amount. It’s always important to keep realistic and achievable goals. Otherwise, you will end up giving up easily.
It’s the ordinary things
It’s important to set limits for every spending category. If you want to reach your goal, the little things make a big difference. With set spending limits, you will get into a consistent discipline. Without a spending limit, you will never spot the $2 that takes your dream further away.
You can set a basic monthly living expenses limit like $1,500 per month. You can also set a daily limit of not spending more than $60 a day. However, you don’t have to stress out if you don’t reach your daily, weekly, or monthly targets. Moreover, there is joy in living a simple life, especially when you know that something big is on the way when all of this is over. Couples can make saving enjoyable by having a friendly competition with small rewards.
You know your situation better, so you can personalize a strategy to reach the target at your own pace. Be consistent.