In 2019, 69% of respondents polled said they have less than $1,000 in a savings account compared with 58% in 2018. [1] No doubt, this has grown even worse in recent years with the pressures of inflation and the increasing cost of living. So what is the best ways to save a meaningful amount of money in as short a time as possible?
What are 5 tricks to saving money?
- Write down how much money you want to save.
- Choose the time frame for saving it.
- Calculate how much you need to save in regular increments to meet your deadline.
- Find ways to cut spending and/or increase earnings.
- Make the amount an automatic deposit into your savings account.
The first steps in saving $10,000 is to write it down and set it as a goal within your chosen time frame. You are 42% more likely to achieve your goals just by writing them down based on research studies. [2] When you write down goals you tell both your conscious mind and your subconscious mind what target to push for. This can help when it’s time to make a decision based on what takes you closer to your goals.
There are two ways to speed up your savings rate, you either spend less and save the difference or earn more and save the difference. You can double your efforts by doing both at the same time.
Savings is easiest if after you get your plan in place you make the deposit amount automatic from your checking account into your savings account over a set period of time. This bypasses your need for decision making, your job is just to make sure the money in there in the account at the right time. The more you automate the process the easier it will be.
How fast can I save $10,000?
If you want to save $10,000 as an example then calculate how much you would need to save to meet that total in different time periods and see which one you could accomplish.
How much do I need to save a month to get $10,000 in a year?
You will need to save $833.33 each month if you want to save $10,000 in a year. That could also be broken down further to saving $384.61 every two weeks (biweekly), or $192.31 every week. Or if we zoom in to a daily habit it’s $27.40 per day.
If you have set the $10,000 in one year savings goal and have a spouse or partner, that can help a great deal if they share your goal. You can divide the amount to save by two. So, you would each need to save $416.67 each per month individually.
How can I save $10,000 in 2 years?
To give yourself more time with less sacrifice you can also save up $10,000 in 2 years by setting aside $416.67 per month during those two years or in the bigger picture, $5000 a year.
How can I save $10,000 in 6 months?
Breaking down $10,000 in savings in just 6 months means you would need to save $1,666.67 per month or approximately $417 per week.
How can I save $10,000 in 3 months?
If you want to save $10,000 in just three months, you would need to save a minimum of $3,333.33 per month.
How to save money fast
Control your spending habits
You can either start a budget or simply spend money on the bare necessities until your savings goal is reached. A budget is where you spend your money on paper before the month even begins. A budget lets you spend your money before you are tempted to make bad decisions in real time due to temptations, lack of impulse control, or laziness. A budget will have your savings goal at the top of the list and then you spend your remaining money on your bills. Few people have the self-control to spend money only on what they need so most need a planned and written guide.
Increase your earnings
If you take on a side hustle or part-time job you will be able to save all the money you earn directly into your savings account. This is the fast track to saving the money you need. You can compound this effort with decreased spending and double your speed of results in reaching your savings goals. Another way to increase your earnings is with your current job by working extra shifts if you can, overtime if it’s available, or even better getting a promotion with higher pay.
Cancel unneeded subscriptions
An easy way to help with your savings rate is to go through your current subscriptions and cancel the things you don’t use at all or simply don’t use enough to justify the cost. Most people will find things they forgot to cancel and create some reoccurring savings.
Focus on groceries not restaurants
A lot of money can be saved by simply bringing your lunch to work instead of eating out and eating meals at home instead of at restaurants or using food delivery services. A ton of money can be saved if you don’t eat at restaurants, even fast food has become expensive today due to food and labor inflation.
Declutter
You could sell things that are cluttering up your home that you don’t use any longer to raise cash. Some examples are exercise equipment, collectables, or tools.
Get rid of payments
You can speed up the savings process by either staying out of car payments if your car is paid off or selling your car to get rid of the car payment and driving an older used car with either a lower payment or that is paid off.
The psychology of saving money
To save money your goal for the savings must be motivating enough to overcome your desire to spend money. People will have different reasons for saving money, some want a lavish vacation, others want to pay cash for a car, you may just want financial peace, and some people want eventual financial independence. Whatever your reason for saving money keep that purpose at the top of your mind when it’s time to make financial decisions to help you make the right choice.
Personal finance is more about the behaviors of self-control and consistency than about the math.
Image created by Holly Burns