How To Save $10,000 In A Year Or Less

Whether it takes you 12 weeks or 12 months, you can reach your savings goals simply by sticking to a plan. If your goal is to save $10,000 in one year, here are some tips and tricks to steadily grow your bank account.

Check Out: 3 Genius Things All Wealthy People Do With Their Money

Quick Take: Breaking Down Your Savings Goals

When it comes to your financial goals, breaking down the amount of money you need to save is a great way to stay motivated to achieve them. Having a precise number in mind, whether it’s daily, weekly or monthly can help. Here’s a quick breakdown:

• If you want to save $10,000 in a year, you’ll need to save $833.33 a month.
• A weekly budget would work out to saving $384.61 every two weeks, or $192.31 per week. 
• This also boils down to saving $27.40 a day to reach your $10,000 savings goal.

How To Save $10,000 in a Year

Whether it’s by examining and breaking down some of your biggest expenses or simply taking on some extra income, saving $10,000 in a year could be more doable than you think. Here are nine steps to take to start saving:

1. Review your finances
2. Build a budget
3. Cut back spending on nonessentials
4. Save money on essential expenses
5. Earn more income
6. Save your windfalls
7. Don’t pay interest on your credit cards
8. Automate your savings
9. Save in a high-yield account

1. Review Your Finances

To know where you can save money, you first have to know where your money is going. Using a spreadsheet or budgeting app, list all of your household income. Include salaries from W-2 jobs and any money you earn from side gigs, investments, pensions or government benefits. You can try the following to get a jumpstart: 

• Go through your last few months’ worth of bank and credit card statements and receipts.
• List all of your monthly spending, including rent or mortgage payments, bill payments and debit purchases.
• Log your cash spending — small purchases you make without much thought add up.
• Subtract your monthly expenditures from your monthly income. If you’ve got at least $833.33 left over, you’re all set — just transfer that amount into a savings account each month and you’ll have $10,000 within a year. 

2. Build a Budget

A budget will keep you accountable for your spending. The first step is to divide your expenses into two main categories:

• Essential: Mandatory spending is any expense that’s necessary for your health, safety and financial well-being. Groceries, housing, child care, elder care, transportation, utility bills (including wireless and internet), insurance, medical care and professional dues and licensing fees all count as mandatory. Loan payments and minimum payments on your credit cards are also mandatory expenses, as are basic clothing purchases.
• Nonessential: Nonessential expenses are things you enjoy but could live without if you had to. Cable, streaming subscriptions, gym memberships, meal deliveries, dining out, delivery subscriptions and miscellaneous optional purchases all fall into this category.

You’ll note that some of your essential expenses are fixed and some are variable. Payments for fixed expenses like rent, insurance and loans are the same every month — or every quarter or year, depending on how they’re billed. Calculate how much you need to put toward these each month.

Variable expenses like groceries, utility bills and credit card bills change from month to month. Average them out across 12 payments.

Add up your fixed and variable monthly expenses and subtract the total from your income. That’s how much you have left after your essential expenses. Subtract your $833.33 savings goal from that amount to see how much you have left for nonessential spending.

3. Cut Back Spending on Nonessentials

Nonessentials are the easiest expenses to cut back on, so they make the next step toward giving your savings a major lift.

Cancel or Rotate Subscriptions

Look carefully at subscriptions to see which ones you can eliminate. Don’t let the fact that they’re low-priced fool you — eliminating a few subscriptions at just $5 each per month can add up pretty quickly. If you don’t want to give them up entirely, rotate between your favorites, pausing those that you don’t need right now.

Cancel or Downgrade Your Gym Membership

Unless you’re a hardcore bodybuilder, bodyweight workouts can be a good, no-cost alternative to weight training at a gym. In addition, you can trade on-site fitness classes for free or low-cost online versions — or participate in a sport or other activity to maintain your fitness level.

Save on Entertainment

Instead of going out for full-priced dinners, opt for happy hours and restaurants with weekly specials, or go to lunch instead. Better yet, invite your friends to take turns hosting dinner parties, potluck dinners, wine tastings, game nights — whatever works for the type of entertainment you enjoy.

If you typically spend money on live performances, check for Groupon discounts before you buy tickets. Also check local venues that might offer quality shows for less than the major venues charge.

Save on Gifts

Take advantage of savings offered by shopping apps like Rakuten, Ibotta and Capital One Shopping. You can even choose fewer or less expensive gifts and make it the thought that counts.

4. Save Money on Essential Expenses

Essentials are the goods and services you can’t live without, but that doesn’t mean you can’t get some of them for less.

Pay Less for Groceries

If you’re still buying name brands, particularly for things like paper products, consider switching to generics. And look at how much food you’re throwing out because it goes bad before you can eat it. Planning meals in advance, and shopping based on that plan, can help you avoid overbuying and waste.

If your weekly grocery shopping includes a trip to the warehouse club, make sure you’re taking advantage of it in the right way. When you compare prices between the club and your regular grocery store, don’t forget to factor in the annual membership fee. If you only go to the warehouse club every couple of months, that $60 annual fee could be adding an extra $10 to your bill each time you go. Make sure it’s still worthwhile.

Cut Your Cable, Internet and Wireless Bills

Cable, internet and wireless providers are sometimes willing to discount services, but you’ll have to get on the phone with a representative to ask for a break. If they’re unwilling to reduce your monthly fees, consider scaling back your data or transfer speeds or switching to a different provider to reduce your costs.

If you’re still paying for cable, switching to antenna TV and streaming over the internet service you’re already paying for could free up $100 a month, according to CNET.

Spends Less on Gas

Gas is taking a bite out of everyone’s budget these days, so be sure to shop around for the best price. Using a gas app can help you find the best deal wherever you are, even if it’s near home. Your regular gas station may not have the lowest price every day, so it helps to compare. And try to consolidate trips so you’re driving less and using less gas.

Reduce Your Insurance Premiums

It’s good to review your homeowners/renters and auto insurance policies periodically to make sure you have enough protection, first of all. Secondly, make sure you don’t have more than you need. Eliminating collision and comprehensive coverage on an older car or increasing your deductibles as your savings grow could save you money on your premiums. Shopping around for less expensive coverage or bundling policies with the same company to earn a discount also helps.

5. Earn More Income

You have three options for increasing your income: ask your employer for a raise, get a new, higher-paying job or take on a side gig. The other option is to take a second job or add on a freelance gig. Walking dogs, delivering groceries and ride-sharing can all bring in $16 to $20 an hour if you’re in an area with high demand, according to ZipRecruiter.

A note of caution about a side hustle: Set aside some of your additional income for taxes. If you earn extra money all year long, you may need to pay estimated taxes every quarter so that you aren’t penalized at tax time.

6. Save Your Windfalls

When you get a windfall like a tax refund, year-end bonus or raise, it’s tempting to splurge on something you’ve been wanting. But if you use that money to pay off high-interest debt or put it into savings right away, it can make a big dent in your $10,000 goal.

7. Don’t Pay Interest on Your Credit Cards

According to the Consumer Financial Protection Bureau, consumers who carry credit card debt paid 94% of total interest and fees charged to U.S. cardholders, but they earned just 27% of the rewards from major credit card companies.

If you carry a balance on your credit cards — even if you’re racking up points and cash back — you’re paying extra every month for that tank of gas you’ve already used and that dinner you’ve long forgotten. Pay off your credit cards, and then stop using them.

If you have credit cards that charge an annual fee, consider getting rid of them. There are so many fee-free cards that have rewards and other bells and whistles, there’s really no good reason to pay an annual fee if you’re not getting the value back in rewards you actually use.

8. Automate Your Savings

This will help you stay on track with your savings goals. Have part of your paycheck direct deposited into a savings account. If you have a side hustle, have that money go directly toward savings, too, making sure you account for taxes.

9. Save in a High-Yield Account

The average savings account balance earns just 0.45% interest as of July 2024. However, some high-yield savings accounts pay over 10 times that much, and high-yield CDs can pay even more, especially on CDs with terms of 12 months or less.

How much difference does this make? At 4.60% interest compounded daily, a $10,000 savings balance would grow to $10,470.71 after a year — that’s $470.71 in free money, with no risk to your initial deposit. At 0.46% interest, the same $10,000 balance would grow by just $46.11.

Final Take To GO: Avoid Common Mistakes While Saving

If you take all of these steps and you realize the projected savings indicated, you’ll have saved $10,000 by the end of the year. Now you can put that money toward a special long-term goal or keep it in the bank as a financial cushion.

When it comes to saving money, there are pitfalls or over-extremes you can avoid to help you reach your goals but so you can also live your life. Here are some examples:

• Make sure to stay flexible and adjust your budget along with your savings goals when life changes such as pay raises or rent increases happen.
• Don’t be too extreme when cutting expenses. Being frugal is one thing, but reducing your quality of life is another, make sure to strike the right balance.
• Avoid impulse purchases. Only get things on your shopping list and don’t give in to buying things off the cuff. 
• Stick to your plan when you set your financial goals. A plan in place takes out some of the guesswork and a stitch in time saves, well, money. 

Caitlyn Moorhead contributed to the reporting for this article.