The reason I got into finance writing is because I am passionate about helping people save money and reach their financial goals. On this site, I am passionate about empowering moms with the know-how to stay home with their children, while making money on the side. However, it will not matter how much money you make if you do not save and spend wisely.
Here are my top tricks to save $10,000 a year. Some tips will be easy, and others will exercise your savings muscle. However, by the end of the year, it will be worth it.
Make Savings Automatic
Savings is usually the last thing on people’s minds when they are trying to pay for all of the other bills each month. Most follow the philosophy that they will save whatever is left over each month. However, that strategy will only keep your savings account bare. Two apps that help you save effortlessly are Digit and Acorns.
Digit uses smart algorithms to check your spending habits. Every few days, the app will automatically take out an amount between $5 and $50. You don’t have to worry about overdraft fees with this app, because the app does offer no-overdraft guarantee. Digit will cover any fees up to two times per customer. Digit holds the money in your Digit account, which is FDIC secured up to $250,000. You can also earn a savings bonus every three months. Every $100 earns $0.05 if the funds are kept in the Digit account for over three months.
Acorns allows you to choose how much you save automatically with daily, weekly, and monthly investments. Acorns will also round-up purchases, which is very similar to Bank of America’s Keep the Change program. The money is then invested through Acorns portfolio, which is composed of six Exchange Traded Funds (ETFs). Acorns charges a $1 fee for balances under $5,000 and a .25% fee for balances over $5,000.
Whichever app you chose, set up daily deposits. Most people can afford to save $4 a day. For some, this might be hard, but for many of us, it means saying “no” to eating out or unplanned shopping trips. If you save $4 every day, you will have saved $1,460 by the end of the year!
Save $10,000 a Year with Big Budget Cuts
I know cutting things from your budget is not your idea of fun, but it is extremely useful, especially if you have a savings goal in mind. Here are a few things I have cut out when I was on a tight budget, and even still keep out of my spending.
We rely on Hulu and Amazon Prime, and our savings is about $65 a month. $780 a year saved.
I rarely go clothes shopping for my family because we receive so much from generous family members, and we also benefit from hand-me-downs. Also, I try to live minimally, so this means I usually wear the same 10 outfits over and over again. I estimate I save $50 a month. So $600 a year.
This isn’t for everyone, but I am forgoing preschool because I don’t feel like it is a need for our family. Knowledge-wise and social-wise, she is ready for kindergarten, so I will just continue teaching her, playing with her, and allowing her to socialize with peers, children older than her, and adults. $6,000 a year saved.
I do believe that activities are a great thing for children and develop essential skills, but I also know that too many activities can weigh down a family. I allow my daughter to do one activity at once, which right now is piano. Since I cut out dance for this year, we have saved $576. When she is in school, she will have more opportunities to do more.
This is a hard one to cut from your budget, but if it can save you money fast. Depending on how much you spend regularly on fast food, you can cut a quick $200-300 a month. Even if you just limit your spending, you can save $100 a month, or $1,200 a year.
Here are a few others ways I have saved drastically in the past and now:
- Clearance Meat: About 95% of the meat we eat was purchased on clearance, and a lot of it was organic. The meat is always close to the sell-by-date, so I just throw it in the freezer as is, or I make it into a freezer meal.
- Smart Devices: My husband loves smart gadgets, like the Nest and the Rachio. Both devices cost a little bit upfront, but I have already seen huge savings. Check out my article on Wise Bread to see how much they have saved me: 3 Great Home Gadgets That Can Save You Real Money.
- Used Toys: I buy the girls’ toys from yard sales, and then resell for the same price or more when they outgrow them.
Your family will have other unique areas that you can budget wisely in. The above suggestions are just what fits comfortably for my family’s lifestyle.
Rethink Birthdays and Holidays
Birthdays and holidays seem to sneak up on you. They are expensive and usually not planned for. Forgo Pinterest-worthy parties for your kids, since they are just more work for you. Instead, keep things simple for kids. My kids are still young, so I try to limit their gifts since their family members do such a nice job of showering them with gifts. If you can save $100 per family member’s birthday and for Christmas, then a family of four can save $500 by the end of the year.
You don’t have to do every birthday or holiday this way, but it can be healthy to do this every few years for an extra savings boost. Of course, this doesn’t mean you have to have a boring birthday for your spouse or children. It just means you have to be intentional and creative. Most kids want one-on-one special time with their parents doing fun things, such as camping in the backyard or having a DIY spa day, than a costly party.
Use a Smarter Budgeting System
The best budgeting system is one that you and your family will stick to. Zero-based budgeting is the method commonly used with envelopes. The purpose is to give every dollar a job in your account. Two apps that can help implement this style of budgeting is Coin Keeper and Mvelopes.
Budgeting is not just for the poor. Don’t trip over the idea that budgeting is strict and hard to stick with. It is simply knowing and planning where all of your money goes. Can’t spend less than $600 a month of groceries? Don’t sweat; just budget for it.
Breaking Down the Savings Goal
The goal to save $10,000 a year is a big, overwhelming goal, which is why you need to break it down to the smallest bite-sized step possible. For example,
Saving $10,000 a year breaks down to…
- Just under $834 a month
- About $193 a week
- Almost $28 a day
For some individuals, it will be easy to find areas to cut money from. It won’t be easy to cut back, but certainly doable. For example, to cut $834 a month from your monthly spending, it might look like this:
Save $200 on groceries, $200 on eating out, $100 on entertainment or activities, $100 on excess spending, $50 on clothes shopping, $50 on cable, $50 on gas, $25 on utilities, $25 on internet/phone plan, $25 on gift spending, and $10 with round-up change app.
For other families with tight budgets, you will not be able to find $834 worth of things to cut. However, you might be able to cut back and save $150 a month. At the end of the year, you will have $1,800 saved. Of course, that is not close to $10,000, but it is a lot better than $0.
In the end, whatever your budget and income, it is possible to save money. Many times, saving money is more valuable to you than earning more money. If you work two hours to earn $18, then turn around and spend $20 on McDonald’s for your family for one dinner, you would have been better off using your two hours making food from scratch.
Readers, I would love to hear from you. What is your saving goal for the year?