How to Save $5,000 in a Year

Marci Thomas

April 28th, 2015 | Posted in Money Tips
save-5k-this-year

Working on putting away and Emergency Fund? Want a nice down payment on a new car, or house? Here are some simple, do-able ways to put some money away without it feeling like a huge blow.

One of the biggest obstacles to saving is commitment. Once you set up a plan, stick to it! If you want to save money, even if you feel strapped for cash, there’s a way to make it happen if you just commit.

1) Put a little away each month – and put it into your budget.
Most banks allow you set up automatic transfers from checking to savings. The simple math would be to put away $100 each week – or you can put away $415 per month, going straight to savings on the day you get paid. If you don’t see the money, you won’t miss it.
This can seem like a big chunk of money, so try some of these tips to make sure you have the money to do it.

2) Cut out extra expenses (see blog post HERE).

3) Earn more money
You can do this by negotiating a raise, or getting a side job. You’ve already been living on the money you were making before, so put this extra money straight into savings.

4) Have an emergency plan
Find someone to help you when you’re tempted to spend money on something you don’t need. How would you feel after you spent that large amount of money? If you have trouble sticking to a budget, why do you think you haven’t been successful at it? What things will tempt you to stray from your savings plan? Ask yourself these questions in advance, so you have the impulse to stray from your savings commitment.

5) Get a rewards card
There are some great cash-back rewards cards out there, but this is ONLY a good option if 1) you are able to pay off the entire bill each month, and 2) you use it ONLY for pre-planned expenses. The rewards you earn likely won’t add up to $5,000 in one year, but every little bit counts.

6) Once you pay off an account – whether it be a car loan or credit card debt – instead of counting it as more income, put it directly into your savings account.

7) Don’t blow your tax return
We all think about fancy vacations or vehicle upgrades when tax refund season comes around – but a better idea is to put that money away. It’ll earn interest in a savings account so you’ll have more to spend on a vacation later.