How to save 10000 a year — To save $10,000 per year, you only need to save $833.33 monthly or $384.62 bi-weekly. Find out how to save 10k by the end of the year. This article may contain affiliate links.
It’s no secret that becoming financially independent requires that you save a lot of money.
But saving money can be challenging if you earn a lower income or if you have a lot of expenses.
Regardless of your situation, though, you have to find a way to save a lot of money if you want to reach financial independence and live on your own terms.
Just accept it.
Then figure out how much you need to save to become financially independent. After you determine your number, figure out how much you need to save per year to reach your goal.
In this article, I will show you how to save 10000 a year because it’s a good example number to start with.
Let’s dive in.
How To Save 10000 A Year
How To Save 10000 A Year
This year, I am currently on pace to save over $10,000.
This is after I estimated that I would only save $3,000. As a part-time worker, my income fluctuates, so it is difficult to predict how much I will be able to save. As such, I base my savings goals on how much was saved during the prior year.
Obviously, saving nearly $10,000 this year is a welcome achievement.
I was able to accomplish this because my income increased and since I eliminated my student loan debt.
Considering that I have saved more than 3 times what I originally anticipated saving this year, I wanted to share some of the other key things that have helped me learn how to save 10000 a year.
Just Start Saving
The key is just to start saving.
Even if you don’t save a lot, saving a small amount is still better than not saving at all. It adds up.
Plus, it builds the right habits. If you can’t manage a little bit of money, you will never be able to manage a lot of money. This is why building wealth slowly and gradually is an ideal way to do it.
Once you realize you can save a small sum of money, and you see that it actually adds up, you will be motivated to increase your savings rate.
For example, I always still try to save at least 10% of my income. When my hours at work are low, I will even save 1% of my net income just to make sure I save something. I always need to be moving ahead. Even if it’s at a slower pace.
So, just start saving, even if you can’t afford to save much. You will learn how to save and will be able to save 10000 per year before you know it.
Break It Down — $10000 Is $833.33 A Month
Although it may seem overwhelming to save 10000 in a year, it’s a lot more possible than you think when you break it down.
For example, to save 10000 in a year, you only need to save $833.33 per month.
If you break it down into bi-weekly payments, you only need to save $384.62 twenty-six times in a year to hit 10k.
Depending on what your goal is, break it down into smaller steps to make it seem more achievable.
Pay Yourself First
You don’t just hope to eventually have money. It doesn’t work like that.
You have to consistently and habitually save money for decades to build wealth.
A good way to do this is to pay yourself first.
Basically, when you get paid, you automatically pay yourself first a percentage of your income. You prioritize it as your first bill on the list.
To save 10000 in a year, you could break it down like in the previous step, and then pay yourself first the exact amount.
Related article: Pay Yourself First — How To Pay Yourself First
Lower Your Monthly Expenses
If you can’t afford to save the amount you need to save, you either don’t make enough money or you have too high of expenses.
Frankly, you need to lower your expenses or increase your income.
Depending on your skillset and employability, being more frugal may be the fastest way to save more money.
By lowering your expenses, you can save and invest more money.
Increase Your Income
If you already have low expenses, your only option is to increase your income.
To increase your income, you could search for a higher paying job, start a business or side hustle, or start investing in income generating assets.
Simply put, the higher your income is, the more money you will be able to save.
In turn, you will be able to save 10k a lot faster than one year.
Save Money From Tax Returns
Plenty of people blow their tax returns frivolously.
I mean, it’s nice to use some of your tax return for a memorable trip.
But if you invest your annual tax return, you can supercharge your savings.
Depending on your financial situation, a tax return can provide a major savings boost each year.
Save Extra Money From Bonuses And Overtime
If you are lucky enough to receive bonuses or overtime money from your employer, save it to get ahead.
In most cases, it was probably money you didn’t really need anyways.
So, pretend you never saw it and lock it away in an investment account to save more money.
Track Your Progress And Savings Rate
When you are on the journey to financial independence, you absolutely have to celebrate the small milestones.
It’s important because it helps you appreciate the journey.
In order to celebrate the milestones, you need to track your progress.
Of course, some people may prefer to track different metrics. But I prefer to track my savings rate, monthly dividend income, and blog income.
Tracking your progress will help you stay motivated over the long term.
Budget Monthly To Stay On Track
In addition to tracking your progress, you will need to budget monthly.
This way, you can keep track of where your money is going and be in control of how much money you save.
You don’t want to be leaving yourself short because you saved too much, or you don’t want to waste money that you could be saving.
Related post: How To Budget: 7 Simple Steps To Build A Successful Budget
How To Save 10000 A Year — Final Thoughts
In summary, saving 10000 per year is much more achievable than it seems, if you break it down.
For instance, to save 10000 in a year, you only need to save $833.33 per month.
If you break it down into bi-weekly payments, you only need to save $384.62 twenty-six times in a year to hit 10k.
If you pay yourself first and stick to a budget, you can put yourself in position to save 10k per year. To get there, you might need to save tax returns, bonuses, and work overtime along the way.
As long as you keep consistently saving and are frugal, you’ll be saving 10 per year in no time.
How much do you save per year? Do you track your annual savings rate or amount?
It would be awesome to hear your thoughts in the comments below.
Related Articles On Saving Money
How To Budget: 7 Simple Steps To Build A Successful Budget
Pay Yourself First — How To Pay Yourself First
Investing With 10000: How To Invest 10k Into Stocks
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