You might be wondering how long it would take to save 10k...
Whether you are looking for a down payment on a house, savings for a wedding, or simply want a safe amount in the bank. This guide can help you. Whether you want to save $10k or £10k the steps in this guide will give you steps on how to do either.
It doesn’t matter what your starting point is. If you are living from pay check to pay check, or know you could budget better- we have got you covered!
The math on saving 10k
Before we get into the steps it’s important to know what saving 10k in a year (or less) means as a broken down goal.
Knowing this will help you keep on track and get specific in how you can make saving 10k work for you.
As you can see front the image above you can break down saving 10k in many different ways.
Use the information to match your pay frequency and set up automatic payments to your savings account.
Now let’s look at how we can make these numbers achievable in your everyday life.
10 Ways to save 10k
There are many different ways to save 10k, use the steps below to help you on your journey.
Review your current situation with a simple budget template
Before you start to work towards any goal you need to review what your starting point is. A good method for this is a simple budget plan.
My favorite budget template is the 50/30/20 budget. The reason for this is it separates your spending into 3 categories which makes it easy to keep track. The 3 categories are really simple Needs, wants and savings. Note there is a category so you can still enjoy life!
Here’s what you will be able to establish by using a budget plan:
Want to find out more? Read how to set up 50/30/20 budget plan.
Need to know some budgeting tips? Check out these 15 Budgeting Tips
Review your food and grocery shopping spend
Almost half of households in Britain believe they are spending more on their food shop
Almost half of households in Britain believe they are spending more on their food shop since the start of the lockdown, new research has revealed.
For many households grocery shopping is the biggest expenditure after your rent or mortgage. So cutting just 10% -15% of this could contribute to the first £1,000 of your budget.
Yes you heard me right, there is a lot to be saved here depending on how much you spend per month on groceries.
If you are currently spending more than £200 or $200 per month then I would recommend following some of the tips outlined in this guide on Food shopping on a budget.
Good to know: You can still eat well and healthy on a budget you just need to know the tricks to do it.
Put your savings on autopilot: Pay yourself first
Part of building good savings is developing good habits, which can be challenging. This is mainly because you have to make a conscious decisions and this takes work!
The good news is that you can hack this process by setting up automatic savings meaning you don't have to think about saving, it is done automatically for you!
Once you have set up your budget you will know how much you can afford to save each month or week (depending how often you are paid).
The first thing you need to do then is adopt a habit called “pay yourself first”
This means as soon as you get paid have a direct debit or standing order to transfer a set amount in to a savings account.
It could look something like this:
Advantages of adopting pay yourself first
Save on autopilot with spare change round up
Another cool method courtesy of 21st century technology is a break through known as spare change round up.
I love spare change round up because its like the cherry on top of your existing savings plan, think of it as a way to level up your savings game.
How does spare change round up work?
Spare change round up works by rounding up any spend you make on your card to the nearest £ or $ and puts this spare change in to a separate savings account.
It means that every time you spend you save at the same time, making saving a part of your daily habit - Pretty cool!
Setting up spare change round up
There are 2 ways to do this depending on where you live.
Spare change round up UK
There are a few banks that offer a spare change round up service as part of your current account these include Monzo, Lloyds bank and my personal favorite Starling.
With Starling you can set up spare change round up on steroids basically, as standard to have the option to normally or you can get to your target quicker by multiplying the amount you save by x2, x5 or x10!
Watch the MeMoreMoney video below to see how it works in action:
To join Starling is free to do so
Want to find out more? Check out our full Starling Bank Review to see if its right for you.
Spare change round up USA & UK method
The first option I gave you involved having to set up a new bank account and whilst this option provides lots of other benefits (find out in the Starling review) you might want another free option that you can just tag on to your existing bank.
Cleo is a application that integrates securely in to your bank. It uses artificial intelligence to help you budget and will automatically put money to one side for you based on what it predicts you can save.
It aims to make finance fun, think of it as the Alexa or Siri of finance. You can actually ask it questions like “can I afford to buy this” and it will help you make buying decisions based on what it knows about your spending habits and overall budget.
Curious? Find out more about Cleo here.
Cut unnecessary spending
If you have completed an audit of your finances using the budget template in step 1 you should have a really good idea what you are spending your money on each month.
Now I’m not going to preach to you about cancelling everything or not having a coffee on your way to work, life is there to enjoy and you still can!
But what i would like you to consider is are you spending your hard earned money on things that bring you genuine pleasure? In other words do you get value out of the things you are buying?
- Does this item or service bring me value
- What would happen if I didn't purchase it
- Are there alternatives that are lower cost that i could explore?
By using a budget process such as 50/30/20 you will learn you can still enjoy life with a budget but it is all about prioritising what you spend your “fun” money on. It is all about moderation, it doesn't have to be all or nothing.
So in this step review all of your purchases that aren't essential and decide if there are any savings that could be made.
Track your progress
To keep on track you need to keep engaged with your goals and celebrate a long the way. Reaching 10k is a great achievement but it is a longer term goal.
Think of it like a diet where you have a long term goal to loose x amount. When you set that goal you don’t just review it every quarter you tend to have a weekly weigh in to keep yourself motivated.
The same can be said for savings goal you need to have a monthly celebration to show how far you have come.
Change subscription companies
We’ve already talked about how food shopping can be a major burn of your monthly expenses well so can monthly utility or subscriptions.
If you are out of contract with any of your fixed bills these could include:
- Any TV packages
- Gas and electricity
- Internet package
- Gym memberships
- Any other subscription services you apply for.
With the exception of services like Netflix where the prices are pretty fixed elsewhere there is money to be saved just by threatening to leave.
Shop around by doing a quick market comparison and then ring your existing provider and tell them you are cancelling you would surprised at what savings you can get just by signing a new deal.
The savings you make then add in to your savings pot, i.e. if you save £50 a month up your standing savings order by the same amount.
£50 a month =£600 towards your 10k goal!
Cancel unwanted subscriptions
Theres changing subscriptions and then there are cancelling unused ones that are offering you no value.
It’s so easy to get caught up in subscribing to a service and then not using it.
Four out of five Brits have now signed up to a subscription service for everything from magazines to food to gym memberships.
And research from the last three years show that 37 per cent of us are still throwing away hard earned cash on subscriptions that we simply don't use.
So for this step all you need to do is review your existing subscriptions and cancel any you don't really use.
Have a spending fast
Want to jump start your savings pot? Then a great way to do this is to do a savings fast.
This means no spending for a set period of time, my recommendation - one month.
This means for one month:
- No eating out
- No spending on purchases other than essential bills
- Take things like pack lunches to work
- Meal plan at home as takeaways should not be done.
- Only do activities that are free
The beauty of a spending fast is that you will learn what stuff is important to you. You might find somethings you havent even missed thus making your your future saving plans that much easier.
Do a saving fast to really understand what things today you are wasting money on.
Ways to earn more to save 10k
If you reached this part then you have looked at all parts of your finances and there simply isn't enough cuts to make up £833 a month.
Don’t worry thats ok- its still possible.
The last way is to pick up a side hustle that can help you generate more income for you to save.
Because we now live in a gig economy it’s is easier than ever to make some extra cash, here are a few:
Fill out surveys and watch videos
This is a really easy one that anyone can do. By signing up for free to Swagbucks you can get paid in gift cards to watch videos and fill out surveys!
Yes I know its true!
Rather than spending your time scrolling through facebook spend some time of on to earn vouchers to save on some of your expenses.
You can earn easily gift cards at places like Marks and Spencers, Amazon, Paypal and Wall mart if you are in the US.
Its really easy to set up an account just follow the link above and get a free welcome bonus just for verifying you email address!
Get Paid To Walk
Did you know you can get paid to walk? Yes you heard me right there are apps that will pay you money to walk and loose weight. So if you are a keen walker that could be worth looking into.
Rent out a spare room
If you have a spare room in your home you should consider renting it out part time through sites like AirBnB.
In the UK you can have a tax free allowance to do so.
Do delivery driving in your spare time
Take advantage of our gig economy sign up to services like:
- Uber: for taxi services if you have a car
- If you like in city Deliveroo might be of use to you
Bottom line - it is possible to save 10k in a year
As you can see there are lots of different ways to save 10k in a year depending on your individual circumstances this could require a few actions or maybe you just want to focus on one area.
Remember to keep track of your journey, progress is progress. You may have months where you struggle to save as much as you would like but is so important to celebrate the little wins.
Did the steps in this article help you figure out how to save 10k? Let me know in the comments below