Are you looking to learn how to save 10k in a year? Whether you’re looking to save $10,000 or £10,000 it doesn’t matter.
The difference between pounds and dollars doesn’t matter in this case.
That’s because the final goal of 10k (and the amount of work it’s going to take you to get there) is the same!
In this post, I’ll be highlighting how to save 10k in a year as well as the different things you can do to achieve this.
Certainly having the goal in mind is great, but there are real actions that you’re going to have to implement in your day to day life to make this goal a reality and we’ll look very closely at that.
Why Save 10k In A Year
You should only be looking to save 10k in a year if you’re out of debt.
If you have any debt you’ll want to clear that debt before beginning to save money – except for your emergency fund.
Once you’ve cleared your debt you can begin looking to your why.
Finding your “why” for saving 10k in a year is going to be vitally important to helping you achieve the goal.
Your why for saving 10k in a year might be;
For a wedding
For a luxury holiday
For a kitchen renovation
For a house deposit
For a larger safety net
When you’re thinking about spending money that comes out of your contribution to your 10k in a year, you’ll want to come back to your why.
Your why needs to be strong enough that you’ll put that item of clothing down, or decide against that meal out for your ultimate goal of saving 10k in a year.
The Math!
As I mentioned in the introduction it doesn’t matter whether you’re trying to save £10,000 or $10,000 as the final amount is the same.
For this example, I’ll be using dollar remarks, but feel free to change this to your own currency. It doesn’t change the math.
There are 365 days in a year (except for a leap year)
Which means you’ll need to save £27.39 a day to achieve £10,000 over the year.
That’s £191.73 a week, £833.33 a month.
Looking at the numbers like that the goal can easily seem impossible. However, there are months you’ll no doubt be able to save more and months you’ll simply have to save less.
Let’s look at how we can make these numbers achievable in your everyday life.
How To Save £10,000 In A Year
Now we understand the reason for saving our 10k in a year, are motivated by our decisions and understand the actual numbers involved we can begin to create an action plan.
Set A Budget
Firstly, you’re going to want to begin by setting a budget if you don’t have one already.
Understanding where you can save money is first going to require you to understand where you spend it.
Either use a free budget spreadsheet or a budgeting application to set a budget that’s realistic in relation to your current spending.
Look back on your previous expenses on credit card and debit card statements to understand where your money is going.
Cut Uncesscery Expenses
Next, you’re going to want to cut your unnecessary expenses.
It could be the gym membership you never use or the morning latte you get on your way to work.
These are all likely to be £5 amounts which repeatedly every day, every week or every month total a large contribution of your overall goal.
Again, being realistic here is the key.
If you’re using a company or a service that you simply can’t forgo, or feel that is contributing significantly to your life look at switching to another company or a similar more affordable service instead.
Change Utility Companies & Go On Lower / Smaller Packages
All this leads us to changing companies and going onto smaller / lower packages.
This specifically applies to utilities and other bills you simply can’t cut such as your council tax, water, gas, electric etc.
Changing companies and going on lower rates can help you save up to 30% in this category alone.
Which I know for many of us is our second largest category after our mortgage or rent.
Increase Your Income
Sometimes, saving isn’t enough.
If you’re only earning £25,000 a year then saving £10,000 of that seems completely unrealistic.
And, guess what?
You’re right, it probably is.
In which case we need to look at ways you can increase your income.
For many of us, saving 10k in a year is going to require us to both increase our income and reduce our spending.
So how far you go with this particular task is likely to depend on your personal situation.
For example;
If you’re already earning £50,000 a year.
Then you can save around £6,000 following the methods above.
In which case going out and getting a whole second job probably isn’t worth the time and hassle.
Instead, I’d hustle for a bonus or some overtime.
Consider a side hustle.
Eventually thinking about perhaps moving to a promotion or moving positions or companies to achieve a larger salary.
However, if you’re on a much smaller income, say for example £25,000 a year.
Then you’re probably not going to be able to save much more than £1,000 a year towards your £10,000 goal.
In which case you’re going to need to push the income harder.
Look towards getting a second job, side hustling where possible or gaining a further education that allows you to move into a higher-paying career.