5 Steps to Save $10,000 in Six Months
During the pandemic, the U.S. personal saving rate soared to 32.2% in April 2020, up from 12.7% just one month prior. But now that businesses are opening back up and people are traveling and entertaining, you once again may find it a bit more challenging to save money.
However, it’s entirely possible to maintain your pandemic-era savings rate — and ramp it up to build an even larger nest egg. Here are five steps to saving as much as $10,000 in six months, income permitting.
Set goals and visualize yourself achieving them.
It’s one thing to say you’d like to “save more money.” It’s another thought process entirely to state a specific number and time frame, such as $10,000 in six months. Break it down, and that means you need to save $1,666.67 per month, or roughly $417 per week. If your income doesn’t allow for this level of savings, start with a goal to save $1,000, or even $100, this month.
Then take the next step and actually envision yourself achieving that goal. If it helps, write yourself a check for $10,000, post-dated six months from now, and place it on the bulletin board above your desk. Also think about how that level of financial freedom and security will feel to you. What would you splurge on knowing you have a comfortable nest egg?
Consider a spending freeze.
Although you may be envisioning yourself as wealthy — or even with an extra $10,000 in the bank — it’s important to watch your spending carefully to free up that $417 per week. You may want to take a page from your pandemic playbook and eliminate eating out and entertainment expenses.
Right now, many peopl are engaging in “revenge spending” or adopting a you-only-live-once attitude that can result in overspending, especially on trips and entertainment. If your goal is to save, halt these activities for 30 days. Having survived more than a year without these luxuries, you can make it another month if saving money is your priority.
Create a budget.
Even once you cut impulse or revenge spending, you won’t know how much you can save until you write a budget. Apps like Mint and YNAB (You Need a Budget) make it simple to track expenses, even if you’ve never written or managed a budget before.
Make savings deposits automatic.
Once you’ve eliminated unnecessary expenses and written a budget based on how much money you need each month for housing, utilities, gas, food and other necessities, schedule the rest of your income to go into your savings account automatically.
If you’re settling for interest rates of $.01%, look around at some online banks or credit unions that offer .60% interest or more. You won’t get rich or hit your $10,000 goal through these interest rates, but you will earn more over time — and that’s a smart money move.
Consider ways to make more money.
What if you’ve saved every penny you can from your current income but still haven’t reached that goal of an extra $417 per week? It’s time to manifest more money.
Your mindset is an important key to earning more money. Blogger Dena Joan of Live, Love, Simple begins every day with affirmations such as: “Money is flying at me from all directions.” This “abundance mindset,” as Joan calls it, opens your eyes to new opportunities and can help you become a money magnet. “When my thoughts became full of abundance, prosperity, and confidence, that became my reality,” she wrote.
You can manifest money in many different ways:
- A raise at work
- A side gig (or several side gigs)
- Selling items you no longer need
- A new business
- Tax refund
As you brainstorm ideas, keep your mind open to new opportunities to build up that $10,000 in savings. Then put any additional income into your savings account until you achieve your goal.
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