Life will constantly remind that you need to have extra money set aside for the unplanned surprises that come along. Statistics say that even a $500 unplanned expenses will be a hardship for most families.
Think about what $1,000 could do for you when an unplanned financial need arises.
Why not take it one step farther and set yourself a goal to save $10,000 this year. $10,000 may seem like a big number and it can be, but think about how much security it can give you in a time of financial need.
If you break this amount down it comes out to about $850 a month. When you look at it that way, it does not seem insurmountable.
What Will It Take to Save $10,000?
Break the $850 down further and get some of it by reducing your expenses and the balance by making extra money. Who knows, you may be able to find the extra money in expenses alone and be able to save more than $10,000 in the next year.
What are you spending money on that you can do without? Look at your expenses and discretionary spending and figure it out.
Try looking at these variable expenses that may be able to be reduced:
- Cell phone bill – I was able to reduce my monthly cell phone bill by paying off the phones, taking my iPad off my data plan and reevaluating the plan itself. This allowed me to save $100 a month.
- Cable TV – there are a number of alternatives to cable that save hundreds over a year. Amazon Prime, Sling TV, Roku and Netflix are just a few of the options for saving money and still being able to watch your favorite shows. Savings can be $100 or more by eliminating cable.
- Subscriptions – These can really eat up cash $10 – $20 at a time. It does not sound like much, but if you have several of them you could find yourself paying $100 a month for things like gym memberships, magazines and online services. If you have subscriptions, evaluate them to see if any of them can be eliminated. When I did this exercise, I was able to eliminate $70 a month.
- Eating Out – Eating out at restaurants can cost you a lot. Even the cost of fast food can add up and so can the calories. If you can eliminate eating out once a week, you are most likely looking at a minimum savings of $100 monthly.
- Groceries – It is easy to overspend at the grocery store also. The price of convenience foods can add up quickly. If you truly want to save, buying things in their simplest form (whole chicken, whole fruits and veggies) cost the least. Buying in-season fruits and vegetables can save money as well as shopping with a list and sticking to it. If you dig deep, you can probably eliminate $100 – $200 a month from your grocery bill.
There are hundreds of ways you can cut back on your spending and you know better than anyone where the money is leaking.
If you are fortunate enough to be able to divert $850 a month from spending to saving, you will be well on your way to saving $10,000 in the next year.
Chances are you may not be able to find that much. In that case, you will need to think about what you can do to bring in more money each month.
How Can You Make Extra Money?
So, what would be some options for making extra money? You hear a lot about paid surveys, focus groups and credit card rewards.
While you can make money with all of them, personally, I would not rely on any of them for a revenue stream.
If you like to drive, there are many ways to make extra money.
These are a few of the well-known places that having driving positions that are easy to sign up for and get started making extra cash.
Babysitting, pet sitting and house cleaning are also great ways to make extra money. The petsitter in our neighborhood makes $17 per visit.
Each visit is 30 minutes. At that price, you could easily make an extra $500 – $800 per month with minimal effort.
Handyman tasks and yard work are another way of making extra money. And the good thing is you don’t have to find these jobs on your own.
Companies like taskrabbit.com and thumbtack.com are great resources for matching people looking for jobs with people that need work done.
Freelancing is another way to increase your income. Do you like to write? What about photography or graphic design?
Social media is hot right now and there are thousands of people willing to pay someone to manage their social media accounts. The internet offers a wealth of ways to make extra money.
Blogging is another way to make extra money, but realize that it may be several months before you are able to see an income from blogging.
There are many people that start blogs as a hobby or a way to pass on in their experiences to others. But over time they will develop a following are able to make money from their website.
One of the quickest ways to make extra cash (besides a traditional part-time job) is by selling things. Flipping items is a great way to take a small budget and turn it into a return of ten times or more.
You can start by selling what you have in your home that you don’t need or want. You can use the money from the sales to by more inventory to resell.
I know people that make a pretty penny by reselling garage sale items and items that they acquire for no cost. You would be surprised what people will give away for nothing.
Many people start “‘side hustles” to make a few extra dollars and they end up becoming a business that produces a full-time income.
A part-time gig that produces an extra $500 – $1,000 a month can be your road to early retirement or some other dream you have for your life.
Putting the Whole Process Together
Saving $10,000 a year (or more) is a two-part process. First, cut your expenses. This does not cost you any money.
You simply look at what you are spending and see where you can reduce and eliminate.
The biggest part of this challenge will be sticking to the plan and not being tempted to spend the money you have identified as cost savings, but you can do it.
The second part of the $10,000 a year savings challenge is finding a way to make extra money. Take this opportunity to find your passion, but don’t overthink it.
Find something you can embrace and figure out a way to make it pay off. Once you find something you like and can make a buck and the same time, things often fall into place.
After you get started and see your first few dollars, you should be able to scale and grow your side hustle.
Saving $10,000 a year can sound like a huge undertaking. If you can successfully cut back on expenses and make a few dollars on the side, you will be well on your way to being able to save $10,000 in a year.