10 Ways To Save $10,000 In A Year

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Saving $10,000 in a year can be life-changing for just about anyone. 

When you break it down, saving $10,000 in a year averages out to saving $27.40 per day. When you look at it as an average daily savings, it makes more sense as to how this feat can be accomplished. Perhaps the best way to save daily is to combine various money-saving methods.

In this article, we’ll go over 10 ways that you can save $10,000 in 12 months. Then we’ll go over some ideas for you can do with $10,000 once you’ve saved it.

Let’s jump right in.

1. Update Your Monthly Budget

First things first, let’s look at your budget. What are you spending the most amount of money on every month? Can you cut that back? 

Find time to sit down and work on your budget periodically. You can do this monthly, quarterly, semi-annually, or whatever works for you the best. The trick is not to stress over it. Budgeting isn’t designed to be restrictive and stress-inducing.

Instead, budgeting is there to give you a better picture of where your money’s going. By breaking down where your money comes from and where it goes, you can find ways to cut back here and there, or alternatively, increase your income. When you do this, you end up having more money each month, which will help you reach your financial goals.

Budgets can be created with apps, spreadsheets, on paper, or using envelopes. Use the way that makes the most sense to you.

Download Clean Cut Finance’s home budget template to help you get started. Then, use this beginner’s budgeting guide to get started.

If you prefer an app, head over to YNAB (You Need A Budget). YNAB has a monthly subscription, however, some people prefer the bells and whistles that the app has versus simply using a spreadsheet.

You can also simply write down all of your sources of income and all of your expenses and use a calculator to determine your cashflow.

Cutting back on specific areas of your spending, such as discretionary spending, will help you save money every month so that you can reach your goal.

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2. Spend Less Money on Eating Out

The average household spends around $3,000 per year eating out. That’s approximately $58 per week. Some folks certainly spend less, and some certainly spend more.

It’s perfectly fine to eat out once in a while, and assume you’re the average household spending $3,000 per year eating out. However, if you cut that in half, you’ve already saved $1,500 per year of your total $10,000 per year savings goal.

To slow down on eating out, consider cooking more. Don’t know how to cook? Is saving over a thousand dollars per year a good enough reason to learn? In the long run, learning to cook will put extra cash in your pocket day after day.

By cutting back on how often you go out to eat, you’ll be closer to saving an extra $10,000 per year.

If you still want quality meals but don’t want to pay restaurant prices, check out Home Chef. Home Chef is a meal delivery service with dozens of options each week for dinners. The company will send you the ingredients and all of the instructions. You’ll make your own restaurant-quality meals, and you’ll become a better cook at the same time.

The average Home Chef meal costs $8.95 per serving, easily half of what you’d pay for the same meal at a restaurant. In addition, when you use our link, you’ll get a $35 credit towards your meals. Check out Home Chef right now.

For saving money on other meals, check out our guide on how to save money on groceries.

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3. Lower Your Monthly Expenses

Lowering your bills every month is an excellent way to save more money. Some bills can be lowered by calling up your providers and negotiating your rate.

This can be as easy as saying you’re a loyal customer, but you’re having trouble paying the bill and don’t want to cancel.

Many providers will work with you and reduce your rate. This includes your cable, internet, and phone providers, to name a few. The app Trim will negotiate your bills for you and automatically identify subscriptions that you may no longer be using so that you can cancel them. While results vary, you can undoubtedly save several hundred dollars a year with Trim.

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You can cut your utility bills by lowering your consumption. This includes turning down your heat in the cold months, using less air conditioning in the warm months, turning off lights when you don’t need them on, and using less water.

Another option is to consider buying used cars instead of new cars. The average person will save around $150 per month on a used car auto loan versus a new car auto loan.

These are just a few examples. Living a more frugal lifestyle will skyrocket your savings. This includes cutting back on impulse spending as well.

Think of it this way: Each time you’re tempted to spend money, sleep on it, then wake up and ask yourself, “Do I need this, or do I simply want this? If I want this, how will this purchase make me feel in 6 months from now?”

As you add up more and more ways to save money on typical household expenses, you’ll continue to up your average daily savings, which will bring you closer to your goal to save $10,000 in a year.

Here’s a guide on 40+ ways you can lower your living expenses to increase your savings each month.

4. Make A Savings Goal

Saving $10,000 in a year is equivalent to just under $850 per month. Saving nearly $850 per month can be a daunting task. Making a goal can help as you’ll then create an avenue to get there. In addition, you’ll be more conscientious of what you’re spending and what you’re saving.

Do a 52-week money challenge where you save money each week. Saving $10,000 per year is just under $200 per week. Little things like buying less lunch at work, one less drink a day, cutting back on alcohol or cigarettes, or taking care of your health to decrease your healthcare costs can all help you reach your savings goal.

Taking on a side hustle will increase your earnings which will also help you reach your $10,000 savings goal.

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If you receive a tax refund each year, contributing your tax refund to your $10,000 savings goal can also be quite helpful.

You can also make a game out of your savings goals, setting incremental goals and rewarding yourself each time you achieve one.

Break down your savings goal into stages. Perhaps, in the beginning, you aim to save less per week, and you increase your weekly savings goal a little bit each week or month. That way, you have time to get a plan in place while still saving from the very beginning.

Setting financial goals is beneficial in general. Check out this article for a walkthrough on how to create SMART financial goals. SMART stands for Specific, Measurable, Achievable, Realistic, and Time-sensitive.

5. Have No-Spend Days Regularly

Go on a spending freeze on specific days or a week out of each month. On days where you have a spending freeze, the idea is to spend absolutely no money for any reason outside of an emergency or paying a bill that’s due.

The more days out of the month that you can go on a spending freeze, the more money you’ll save in the long term.

Spending freezes help you if you’re an impulse buyer as well. Many impulse buys are prevented simply by sleeping before buying.

Oftentimes waking up in the morning on a new day is enough to make you forget about the impulse item that you thought you wanted the day before. Click here for ideas on how to stop impulse spending.

Spending freezes won’t solve impulse spending, but it will help you get into the habit of spending less and saving more.

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Let’s use a simple spending freeze exercise. Pick a week out of the month and do your best not to spend money this week. If you need to pay a bill or spend money as a necessity, such as filling up your car with gas, or of course, eat, that’s fine. Avoid buying things that you may not need, such as something on Amazon.

Every time you would have spent money on something during your spending freeze week, write it down and track how much money you ended up saving. Then, use this savings as motivation to spend less money on any other typical week.

6. Invest And Earn Compound Interest

If you already have money and you’re simply trying to save $10,000 more, use your existing money to invest in the stock market. S&P 500 index funds historically grow approximately 9.8% per year when averaged over decades. M1 Finance has an easy-to-use investing account, where you can set up automatic investing for mutual funds or index funds to grow your money on autopilot.

While you may not be able to save $10,000 in a year just from investing (unless you have a lot of money to invest), you’ll certainly be able to set yourself up for some significant earnings.

Compound interest is when your money earns money on itself. It’s when you earn interest, and then you earn interest on the interest.

Use compound interest and investing to add to your $10,000 annual savings.

If the stock market isn’t your thing, alternative investment options exist, which include:

  • Real estate: Get started investing in real estate with Fundrise and get your first 90 days of fees waived. It only takes $10 to open an account and start your very own real estate portfolio, where you’ll earn both appreciation from property value gains and dividends that come from rent.
  • P2P lending: Loan money to other people and earn principal and interest each month when you open a Prosper account. You can loan as little as $25 per borrower to minimize your risk.
  • Cryptocurrency: Crypto is generally considered high risk, so only invest money you’re willing to lose. That said, some people have made a fantastic amount of money investing long-term in cryptocurrency.

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7. Pick Up A Side Hustle

Besides saving $10,000 in a year, you can also earn $10,000 in a year through side hustles. Side hustles can include making money online while working from home or going out and doing work in your community.

Some people do their side hustles once a week, others do them every day, and some people live off their side hustles, essentially working for themselves all the time on their own schedule.

Making money online may be one way you choose to earn extra cash. Whether it’s something like starting a blog or perhaps creating an e-commerce store with clothing and swag, there are many creative ways you can begin earning money to help you reach your $10,000 savings goal.

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Earning money can sometimes be easier than cutting back on expenses because you can generally only cut back on so much. In contrast, earnings potential is unlimited, depending on what you’re doing.

Almost anyone can pick up a side hustle and start earning extra money on the side. It doesn’t have to replace your full-time income, nor does a side hustle have to be something you frequently do; however, the money earned can go a long way.

Here are some quick side hustle ideas that can earn you $1,000 per month and eventually $10,000 or more per year:

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8. Automate Your Savings

Automating your savings helps you save money with each paycheck because you are paying yourself without even thinking about it.

One strategy is to have a checking account where all of your income goes to. Then, on the first day of each month, have an automatic transfer that sends a certain amount of money to your savings account. If your savings account is at another bank, this may make your money harder to access on an impulse, which is a plus.

This fixed amount forces you to save right away. If you have a retirement account, like a Roth IRA, you may consider automatically investing. Then, after you’ve saved and invested, use your remaining money to cover the bills and beyond that, have some fun money.

Here’s a basic example of how you can automate your savings.

Let’s assume you make $2500 per month after taxes and deduction, and you know that from your budget, you have $300 available each month to save and invest. You realize your emergency fund is a bit low, and you would like to add another $2400 to it over the next 12 months. The rest of your money you would like to invest.

Assuming all of your income is going to your checking account, such as one at Charles Schwab bank, you would hook up your checking account to your savings account and your investment account, such as a Roth IRA.

Then, you use an automated transfer on the first of the month to transfer $200 to your savings account and $100 to your Roth IRA.

What this does is it forces you to lock away money each month without even thinking about it. You won’t forget, nor will you accidentally spend that money. It’s already saved because you automated it and treated yourself as an expense.

9. Create Passive Income

There are many ways to create passive income streams, and even earning a few dollars a day passively can add up significantly over time.

For example, if you invest in dividend-yielding stocks, you’ll earn some money every month or quarter for no effort. A semi-passive way of earning income is to create a blog or YouTube channel and monetize with ads and affiliate marketing. Once your content is created, you’ll earn each day for your efforts.

Passive income takes time to create, and it’s often best to focus on one stream at a time so that you can build it up and make it stable and then use some of that money to fund the next one. Then, before you know it, you may have enough passive income to start paying some of your expenses.

As you build passive income, it becomes easier to reach savings goals. In fact, if you can create $27.40 in passive income a day eventually, you’ll save $10,000 in a year every year without much effort at all going forward.

Here are some more examples of passive income that could all add up to $27.40 per day or $10,000 per year:

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10. Track Your Progress and Celebrate Milestones

It’s essential to track your progress and celebrate milestones. This will help you stay motivated while also determining what’s working best and what needs improvement – or what to focus on more and what to focus on less. 

Before you can reach a savings of $10,000 in a year, you must first reach smaller amounts, such as $5,000 or $1,000. Then, celebrate each win by rewarding yourself somehow. 

Consider creating a spreadsheet or using a piece of paper to track your savings. One example would be to create 20 boxes, each worth $500, and check off a box, or add a sticker to the box, each time you save $500. Once all 20 boxes are checked, you will have reached your goal.

Celebrate as you save money. This could be something like treating yourself to getting your hair and nails done or buying a new video game. Of course, you’ll want to make sure you don’t spend too much as that would defeat the purpose of saving $10,000 in the first place.

What Do I Do With $10,000?

You may be on your way to saving $10,000, or you may have already done so. Now, the question is, “I’ve saved $10,000, now what?” There’s several things you can do with the money that you’ve saved.

  • What was your goal? First things first, why did you need the money in the first place? Were you trying to pay off a debt or save for something in particular? If you had something specific in mind, there’s your answer.
  • Pay down debt: If you have debt, such as credit card debt, use your hard saved $10,000 to crush it down to zero as fast as possible. Paying off debt never hurts.
  • An emergency fund: You may need to buff your emergency fund. Most financial experts recommend an emergency fund that can cover 3-6 months’ worth of living expenses. Designate a bank account solely for your emergency fund.
  • Investing: You could invest the $10,000 and compound your money year after year. This is an excellent use of $10,000 if you’re looking to make your savings grow further. Aside from the stock market, you can invest in real estate, P2P lending, bonds, into a business, or into yourself. Invested money can be best used for retirement.
  • Take a vacation: While you might not spend an entire $10,000 on a vacation, you could certainly spend a percentage of it. Check out this post on how to save money for a vacation.
  • As part of a down payment on a house: $10,000 can be either your entire or part of a down payment on your next house purchase. Track your savings each year and land the house of your dreams.
  • Buy a used car or put a hefty down payment on a new car: $10,000 can buy you a used car, especially with one that has over 100k miles on it. You can also put a sizeable down payment on a new car to lower your monthly payments.
  • Further your education: Invest in yourself by furthering your education. With a more robust education, you’ll find more ways to make even more money.

There are many ways to use $10,000, but one idea is to use the habits that got you the $10,000 in the first place to save more and more each year. Then, when you have all this money saved, you ascend the steps of financial freedom.

By increasing your savings, you get closer to the day when you are debt-free and financially independent.

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How Much Do I Need to Save a Month to Get $10,000 in a Year?

In order to save $10,000 in a year, you'll need to save $833.33 per month. By combining a strategy of saving money on living expenses and increasing your earnings, this can be achieved with time. One way to look at this is that you need to save $192.30 per week or $27.40 per day in order to reach $10,000 in a year saved.

Is It Possible to Save $10,000 in a Year?

It is indeed possible to save $10,000 in a year. Depending on how much money you currently make and how much you currently spend, the strategy to reach your $10,000 savings goal will differ. For example, if you make a lot of money but also spend a lot, then it makes sense to cut back on your spending. However, if you don't earn a lot of money and can't cut back much more than you already are, then it makes sense to find ways to increase your earnings.

Wrapping It Up

When you’re trying to figure out how to save $10,000 in a year, it boils down that there are many ways to do it, and oftentimes you’ll want to combine multiple ways.

Once you’ve learned how to save $10,000 in a year, you can challenge yourself to save even more the year after.

This will lead you to financial goals such as owning a house outright, worrying less about unexpected expenses, and having the freedom to enjoy your life because you’re not as bound by money being tight as you once were.

How are you saving money each year, and what do you do with the money you save?

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