How To Save $10,000 In A Year – 10 Steps To Get Started

woman placing a quarter into a savings jar to save money every 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. Perhaps the best way to save daily is to combine various money-saving methods.

In this article, we'll go over 8 ways that you can save $10,000 in 12 months’ time. Then we’ll go over some ideas for you can do with $10,000 once you’ve saved it.

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.

Here’s a link to Clean Cut Finance’s home budget template to help you get started. Feel free to check out this beginner’s budgeting guide as well.

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

Cut Expenses and Skyrocket Your Savings

Save more money each month with our 19+ strategies to lower your expenses. You'll also learn top tips to pocketing more money in your day-to-day life.

2. Spend Less Money on Eating Out

The average household spends around $3,000 per year eating out. That's about $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 on eating out. If you cut that in half, you’ve already saved $1,500 per year on your $10,000 per year savings goal.

A great way to save on eating out is to use an app like Ibotta to go grocery shopping. Not only will you save money by shopping for food instead of going out, you’ll save even more due to the app rewarding you with cash back and discounts. 

To slow down on eating out, consider cooking more. Don't know how to cook? Is saving thousands of 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.

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 certainly save several hundred dollars a year with Trim.

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.

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 19 ways you can lower your living expenses to increase your savings each month.

Lower Your Cable, Internet, and Phone Bills

Sign up for Trim and get your bills negotiated automatically. Trim will also identify any subscriptions you may no longer be using to help you save even more money!

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4. Make A Savings Goal

Saving $10,000 in a year is equivalent to just under $850 per month. Saving nearly $1,000 per month can be a daunting task. Making a goal can help as you’ll then create an avenue to get there. 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 approximately $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 so that your healthcare costs decrease 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.

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.

5. Have No-Spend Days Regularly

Go on a spending freeze on specific days or a week out of the 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.

I will add that spending freezes won’t solve impulse spending. They’re useful to help you, but it’s important to also examine the underlying issue that’s making you feel the need to impulse spend.

Let’s use a simple spending freeze exercise.  Pick a week out of the month and do your best to not 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 possibly 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. 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 via Robo advisors, 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. Compound interest is often thought of as the eighth wonder of the world.

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

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.

Earning money can sometimes be easier than cutting back on expenses, because you can generally only cut back on so much, whereas 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 do frequently, however, the money earned can go a long way.

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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.

This fixed amount forces you to save right away. If you have a retirement account, like a Roth IRA, then you may consider automatically investing as well. 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/or 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 (by the way, I recommend Charles Schwab bank for online checking, for both ease of use and amazing customer service) – You hook up your checking account to your savings account and to 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 greatly over time.

For example, if you invest in dividend-yielding stocks, you’ll earn some money every month or every 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. 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 are able to 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.

10. Track Your Progress and Celebrate Milestones

It’s important 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. Celebrate each win by rewarding yourself somehow. 

What to 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, what should you do with the $10,000? 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 definitely 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.

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. When you have all this money saved, you ascend the steps of financial freedom.

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

Cut Expenses and Skyrocket Your Savings

Save more money each month with our 19+ strategies to lower your expenses. You'll also learn top tips to pocketing more money in your day-to-day life.

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?

18 thoughts on “How To Save $10,000 In A Year – 10 Steps To Get Started”

  1. Great advice! I think the cost of eating out is something a lot of people overlook. I’ve heard that it’s cheaper than groceries (from couples and singles with no kids), but in turn, most of the friends and family who stated this were drowning in debt. And when they tallied it up a few were spending more eating out they were spending more per month than my mortgage payment!

    1. Hey Cassie! Yes, when my wife added up how much we were spending on going out to eat, versus what we were spending on groceries, it was pretty unimaginable. My wife and I can cook a meal for two for under $10 easily, but if you were to go out to eat, say for dinner, you’d be spending $10+ per person, before tax and tip. It’s definitely something a lot of people don’t consider when looking to save.


  2. Nice list of ideas. If I may add:

    3 more ways to cut energy use cheaply:

    1. Eliminate drafts around windows, doors and electrical outlets. Cost is a tube of caulk or rolling up a towel and blocking air coming in through a door threshold.

    2. Replace any incandescent bulbs with LED immediately. At 13.3¢/kWH and $1.50 a bulb, it’s a 45 day payback if on 5 hours a day. 60 & 75 watt equivalents bulbs are $1 @ Dollar Tree. Still less than a year payback to replace CFLs.

    3. Insulate any exposed hot water pipes with preslit foam sleeves from the hardware or big box stores. Payback is about 1 year. If the side of the water heater is warm, insulate it or buy a hot water heater blanket.

  3. These are fantastic suggestions, Dave! Thank you for sharing each of them.

    You’re right about saving money on the ‘little things’ that add up. I used to love those cold cans of espresso. At only 4 in a pack for $6-8, this habit was really adding up. Simply finding an espresso grind I love, brewing and leaving in the fridge overnight to chill saved a bundle. I can definitely relate to you and your wife with the energy drink savings because of this.

    Eating out is a HUGE money pit. Thankfully, my husband and I are homebodies and prefer to cook our meals. Our family members go out almost daily and when they share with us what they spend, we’re blown away.

    Sitting down and really figuring out where each dime is going helps so much. We often don’t realize just what’s causing our balance to continue on the downward spiral, even with the best of intentions.

    You’re helping a lot of people. Cheers to your continued success!

    1. Hi Holly! Thank you so much for your kind words 😊 They are truly appreciated. I’m glad this post made a lasting impression on you!

  4. These are great ideas! I have never heard of the Trim app before. I might have to try it out. It seems like our internet bill goes up monthly (slight exaggeration, but seriously…). Thanks for these tips.

    1. Hey Erin! Trim is great at negotiating bills – we had SiruisXM Radio for a while and we saved over $200/yr due to Trim.

  5. I believe your first point will get many people half way there. By writing down, and seeing how much money is spent on often useless things, cutting them out will happen automatically. 😀

    1. I agree – My wife and I regularly review our spending and find that we’ve spent so much on things we don’t need

  6. Kelly Hopkins

    Great article! These are all very practical actionable steps you can take to save money and grow your money! Thank you!

  7. I love the advice on the automatic savings. I need to try that. And I’d be happy to spend $10,000 on a single vacation!!!

    1. I wonder if $10,000 would cover a vacation for two in Australia, considering that the flight would eat up a lot of it! 🙂

  8. These are really great tips! I’m checking out the app Trim now to cut bills. Thanks for sharing!

    1. Trim helped my wife and me so much! I hope you are able to find good use of it 🙂

  9. No spend days are essential! I feel like prior to the pandemic, I had plenty of these. But being bored in the house definitely increased my online shopping.This is all such great advice! Thank you!

    1. Rock on! Yes, no spend days can really help us save money. I always suggest to people who need to save money to have regular no-spend days or a week out of the month 🙂

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