Blog Misc 7 Simple Tips to Save $5,000 in A Year

7 Simple Tips to Save $5,000 in A Year

date September 22, 2021 time 5 min read 3067 views

Many of us want to save money and give ourselves some breathing space financially. However, it’s not the easiest thing to do and it takes not only discipline but also savviness. In this article, we will show you the way to save $5,000 in a year, secure your financial freedom and give you the foundation to invest more.

7 easy ways to let you know how to save $5,000 in a year.
7 easy ways to let you know how to save $5,000 in a year. (Source: mommyonpurpose.com)

If you are wondering how to save $5,000 in a year, you will have to be ready to do some things differently than you have done up until now. It is likely you’ve spent on unnecessary items and may not even realize you are spending so much. Hence, it is time to find tips and practical ways to cut expenses and find extra money to save.

Determine why you need to have a $5,000 savings plan

$5,000 is a nice chunk of money that you can do a lot of different things such as take a nice vacation, build up your retirement savings, build up contingency funds for emergencies, etc. Learning how to save $5,000 in a year is not an easy task; therefore, motivating yourself is easier when you know why you are saving.

You need to ask yourself whether you are willing to do things differently, even if you find it challenging to save $5,000 over the next 12 months. To make sure, you should jot down the goal in your notebook. For example, I’m hoping to save $5,000 in 2022 to save up enough money to buy a car.

Once you determine your “why,” everything else will flow.

Creating a budget

The first thing you need to consider after setting a goal is creating a budget. This is a simple task that can help you spend your money within your means. In other words, sticking to a budget can help separate your cash flow into categories such as groceries, transportation, subscriptions & memberships, party funds, etc. Then, you will build a monthly income surplus, pushing you towards your goal. 

Having a budget gives you a good head start on your mission to save $5,000 in year.
Having a budget gives you a good head start on your mission to save $5,000 in year. (Source: Getwalnut.com)

Having a budget is good but not effective if you do not track your spending. In order not to lose track, you can start by recording your expenses every day, and at the end of the month, look at your net income compared to your monthly expenses and see if you have enough money coming in each month to cover all your costs. When you look at your spending, you can locate the areas you spend too much to adjust it properly. That is a practical way to help you know how to save $5,000 in a year. 

Besides, tracking your spending habit is beneficial because you will be more careful about spending and know that you have to record all the details.

Increasing your insurance deductible

If you are wondering how to save $5,000 in a year, we will recommend starting by increasing your insurance deductibles. It is an easy way to lower your spending, which means raising the deductible on your auto insurance policy will result in quick savings. 

A recent study by CarInsurance.com estimates that just by bumping your deductible from $250 to $1,000, you can pocket an extra $30 per month. Another study reported that homeowners’ insurance premiums hover around $1200 a year. For example, consider your home and auto insurance deductibles. If you bump up your deductible from $500 to $1000, you could save as much as 25% on your premiums. 

Bumping your deductible can pocket extra saving money.
Bumping your deductible can pocket extra saving money. (Source: General.com)

You should talk to your insurance agent if you consider this tip. They will tell you how much you will save after increasing the deductible. 

Reducing food waste

Food waste not only costs money but also has negative impacts on the environment. According to a 2020 study from Pennsylvania State University, on average, US households throw away as much as $1800 per year in uneaten groceries every year. 

Reducing food waste completely may take time, but you can start implementing it now to save groceries and money. You may consider using a shopping list and start planning your weekly meals that use similar ingredients to keep food waste to a minimum. These tips sound very simple; however, they are cost-effective.

Cutting unnecessary subscription services

A recent study from NationWide.com has shown that the average price for basic cable is $60 per month, and that cost jumps significantly when you add premium channels. However, according to John Schmoll, founder of FrugalRules.com and former US News, there are several streaming services to consider that can slash those costs. 

If you’re considering how to save $5,000 in a year, try cutting unnecessary subscription services and reviewing them all to identify those you will cut. You can find free or low-cost alternatives, like Audible, which costs only $20/mo per month.

 Try cutting unnecessary subscription services, if you consider how to save $5,000 in a year.
 Try cutting unnecessary subscription services, if you consider how to save $5,000 in a year. (Source: Money.com)

Another alternative is Sling TV which Besides, Sling TV could be a great option that offers a selection of top channels like HGTV, ESPN, and CNN for $35 per month. Opting for this streaming service over basic cable will trim $25 off your monthly entertainment bill and more if you are paying for premium sports or movie channels.

Switching to a free banking account

When trying to save money, bank fees can eat away at your efforts, especially with average checking account maintenance charges hovering around $14.39 per month, according to a 2020 study from MoneyRates. Indeed, this is a completely unnecessary waste of money. 

However, by switching to a free checking account and keeping at least 2-3 months of your monthly expenses, a consumer can avoid paying any monthly fee. 

Sign up for credit card bonuses and rewards

Finding extra money is an excellent way to save, and using credit cards may help you easier to save $5,000 in a year?”. Don’t just swipe any credit card, make sure you’re using one that will help you maximize cash back on every purchase.

For example, with the Citi® Double Cash Card, you earn 2% cashback on your purchases. Spend $3,000 a month, and you’ll get $720 back over the course of 12 months. You might even get points that offer you free flights if you have travel credit cards.

Invest to save more

If you do not want to switch to a Free Banking Account or Sign up for credit card bonuses and rewards, investing in crypto like qtum coin may be a great idea for you to save more money. You can get started with minimal investments and gradually build your portfolio over time, even if you are on a tight budget.

MyConstant’s P2P lending platform could be an ideal component of your investment portfolio, providing you with steady returns on your terms. You can lend money online with us or deposit your USD.

Furthermore, if you own some cryptos and haven’t planned to buy more yet, you can earn interest on crypto up to 7% APR.

Sounds interesting? Sign up for a free account today and start investing.


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