How To Save Your First $10,000
Money rules the world and whether or not you want to believe it, that’s a fact.
Although money is not the root of happiness it can create freedom and opportunities.
Whether you’ve thought about owning a home, quitting your 9–5 to travel somewhere exotic or even paying off all your student debt once and for all $10,000 could help you achieve that.
If you’re ready to get serious about your finances then you’ve come to the right place! In this post, I’m going to tell you exactly how to save your first $10,000.
1. Decide What You’re Going To Do With The Money
It’s important to be clear about your financial goals so that when there are moments of doubt you have something to remind yourself to keep going.
Therefore, before you start your road to 10K you need to be very clear about what you’re going to do with the money and make the decision to commit to it.
Some options include:
- Pay off debt
- Downpayment on property
- Save for retirement
- Invest in stocks
- Travel
- Start a business
2. Create A Realistic Budget
Your budget is going to be everything when it comes to saving your first $10,000 and without it, you don’t stand a chance.
A budget will make the process simple, easy and realistic for your income and lifestyle. You have to understand yourself and your spending habits before you commit to saving any amount of money.
However, a budget doesn’t have to be complicated and boring. Name it something else if you don’t like the thought of budgeting, perhaps call it your financial freedom recipe.
Here are some simple steps to creating a budget:
- Write down your income.
- List your essential monthly expenses.
- List your non-essential monthly expenses.
- Subtract your essential & non-essential monthly expenses from your income and see what you’re left with.
- You’ll need to save $833 per month to save $10,000 in one year or $416 per month to save $10,000 in two years.
- If you don’t have an extra $833 or $416 go over your non-essential expenses and start cutting back until you do.
3. Cut Back On Your Monthly Expenses
Cutting back on your monthly expenses is one of the easiest ways to start saving more money.
There are a few ways that you can cut back on your everyday essential and non-essential expenses.
For essential expenses such as your phone bill, internet and car payment give your provider a call and ask if they can negotiate a better deal.
They will often reduce your payments as a sign of good gesture in response to your loyalty to the company so don’t be afraid to ask for what you want.
For non-essential expenses such as entertainment subscriptions, eating out and excessive spending simply ask yourself if short-term gratification is worth more than having $10,000 in the bank.
The fear of missing out and keeping up with peers can be an especially daunting feeling, but if you want to build wealth for the future sacrifices must be made in the present.
4. Set Up A High-Interest Savings Account & Save Before Spending
Saving before you spend your money will ensure that you are committing to your goal.
A lot of people get into the trap of spending their paycheque first then complaining that they don’t have anything left to save.
You can end that today by setting up auto-deposits to a new savings account so that it withdraws money from your chequing account every time you get paid.
Since it’ll likely take you a few months to a year to save up your first $10,000 why not gain some interest on it and earn some extra money in the meantime.
That’s where a high-interest savings account comes in handy, you add your money and it can gain anywhere between 1–2% in interest every year.
It’s money you don’t have to lift a finger to earn so if you don’t have one yet now is your chance to make a serious difference in your finances.
Some good places to open a HSA:
5. Try No Spend Days
No spend days are the perfect way to start getting into the habit of spending less than you earn.
No spend days are days where you do not spend any money on anything that is not essential.
A no-spend day can look like you only filling up your gas tank and not spending money eating out or buying anything at all for the entire day.
I challenge you to start off with 1–2 no spend days every week to eventually 3–7. The amount of money you’ll save doing this is incredible!
6. Celebrate Your Milestones
The road to 10K can be a long one so to keep your spirits up make sure you celebrate every milestone along the way.
Celebrate by treating yourself to something you’ve had to cut out of your budget, go out for a nice dinner or even buy yourself something you’ve had your eye on for a while.
Remember to celebrate within reason though, you don’t want to end up back where you started just because you got carried away with your success.
Final Thoughts
Saving your first $10,000 is going to seem impossible at times but once you get there you won’t ever turn back.
I saved my first $10,000 in 8 months on a 35K year salary at 22 years old.
As a young millennial, I know what it’s like to feel like I’ll never own a home or that I’ll never see the end of the student debt tunnel but with a change of mindset and attitude about money, anything is possible.
If you’re a young person trying to save your first $10,000 I’d love to hear about it in the comments below!
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