How to Save $10,000 This Year
Would you like to know how to save $10,000 this year? I am going to give you the 4 steps required, and you will be on your way!
Why do you want to save money? That’s actually a very important question. Without an answer as to WHY you want to save money, whether it is $10,000 or even $1,000, you most likely won’t accomplish your goal. Your daily habits will serve as a hurdle and prevent you from achieving the goal. You must have a big enough WHY to keep you focused and stay the course when temptations come your way.
Step #1 is to write down your WHY! Sounds simple I know, but after working with people for over 20 years developing personal life strategies, I have found this step to be critical. You MUST write down WHY you want to save this specific amount of money and it must be a compelling WHY. Your WHY becomes the daily reminder to keep you committed and motivated as you are changing your habits. A weak WHY is usually short-term focused and involves purchasing something you want. That is not a compelling life changing reason. You may accomplish saving the money short-term to fulfill your desire, but that will not change your mental approach to money or evolve into permanent, life altering behavioral change.
If you struggle with developing your WHY, I recommend you check out my YouTube video entitled YOU ARE THE C.E.O. OF YOUR OWN LIFE (www.youtube.com/watch?v=HEgdnrD63rY). It will help you in establishing your WHY.
Step #2 is to determine how much money you can save each month. If you read my book, BEAT THE SYSTEM AND CREATE YOUR OWN PATHWAY TO WEALTH, I walk you through the process of defining your expenses by NEEDS and WANTS. Here is a simplified version: Access your most recent monthly bank statement and go through it. List everything you spent last month that was not an absolute NEED. Obviously, you have to make your rent or house payment, car payment, plus utilities, and you must eat. But after those core monthly NEEDS, list out every other expenditure. Categorize those additional expenses based on what you see trending: groceries, restaurants, clothing, electronics, recreational activities including movies. Just define your categories based on what you are seeing. Once you categorize them, tally up the total monthly amount in each category. This exercise should give you a good idea how your monthly income is breaking down. If it is helpful, do a 3-month analysis in case you have some fluctuations. If you are ambitious, you might do it for the year and even create a simple graph. Data provides us direction and accurate decision-making.
By the way, if you have numerous expenses to Target or Walmart then you may want to even look at those receipts to categorize how the money was spent. Was it an actual need or were there many “add on” items that fall into more of the WANT category or at least the “I could have waited on that item” category? Sometimes waiting on some items is in your best interest especially if you are saving a specific amount and the purchase detracts from your ultimate savings goal.
Invest the time to analyze your list. How much money does it represent? For most of the people I mentor, it is surprising to learn how much of their income is actually spent on frivolous things. Many of these purchases will be totally forgotten by you in a few months.
This is where the rubber meets the road, so to speak. I am not suggesting you stop living your life or doing all the things you like to do. I just want you to reexamine your WHY, and now logically look at how you can modify some areas of spending to achieve your goal for the year. There is usually a balance to be achieved between enjoying our life in the short-term and preparing for the future. The data informs your HOW so you can start saving and be strategic about where you are intentionally cutting back. For example, if you eat out 6 days a week, you could drop that number to 2 or 3 days a week and save the difference. It’s amazing how much money is spent weekly on eating out! My husband was eating out daily when I first met him and it was the primary area he cut to save his first $5000. The experience changed his life.
Based on your numbers, Step #3 is simply to determine how much of your expendable income you can save next month just by cutting your spending in key areas. Yes, it’s going to change the way you spend your money, and that certainly requires some behavior change, but that is the goal based on your compelling reason WHY you want to save the money!
If you determined you spend $1,200 a month on things that are NOT NEEDS, that is the number you have to work with. Decide how much you want to save, and how long you are going to commit to it. If you want $10,000 at the end of the year, then you are going to have to figure out how much you must save each month to get there. How much money you are willing to save is YOUR CHOICE, and no one else’s, based on the level of sacrifice or change you are willing to take on. Another of my YouTube videos I recommend is RICH OR POOR, IT’S YOUR CHOICE (www.youtube.com/watch?v=uu0gJPM4J0Y&t=1s) .
Finally, Step #4 is setting up a bank account that is solely for your savings. You want to make it more challenging to access these funds, so don’t mix them with other accounts. Set up a savings account that you define as “off limits” so you don’t develop a habit of dipping into it at the slightest challenge.
I have been following these simple four steps for decades to achieve optimal wealth. It isn’t brain surgery! You just have to take the initial steps and be willing to do it.
I love to hear other creative ways you save money, so drop me a line in the contact section of my website and share!
As always remember, YOU ARE THE C.E.O. OF YOUR OWN LIFE!