If you want to know how to Save $20,000 in a Year, it’s indeed possible! This article reveals very important tips that can help you achieve this!
Why Save $20,000 in a Year?
Did you have a New Year’s resolution this year?
Perhaps you wanted to lose weight, give up a habit that wasn’t too healthy, spend more time with your family, etc.
Are you on track to achieving that goal? If so, congratulations.
If not, where did it go wrong?
The unfortunate reality is that anybody can have a goal in mind. They even go as far as setting up a plan of action and a step-by-step process to achieve that goal.
However, human nature is as such that we can get easily sidetracked, lose our focus and eventually give up on the achievement of those goals.
I believe that the secret to achieving a goal in life is taking steps towards that goal one day at a time. Achieving a goal is a process of daily success.
To Save 20k a Year – Consider the Mountain Climber
For a mountain climber, scaling a mountain of any considerable height is not an easy task. It is not an overnight adventure but takes considerable time.
In fact, the process for a mountain climber is to go from station to station to station in that progression of reaching the summit.
The goal or focus, of course, is to reach the mountain’s highest peak. But the plan of action requires a day-by-day regimen of trudging slowly but surely towards that goal.
With all of this in mind let us set out to scale the financial heights of saving $20,000 in a year.
15 Best Tips to Help You Save $20,000 in a Year
Daily Goal or Achievements…
It’s always important to have a plan.
Therefore, for the individual who wants to save $20,000 a year, it is important to have a plan.
In other words, how is that goal of saving $20,000 in the year going to happen?
Also, as part of the plan, it is important to put specific milestones in place so that one knows where they are and where they need to be at certain times throughout the budget year.
The plan, therefore, should include what the goal is, the objective, and what are the steps that one is going to take?
On the income side of the budget ledger, it is important to look at ways and opportunities that one can increase their income.
Any goal worth achieving takes a little work and effort. It doesn’t come overnight and may require little sacrifice on the individual’s part.
Additionally, one should look at the expense side of their budget ledger to see what sort of expenses can be trimmed from the overall budget for the household.
Examples could include reducing the entertainment line item and cut back on specific channels or other streaming services that are subscribed to.
3. Cut the Cable
It will come as no surprise for anyone who still subscribes to cable that the bill has become astronomically high.
Consequently, an individual may be paying well over $100 a month for close to 100 channels that they hardly even being able to watch or view.
Therefore, to save a quick hundred bucks a month the individual can make a painful call and speak to a person who will try to talk you out of cutting the cable.
However, when it’s all done and said, you will feel a whole lot better.
4. Increase Your Income
If your current budget zeros out, in that your income equals your expense, it is going to be very difficult to save $20,000 a year.
Therefore, adjustments need to be made on both sides of the ledger.
To achieve a savings goal of $20,000 for the year it is most likely going to take an infusion of extra income on that side of the financial budget as well as cutting out some expenses
This can be accomplished by taking on some odd jobs that may pay $20 an hour.
Therefore, for example, if you took this odd job for one day out of the weekend then that would earn you $160.
If you did this for each of the weekends that would earn you $640 extra a month.
In this scenario, you would be one-third of the way in earning the needed cash to be set aside each month to achieve your $20,000 goal.
Talking about savings, below are some helpful guide to saving money:
- Why You Should Save Money
- Tips for Saving Money from Salary
- The 30 Day Rule to Save Money
- How to Save 5k in 6 Months
- Best Tips for Saving 10k in a Year
- Best Tips for Saving 3k in 3 Months
- Best Tips for Saving 5k in a Year
- Best Money Saving Mobile Apps
- Best Coupon Sites to Save Money
5. Celebrate Milestones
For the sake of argument let us say that the first milestone you wanted to reach was after two months into this dedicated program.
Therefore, after two months you will have saved $3,333.32. This is cause for celebration.
When you reach that milestone, it is important to celebrate. It doesn’t need to be anything extravagant or contrary to your attempts to try to save money.
It’s just a celebration of that amount and your dedication and commitment to hard work and achieving this goal.
The celebration could be a night out, it could be buying a technology device that you’ve been looking at or it could be even investing in a couple of books to help you stay on track and learn even more ideas about saving.
The important thing is to celebrate your achievements and to celebrate your accomplishments.
Another good tip is that as we as human beings love our competition. We always feel like we want to outdo the other and so we become competitive in trying to outperform one another.
A quality tip in saving $20,000 a year is to compete against someone else in achieving their financial goal.
It doesn’t need to be the $20,000. It can be a smaller amount, but the bottom line is that we thrive on competition.
Therefore, the competition would begin if the individual was willing to compete at 50% of your $20,000 goal and try to achieve $10,000.
Everything would be the same, but the playing field will be leveled by doing it proportionately and percentage-wise rather than overall totals for the year.
As part of the process, it would be good to compare where each is after so many weeks or months into the competition.
Also, the incremental winners could, rather than spend money, wash each other’s car, preparing meals, do the housework, etc.
The purpose is to compete in order for both of you to be successful.
7. Invest Your Money
Another powerful step on your journey to save $20,000 for the year is to invest that money as you move along. It doesn’t need to be in large chunks.
If you choose to go with a three-month CD roll over that matured CD into another three-month CD or possibly a six-month CD.
The idea is that you’re working hard for your money so, therefore, let your money work hard for you.
8. Help from Employer
If an individual is working for a company that is good to their employees, they may be able to participate in the company’s 401(k).
If this is a benefit that is offered, it is foolish not to participate. This is because you would be leaving their match or money on the table.
This can be part of your $20,000 goal.
9. Delay Spending
Stop! Don’t spend that money!
If the temptation arises to purchase a large ticket item, a valuable tip is to not give in to this temptation. It is critical to delay your decision to purchase.
By not giving in to this temptation you are delaying the spontaneity of the moment and not giving in to self-gratification.
By delaying your decision, you are not saying to yourself that you’re not worthy of what you wish to purchase or that you don’t deserve it.
You’re simply saying I’m going to delay this decision and in a month’s time if that desire is still there then I will proceed with the purchase.
Often, we as individuals get into financial difficulty because we are compulsive buyers, and we purchase things in a spontaneous moment.
This tip is to delay that compulsiveness and instant gratification.
10. Give Up Your Car
Another way that an individual can save some significant money each month is by giving up their car.
The individual can sell their car or even if they were just to park it on a more regular basis.
The cost of operating a car is determined by taking what the IRS allows for mileage reimbursement.
Currently, IRS guidelines allow the reimbursement of individuals who utilize their private car for business a little over $.55 per mile.
If an individual uses their vehicle five days a week and travels 50 miles round-trip every day that could add up to some significant money.
Specifically, 50 miles a day times five days in a week times four weeks in a month times $.55 would equal $550 a month.
11. Quit One Expensive Habit
This particular tip does not encourage living a monastic lifestyle.
This tip is to simply suggest to the individual that by giving up one habit they may be able to save some significant dollars over the year.
If an individual is a smoker and they gave up their cigarettes, they would save the expensive cost of purchasing cigarettes and loss of the side effects would be helping them to have a healthier lifestyle.
Another possibility in giving up a particular lifestyle choice would be to give up a weekly purchase of a six-pack of beer, giving up Starbucks coffee for three out of the four weeks of the month, or cutting back on eating out.
Each of these decreases in expenditures could help the individual to reduce their overall expenses for the month by anywhere from $100-$200 a month.
12. Automatic Saving Transfers
Another way to save one’s money that can prove to be effective and powerful is to automate their savings.
By setting up an automatic transfer with your financial institution you can save every payday by setting aside a certain amount to be transferred to a savings or investment vehicle.
When this happens automatically it is like clockwork and the individual doesn’t need to even think about it. It just occurs.
When you look at a goal of saving $20,000 a month it seems like it can be a daunting task and almost insurmountable.
The best thing to do is to “chunk it down” and work on small goals at a time rather than concentrate on that overall goal of $20,000.
When you think about it, $1600 plus $66 is not too bad of a goal.
13. Give Up Gym Membership
So often especially at the New Year, our intentions and resolutions are made with nothing but the best for ourselves and our family in mind.
Unfortunately, as the days turn into a month and slipway so do the thoughts of our New Year’s resolutions.
Perhaps as part of a resolution or a commitment to get healthier, the individual took out a gym membership.
Even though they might be using this, the expense of the state-of-the-art fitness center can certainly detract dollars from the budget.
Certainly, this tip of giving up your fitness center membership is not designed to take away your commitment to be healthy.
It’s just an opportunity to rethink the dynamics of working on your health by investing that money in a home gym or buying the needed equipment that can be utilized to provide the same health benefits.
14. Give Up Those Streaming Services
In today’s entertainment business, the reality of à la carte programs offered through streaming services is becoming more and more plentiful.
If an individual has a subscription and is hardly viewing these services, it may be time to put the streaming services on a diet by cutting back on them.
Besides, in reality, how many hours of television can one really watch through their tablet or other devices.
15. Limit Your Dining Out
As Americans, we love our food, and we love dining out.
There are many advantages to dining out. It’s a time to enjoy specialty foods, or foods that one particularly likes, or a timeout with the family.
This tip is not suggesting that you stop eating out entirely.
This suggestion is simply based on the possibility of cutting back on the number of times one eats out.
So often it is easy just to take out a piece of plastic from your wallet or purse and hand it to the waiter and thank them for their service and the enjoyable food.
However, if you think about it, a meal for four can run close to $60 or $70 or more.
Then when you add on the tip and possible drinks, you’re looking at a restaurant bill of close to $100.
If you do the math on this and if you eat out more than two or three times, that is a considerable chunk of money out of one’s budget.
Certainly, it can be added to that $1,666 savings goal that you’re looking at for each month.
How to Save 20,000 a Year FAQs
How Can Saving $20,000 Be Possible?
The answer is to take the goal one step or milestone at a time.
Rather than concentrating on the goal in its entirety, break it down into smaller bite-size chunks that are more achievable.
Then, as each of these successful goals adds on to one another, the sudden realization that you have saved $20,000 in a year becomes an amazing accomplishment.
What Should I Do With the $20,000 When Saved?
The best thing to do with the $20,000 that you have saved over the year is to continue to invest that money and have that money work hard for you.
These dollars can be invested in opportunities that provide a good return on money.
Some of those investment options would include stocks and bonds, real estate, or other proven investment vehicles that have stood the test of time as far as investing one’s money.
As this article has revealed, it’s indeed possible to save 20k a year if you know how and what to do.
Thankfully reading this article provided as many as 15 powerful tips that can really help you achieve this.
You have that financial mountaintop in your sights.
It seems like an awfully high mountain. However, you have learned through your research that it is not scaled in one or two days. It is a process.
You are now ready to initiate that process in achieving your goal of having $20,000 saved by this time next year.