Yahoo Finance 4 Ways To Save $10,000 When You Make $50K to $100K
If you’re trying to save serious money in the near future, you’re not alone. GOBankingRates recently conducted a National Savings Day survey, and approximately 27% of respondents revealed they’re hoping to save more than $10,000 within the next year.
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Sherman Standberry, CPA and managing partner at My CPA Coach, said reaching this goal on a fixed income can feel daunting, especially if you don’t have a clear understanding of how to effectively allocate your earnings.
To help you start creating a savings plan, he offered a breakdown of the gross monthly income of several salaries.
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$50,000 Annual Salary
Approximate Monthly Gross Income: $4,167
“To reach a savings goal of $10,000 within a year, you would need to save about $833.33 per month,” Standberry said. “This equates to around 20% of your gross monthly income.”
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$60,000 Annual Salary
Approximate Monthly Gross Income: $5,000
“The savings goal remains the same at $833.33 per month,” he said. “But it represents a slightly smaller portion of your income — approximately 16.67%.”
$75,000 Annual Salary
Approximate Monthly Gross Income: $6,250
“Despite the increase in income, the savings goal of $833.33 per month remains the same,” he said. “However, it now represents about 13.33% of your gross monthly income.”
$100,000 Annual Salary
Approximate Monthly Gross Income: $8,333
“The monthly savings goal remains constant at $833.33, representing roughly 10% of the gross monthly income,” he said.
Note: These numbers are just estimates.
“It’s important to remember that these figures are based on gross income and do not account for taxes, living expenses or other financial obligations,” he said. “Therefore, creating a budget that factors in all income and expenses is crucial to determine how much you can realistically save each month.”
To save this amount, he said you need to have a clear understanding of your monthly expenditures and make necessary adjustments to increase your savings.
“This may involve cutting back on unnecessary expenses or finding ways to increase your income through side hustles or investments,” he said.
4 Ways To Save $10,000 in One Year
Now that you know how much you need to save from each paycheck, it’s time to figure out how you’ll find the extra money to put aside. Use these tips from Andrea Woroch, a consumer and money-saving expert, to get started.
Set a Budget and Earmark Savings
“You have to set a budget and follow it in order to meet any financial goal, especially when trying to save money,” she said. “It’s easy to overspend on frivolous purchases when you aren’t paying attention, so tracking your spending is key to sticking to your monthly budgeting plan.”
She said it’s important to add your monthly savings goal into your budget.
“You may need to adjust your goal date if your original isn’t feasible,” she said. “Apps like Mint can help you plan out your savings goal and keep you on budget, as they alert you when you’re about to reach your spending maximum for any single category.”
Reduce Monthly Bills
There’s a good chance you’re wasting money on bills without noticing it, Woroch said.
She said you can start lowering monthly bills “by negotiating rates with current providers, cancelling unused subscriptions, increasing your insurance deductible, unplugging unused gadgets and looking into cheaper providers.”
Increase Your Cash Flow
“There’s only so much you can cut back on,” she said, “and if it’s still not enough to reach your goal fast enough, think about easy ways you can make some extra money.”
She said taking on a side hustle is a great option, especially because there are so many you can do from home.
“For example, you can find freelance work through sites like UpWork, join Tutors.com as a virtual tutor, which pays between $20 [and] $50 per hour or earn up to an extra $1,000 a month pet sitting through Rover.com,” she said. “You can even make some extra money more passively by renting a spare bedroom through Airbnb or your car when it’s not in use via GetAround.com or Turo.”
She said you also can look for ways to make money from your daily purchases by using cash-back apps.
Open a High-Yield Savings Account
If you don’t already have one, you might want to open a savings account for the money you’re putting aside each month.
“Putting your savings in a high-yield online savings account will help you reach your $10,000 savings goal faster, since these accounts pay higher interest compared to traditional savings accounts,” she said.
Saving $10,000 in one year is a major commitment — but you can do it. Whether your annual salary is $50,000 or $100,000, reaching this goal will require a great deal of planning and discipline.
If you feel overwhelmed by the sacrifices you need to make, try to focus on the bigger picture. Whether you’re working to build an emergency fund, save for a down payment on a home, pay off debt or reach any other financial goal, the work you’re doing now will benefit your future.
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This article originally appeared on GOBankingRates.com: 4 Ways To Save $10,000 When You Make $50K to $100K
