If you found yourself with $10,000, what would you do with? It might be something that you have thought about before or not. Yes, it may be fun to spend this money, but wouldn’t it be better to save it for financial security and peace of mind? You bet. Unfortunately, some people would think of ways to spend it on a fabulous day at the spa, a vacation trip, shopping spree and you name it. Some with more wisdom would probably use some of it to pay down debt and build up their emergency fund.
Take Baby Steps
To save $10,000 in the year 2016 (current year), you should take baby steps. You can start by putting away a $100 at a time. Set a short term goal to see how much you can afford to save each week to reach the $10,000 mark at the end of the year. Calculate your income and expenses to see how much money you would have left over and use that amount to put in your savings account.
The Extra Money
However, before you put away in your savings, use some of the extra money to pay down some of your debt. After doing this, you should consider putting away some of the extra money to cover up to six months of bills, in case an emergency occurs such as loss of employment, serious illness or accident.
The Goal Realized
$10,000 saved for the year is a major goal to consider, but it is attainable. You just have to do some financial planning smartly, creating a specific budget and sticking to it. Keep track of your spending and try not to spend money on impulse. Yes, you have to be disciplined, if you want to meet this goal.
Begin with Wisdom
If you are unable to achieve this on your own, you should seek professional help from a financial advisor and/or planner. That is the first step toward wisdom. If you already have one thousand dollars put away, you already know how to save. Saving money is the wisest thing to do when you realize that unexpected situations can occur. It will bring you a sense of relief to know that if your pet needs to go to the vet or your car needs to be repaired, you can afford it. The last thing you want to do is to dip into your emergency fund, but if that is all you can do, at least you have that option.
Have a sit down with your family members to discuss budgeting and the things that the family will have to cut back on. Determine what you will cut out of the grocery list – things needed and not the things wanted. If your budget is flexible, it gives you more traction to save. If there is another income earner in the household, it makes it easier to budget and save. The additional income gives you an edge to save more. Along with budgeting, the extra income can free up some more money for you to save.
Freeze your spending. Don’t make any major purchases for the year. You have to be disciplined with this, though. Let someone in the family know of your goal and they will make you accountable. If you are accustomed to going to the hairdresser or nail tech every two weeks, change it to once per month. To save even more, you can do your nails and hair at home or use the expertise of a family member or friend.
There are other ways to save money such as spending less at the grocery store, taking on a second job to earn more, or working more hours.