Is it possible to save $5000 in a year on a single income and a very tight budget? Yes, it is very much possible and can be done. I have done it, and I feel like anyone can do it. So take this money-saving challenge and start saving.
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I am not working a job, and I make some money online, but the money I saved was from our single income. I was not earning a single dollar at that time.
We had to make some changes in spending patterns and how we manage the money. I am surprised at how a saving challenge has changed my money habits.
After a saving challenge, you will be surprised at your money habits. Instead of spending and buying new things, saving will become your priority. It happens. It helps you in becoming conservative about money.
Here are the most important steps you will need to start saving.
Take this money-saving challenge and save $5000 this year
1. Make a Budget
I know this has been said many times, but I want to emphasize it again. Because this is the primary and most crucial step if you want to create wealth. this is why big companies develop budgets.
A budget will let you understand your financial habits and your spending patterns. Once you know how you spend your money, you can save a good amount of money to build your savings.
2. Tracking your spending
If you pay attention, you can save money by skipping many items that may not be necessary.
After creating your budget, look at your spending. I mean, now you have a dedicated budget and can track your spending. Try to figure out the necessities and where you can save money.
3. Save on shopping with cashback sites
You will be able to get at least $50 a month
While shopping online, always shop from online shopping sites. You will be able to get some cash back, and you can always add that money to a savings account.
Rakuten (earlier Ebates): This is the best cashback site, and I am sure you will be able to save a lot of money on necessary items.
Cashrewards: This one is for Australia. You get $5 for signing up, and when you purchase, $20.
4. Sell anything you are not using
At least $200 to start
If you have stuff lying in your house that you are not using, sell it on your local marketplace. Then, save that money in your saving account. When you have some money saved, it will give you some motivation to keep more.
I know you may be tempted to buy some dresses or anything else. But, don’t succumb to your desires and save that money in the designated bank account.
5. Slash your bank fees
$50-100 a year comes out to be $5-10/month
Have you ever paid attention to how much banks charge for maintaining our accounts? I know one of our bank charge $50 a year. It means something, even if it is a few dollars a month. But we must stick with this one because my husband doesn’t want to part with them.
I tried to talk to them, which has helped me slash some fees, but it is still there. Talk to your bank about how you feel your bank fee is too much.
If nothing works, tell them that you will change your bank. They will probably work out a plan and try to retain you as their customer. Big companies spend thousands on keeping customers.
Not only this, but you can also ask them what kind of perks they provide to loyal customers. I am sure you will be able to get a few, like lower account fees, gift cards, and discounts on insurance plans.
6. Cut your cable cord and internet
Save around 50 -100/month
Do you need subscriptions for cable? Most of us don’t even get time to watch TV. Then why bother and spend money on something which is not required? Ask yourself, do you need it?
If you cannot live without a cable, try to save on your subscription by slashing the price. Talk to your cable company and tell them you cannot pay the higher rate for cable. And it would be nice if they could slash the price.
If they refuse the first time, don’t hang up. Instead, ask them to connect to their supervisor. If nothing works, ask to be transferred to the cancellation department. They have the most power to give you solutions. They will do anything to retain you as a customer.
The same is true for internet companies. Try to slash the price or use your modem. This will help you save a good amount of money.
7. Cancel unused subscriptions to win the money-saving challenge
You can save $100-200/month
Unused subscriptions are of no use. If you have a magazine subscription, gym membership, or other memberships you never use, cancel them. If you cannot find time to use those subscriptions today, it is highly that you will not have time for them tomorrow.
Instead of keeping those memberships, use that money to save for the future. If you think you have no subscriptions, check your bank statements. I am sure you will be able to find some. Most of the time, we sign up for the contracts and then forget.
We never check again to cancel those subscriptions. Because of the automated system of these subscriptions, money goes every month. And if we miss the message from companies about renewal, the subscriptions renew automatically at the end of the year.
Canceling those can save you anywhere from $50- 100
8. Review your bills every few months
Again $100 per month
Make it a habit to review your bills every few months. Then, if you are getting huge bills, talk to your energy provider or switch to the less expensive one.
Before switching your energy provider, tell them your energy rates are too high, and you are being charged too much. Also, I cannot afford these rates. They will first tell you that they cannot do anything.
Again tell them that if they cannot do anything, you will switch your energy provider because another one is giving much cheaper rates. Finally, they will let you hold or ask them to let you talk with their manager.
I am sure something will work out, or you always have the option to switch to a new provider. We did this and were able to save around $50 a month. After changing the company, our energy bills are slashed by almost half.
21 tips to save money on energy bills
9. Earn money instead of spending
$200-300 per month
There are many ways to earn money in your spare time. Start surveys now, and you can make an extra $200-300/month. It is pretty good money if you want to save $5000 this year.
If you have spare time, you will spend it shopping or watching paid TV. Nothing is wrong with this, but we are here to accomplish the money-saving challenge. And, of course, on a tight budget.
Online shopping has made spending money so easy. But unfortunately, smartphones and apps for online shopping are a deadly combination. To save yourself from this, open survey sites on your phone.
Here are a few survey sites you can sign up to start doing surveys and earn money
10. Change your Mortgage provider
This can save you around $50/per month
As we all know, housing, whether a mortgage or renting, takes a big chunk of your income. So if you want to save money for yourself, it is in your best interest to buy a house you can afford. In addition, saving enough money for the down payment before purchasing a home saves a lot on the mortgage.
Or, if you have already made the big purchase, start looking for ways to lower your mortgage. First, check other companies and banks for their interest rates. If your interest rate is too high, talk to your bank. Even if you can get a lower interest rate by a few points, it will help you save some money.
For example, if your monthly installment is lower by $10, you will have $120 at the end of the year. We recently did this, and our monthly installment is lower by $150. It is a tremendous amount of money.
I assume that you can save anywhere between $50 to $ 100 per month on your mortgage.
11. Save $150 each month on groceries
Is it possible to save this much on groceries? Yes, my friend. You can save $150 on groceries without being cheap. You need to pay attention to your eating and buying habits.
Remember these few things, and be mindful of your grocery shopping
- Meal plan
- Make a strict grocery list
- Buy seasonal fruits and veggies
- Skip one week and don’t go grocery shopping. Cook from your fridge and pantry
Another tactic that works for me is if I ask my husband to do grocery shopping, he will only buy the stuff on the list. Even less than that as he could not find everything in the aisles of supermarkets.
11. Take home, cook lunch with you, and skip your coffee
If you are struggling to save money, try cooking your lunch home. If you buy your lunch every day, which costs you $10, it will cost you around $50 a week. If you cannot make your lunch daily, try to cook every other day. You will be able to save at least $30 a week.
Try to do the same with your coffee. If you love to buy coffee daily, try to skip it at least twice a week. You will save $8 each week.
A few dollars here and there don’t matter, but they add up in the long run. So, saving these few dollars here and there, I have created an emergency fund of $6800 in one year.
12. Check your debt
Check with your loan providers to lower your interest rates. It will save you a few dollars each month.
- Car loans: Write down how much you are shelling out for your car loan. If you own your car and don’t have any debt, be happy and leave this point.
- Credit cards: credit cards are an expense in their form. If you have credit card debt, try to pay them as soon as possible because the interest rate on credit card debt is enormous.
- Any other loans: Write down any other loans you have. Loans make a massive part of our lives. Paying attention to them and paying for everything on time saves a lot of money.
I am sure after working on all these things, and you will be able to find a good amount of money to save $5000/ year.
Save a set amount of money each week. If you cannot make it the previous week, compensate by saving more next week. Adjust your saving each week so that you will not fall behind. For example, you can start by saving 97 dollars each week. You can save $5044 at the end of 52 weeks.
Good luck with your saving challenge.