Do you want a new saddle? Or need a downpayment for a new truck or house? Or have you been postponing starting an emergency fund? Are you a bit lost when it comes to saving money? If so, then saving up your first $1,000 will be extremely helpful. If you are already consistently saving for retirement and contributing to a savings account every month, then take this pat on the back and feel free to read something else. But most of you probably have a hard time being a consistent saver. Planning to save $1,000 can feel overwhelming, scary or impossible. But it isn’t! Even on a small income or with lots of payments due, there are little ways you can sock away more money into a savings account.
A quick side note about the importance of an emergency fund. Why would it matter to you? Well an emergency fund is a savings account that you consistently contribute to, so that you have money when a financial hardship comes your way. Financial emergencies happen to everyone, but it depends on how well you’ve planned – how quickly your finances can rebound. Possible unexpected expenses that may come your way are: an emergency vet bill, an unexpected large medical bill, your car breaks down, you get laid off, etc. I’m guessing at least one of these things has happened to you or a close relative. So what’s the difference between the people who are ruined by these events versus those who are able to pay for them and move on with their lives? Those who can more quickly recover and move on, planned ahead and saved up money in an emergency fund before they suddenly needed a large chunk of money.
Saving money is difficult. When you live paycheck to paycheck it’s hard to figure out where any extra money can come from. Sometimes living paycheck to paycheck is because of lifestyle choices, not just a result of circumstances. But a lot of you probably don’t live paycheck to paycheck but just don’t have the desire or discipline to save money. It’s easier to pretend that “someday” won’t come, and you won’t ever need your emergency fund.
It’s easy to be tempted into spending any money you have extra each month. We live in an instant gratification society – we can buy things so quickly and easily online and advertising is bombarding us everywhere. This makes it easy to overspend and buy things that you don’t actually need. You need to learn to save money so you are prepared for life’s unexpected expenses. Identifying where your money goes is the first step toward finding and keeping more of it. Check out my post about creating a budget if you aren’t sure where to start.
Let’s break down the process of saving $1,000 into steps that are simple to act upon.
1. Figure out where your money goes every month. Creating a list of EVERYTHING you buy in a month is really helpful toward understanding how your money vanishes so quickly. Are you spending way too much on new clothes you don’t actually need? Or do you buy coffee and lunch out every single day? Big spending habits can quickly eat away at your paychecks without even realizing what a waste of money it was.
2. Now that you have identified where your money goes, you need to figure out how you are going to save your first $1,000. Can you easily achieve this by not spending as much on useless purchases for a month or two? Or do you have an income problem? If you are already budgeting and taking care to keep track of your dollars; perhaps you simply don’t make enough money to get ahead. Ask for a raise at work (if you are a hard worker and do your job well) or start looking for a better job that would pay you more. If you like where you are or fear change, then perhaps adding in an additional income may help. This is commonly referred to as a side hustle. A side hustle is something you do in addition to your regular job so you can generate more income. Think about what you could do with an extra $500 a month!
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3. You need a plan. Will you make an extra income like we talked about in step 2, or will you spend less? Make a concrete timeline and set dollar savings amount goal. Will you save your first $1,000 in 3 months, 6 months etc? Or will you save $50 a month until you reach $1,000? It depends on how hard you want to work and how much money you really can set aside, and how quickly.
4. Find money you didn’t even know you could receive. A lot of people ignore easy money in their pocket because it would require a little bit of time or a semi awkward phone call. Here are several ways to find extra money you may be leaving in someone else’s pocket:
- Negotiate your internet cost. Internet service costs most people an average of $47 a month (Source:move.org) however, this number can vary widely based on what speed of internet you have. My internet costs $35 a month. I used to pay $28, but then it went up to a fixed rate of $45. Then I complained and they took $10 off a month for a year – so I’ll have to call and complain again in a year. But that 30 minutes on the phone saved me $120 over the course of a year. If you have nearby neighbors and don’t mind sharing, you could also split the cost of internet. Another easy way to save money on your internet costs are to buy an internet modem as opposed to renting one. If your monthly bill includes a line item for “modem rental” then you are giving the internet company at least an extra $80+ a year. Good internet modems can easily be purchased for $20-$100 online. I bought a used one on Ebay and it works great – it was $25 including shipping. Possible Savings = approx $160 a year or more!
- Cancel your cable, or at least negotiate the price down. The average cable bill in a US household is $100. I suggest ditching cable or satellite TV for the ease of online TV services if you must have TV. My husband loves football so we do subscribe to SlingTV during the football season, but can easily cancel it when we aren’t using it. Their plans start at just $15 a month! If you are set on having actual cable or satellite, you should call your TV provider and ask what the best deal they can give you is. If they say they don’t have anything better than threaten to cancel. You want to be transferred to their retention department. The representatives in the retention department will try to find the best deal to keep you paying every month. Possible Savings = approx $460 a year, or $1,200 a year if you can do without completely.
- Check your auto insurance coverage. Many people are overpaying on their auto insurance – some because they don’t shop around, and others because they don’t know what coverage they have vs what they need. For example, raising your deductible can mean a few hundred dollars of savings every year. Another is if you pay for AAA and roadside assistance with your auto insurance – check which one offers the most assistance for the least price. Many people are too lazy to shop around for auto insurance. Don’t be afraid to get quotes from all the auto insurance companies to see which gives you the best deal. Possible Savings = $100-$500+ a year
- Sell anything laying around that you do not use. People often overlook all the things in their house that they could sell to make money. For us horse people, tack we no longer use is a huge source of clutter + money that we could have in our pocket. I know that I have a few saddles that don’t even fit my horses! Part of the reason I keep them is sentimental, but I could sell them and make a little cash. Sell unused saddles, bridles, girths, horse clothes, riding clothes, barn equipment, etc and see how much money you can make. Look around inside your house as well and sell unused electronics, sports equipment, clothing, furniture and anything else you have that you don’t use! Ebay, Craigslist, Poshmark, and Facebook marketplace are all great places to sell your unused gear. Possible Money in your pocket = $100-$1,000++ (depends on what you have)
- Cancel your unused gym membership. Do you actually use your gym membership or are you just a once every week or two visitor? Gym memberships are expensive. I’d suggest using free online workouts, or doing a paid (but much less expensive than a gym) online service such as Beachbody on Demand. We started using BOD more than a year ago and it has been great – we can do workouts at home with simple equipment a few times a week and it is only $99 a year. Many gym memberships would cost that much per month! If you go to the gym multiple times a week and use the amenities that you pay for, then by all means keep your membership! But don’t keep paying if you never use it. Possible savings = approx. $500-600 in a year.
- Cancel your unused subscriptions. Do you actually watch Netflix? Do you use your Amazon Prime services? Do you subscribe to beauty boxes? Wine subscriptions? Magazine subscriptions? The possibilities are endless for subscriptions you may have. You may have forgotten how much these things cost you! They can really add up on a monthly basis. If you aren’t using it, or throw away half of the stuff you receive in a subscription box, then you should cancel the subscription. Possible savings = $5-$100+ a month
- Earn cash back on every purchase you make online. I use Ebates all the time for my online purchases. Ebates sends you an actual check for the % cash back you earn every quarter. I’ve been using it for a few years and have already made at least $450 from it! If you don’t want to use Ebates, I also suggest the shopping portion of Swagbucks. There are so many websites that offer cash back, that you should always check and use one of these sites before shopping online.
Just these simple changes from #4 would give you enough savings to have $1,000 or more within a year. Why wouldn’t you do these things regularly, even if you aren’t trying to save?! I negotiate the costs of these services as well as sell what I can every single year. Because these phone calls and canceling online are so simple, but you may just be too lazy to take care of things. Make a list of what you could do to save money or earn extra money. Think of it as a to do list to save money.
5.Set up automatic deposits for savings. It is human nature to think we should spend money if it’s easily accessible. Set up a separate savings account that has an automatic transfer so you don’t have access to money before it goes toward your savings. There are multiple bank accounts (SmartyPig, that allow for smaller sub accounts that you can choose to save for different goals. It can help to save each month toward costs that only come up occasionally – such as auto insurance, car registration fees, a new car, a downpayment on a house, horse shows, and anything else you may need to save up for.
Use these steps to save up $1,000 – as an emergency fund or for something you want/need to buy. It is easier to have a goal, a plan and a time frame to commit to. Commit to making saving money a priority in your budget every single month. Once you start saving, you can create a habit of saving each month. It’s always important to have money saving goals and to always work toward them. Life will throw you off your goals sometimes, but as long as you always get back on your plan – then you are doing a great job!
Now that you’ve saved your first $1,000 set a new goal and start saving up again. You should always be saving for something – retirement, house downpayment, a new horse, emergency fund, or whatever else you want! Having money saved will make the expected and unexpected much easier to handle.
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