I was able to save over six figures in one year on $24,000 a year salary. Whether you’re looking to save $1,000, $10,000 or $100,000, it’s all relative and this article should help get you started and thinking about how you start saving as well.
How to save money fast?
Being able to save consistently means you are practicing some good money habits. You are living below your means and actively making decisions on being ahead financially.
To save 100k on a low income, will take a lot more then skipping out on your daily Starbucks (Venti Caramel crunch Frappuccino, with extra caramel, whip cream, ice, cinnamon dolce, 7 pumps of dark caramel sauce, extra caramel crunch, 1 pump of honey blend, heavy cream double blended).
If you are a higher income earner, then maybe it’s something closely related to your spending habits and trying to keep up with others. So everyone will have something uniquely tailored for their financial situation to reach his or her savings goal.
I’ll sum up every “How to save money fast” article in one sentence. If you want to save money, you have to spend less than you earn.
I’ll say it another way, you can either find out how to earn more, spend less or do a combination of both.
Mindset
Ill keep this short and sweet but I wanted to start out with mindset, because I had to drastically change my thinking about money and get focused on what I wanted to achieve. Saving money may feel like a sacrifice at first, and without the right mindset, all the steps that follow would be for nothing. To keep a positive and motivated mindset moving forward will require work and consistency. Do whatever is needed here to stay on track. You could:
- Create a savings goal.
- Write it on a board so you’re always reminded.
- Set up automatic transfers to your savings account.
- Find an accountability partner.
- Create milestones, and once achieved, celebrate! (Buuuuut in a way that’s not to the detriment of your savings account.)
So, now that you have your mind on your money and your money on your mind. Its time to get focused and take steps to reach our savings goal. One of the biggest catalysts to me saving 100k is our next step. In that is to…
Earn more
There are many ways you can earn more, even if you have a full-time job. I’ve made a lot of videos on side hustles and different business ideas that can get you there. If you could some how find a way to make some extra money, and put all that into a savings account, you would be well on your way to reaching your savings goal.
Back in 2018 I started flipping things I found around the house, to then sourcing inventory from garage sales, thrift stores, pawn shops. literally anywhere I could find good deals that I could flip on eBay. I reinvested all my profits back into inventory, and at the end of that same year I had grossed 500K. I was able to save 100K and everything else went back into the business to continue to scale and grow.
Here’s a quick story, that December, which is my wife’s and I anniversary, I placed the bank receipt in a jewelry box and handed it to her. Her thinking it was jewelry, but it was a receipt that showed our current balance. And she was in tears, see the thing is we haven’t had an easy life at all, so seeing that much money in the account was something neither of us had experienced growing up. It gave her so much relief and hope for the future, like a weight was lifted off her. In no way am I saying this to brag, in fact the exact opposite, I hope you see the humility and that it in some way motivates you in the same way.
Finding a way to earn more absolutely was a huge reason I hit my savings goal, but there are other factors that helped get me there which ill get to shortly.
Here are some ways you can earn more:
- Flip things online
- Go on freelancer sites like Fiverr and Upwork and make a gig on services you can offer. So if you’re good at excel, design, writing, customer service, or anything at all. You can post that on these sites and get paid for your work.
- You can be a virtual assistant
- You can do online or mobile notaries
- Uber or door dash which I’m sure you’ve heard 1000 times.
Earning more is a great way to start saving faster but this would not have been as effective to me if I wasn’t living below my means.
If I wasn’t living well below my means, then I wouldn’t have been able to save as fast as I did. The combination of living below your means in conjunction with earning more is the perfect set up for you to save money fast.
So how can you live below your means?
Well the first thing I would do I export your credit and debit statement from my bank for the last 3 months. It should be in a CSV or excel format. I would then sort it and identify some reoccurring expenses that I’m constantly doing and see where I can cut off some excess fat.
This isn’t exciting but it is necessary.
Also, living below your means will result in you having you to avoid impulse shopping, making a weekly budget and constantly tracking your spending. You may need to take your lunch to work and plan your meals for the week.
Once I trimmed off all the unnecessary expenses, I tracked how much extra money I had left each month. For me it was like $400 back then. Once I knew the amount of excess funds, I had each month and matched that with my savings goal, I realized that I had to take some drastic steps to reach MY personal goals.
Yours may be much different than mine, you may want to save $1000 or $10,000. If that’s the case, then maybe lowering your expenses and living below your means will help you reach your savings goals alone.
Now that you have control of your expenses and live below your means, there is one other thing I would do with your excess money instead of saving it, and that paying off any high interest debt.
Lower existing high interest debt
Paying off your debt, is never fun. But getting this out the way first is important.
With a high-interest debt, most of your monthly minimum payment goes toward interest. If you have some lower interest debt, you could pay the minimum on that and place all the excess funds on the higher interest rate debt. Once that’s paid off, you can move on to the next highest interest rate debt you have and so on. I think they call this the avalanche method.
You’re basically throwing money away with high interest debt when all you do is pay the minimum balance. For example, if you have a $10,000 loan at 7%, and you paid $200 a month, you’d be able to pay off your debt in 5 years. By simply adding $40 bucks to each monthly payment, you would reduce the length of the loan to 4 years.
If your loan is high interest and for a significant amount, I would consider:
A REFINANCING LOAN
There are companies that will offer you a loan to pay off your current debt and in turn offer you a much lower rate. This can help you save a lot more money, lower your interest rate and have a set time frame on when the loan will be paid off.
The money you will free up will help allow you to save more and pay off less in interest.
Once you’ve got a good handle on your debt, stay in the right mindset, and learned how either earn more, live below your means or both. The you can start putting your money to work by investing it.
Invest to Save more:
Investing your excess capital to go out and brings back some of their friends is once of the greatest ways to increase your overall financial goals. When I scaled my business that first year, I had to re-invest all those profits back into the business to make it grow the way it did. If I didn’t do that, and instead bought a car or went on trips then I wouldn’t have been able to hit my 100K savings goal in a year.
You can invest in many ways, and instead of having a large sum of money just sitting in a bank account to be eating by inflation, it is better to invest it.
Here are some investment vehicles that you can look into:
- Invest in an index fund, Stocks and dividends.
- Lend your money out.
- Buy real estate using leverage.
- buy some land and either flip it or make money on it passively.
- flip things online (buy and sell for more)
- start a business or a side hustle.
You can also invest in yourself and self-growth with books and take courses and grow your knowledge. This will help open your mind and uncover ideas that you may have not even known about before.
At the end of the day, you will either need to spend less or earn more but doing both is the main reason I have reached saving over six figures in one year. If you are thinking about earning more, but want the convenience of doing it online from the comfort of your home, then I would check out this video on how to make money online.
