After graduation, I lived paycheck to paycheck for a long time. A single car repair, or a bout of the flu, and I’d have no way to cover it other than use a credit card and rack up debt. It was exhausting, scary, and kept me up at night. And, many others are like me; most Americans can’t cover a $400 emergency, let alone a major crisis.
Fed up with always scraping by, I developed a strategy to finally put money in the bank. I set a goal of saving $5,000 in one year — or about $417 per month — and accomplished it ahead of schedule. I didn’t do anything special, and you can use the same approach to save $5,000, too.
10 Ways to Save Money This Year
You can save $5,000 in one year with a combination of cutting corners and boosting your income. Here are 10 ideas to get you started:
1. Earn Money for Routine Purchases
One of the easiest ways to make money without putting in extra effort is using apps that reward you for shopping. Sites like eBates and SwagBucks give you cash back whenever you make a purchase with a qualifying store. I signed up with eBates and earned $500 in one year from just buying essentials, like laundry detergent, shampoo, or cleaning supplies.
2. Consolidate Your Debt
If you’re like me and turned to credit cards to make ends meet, one way to save money is by consolidating your debt with a personal loan. With a personal loan, you get a fixed repayment term and a set monthly payment. You can often get a lower interest rate than you’d get with a credit card, so consolidating can help you save money over the length of your repayment or even help you get a lower monthly payment.
For me, consolidating my debt helped pay off my debt a year ahead of schedule. Because I paid it off early, I saved $1,000 in interest charges.
3. Open a New Bank Account
Some banks offer cash bonuses if you open a new account. For example, Chase offers new checking customers $300 when you open an account and set up direct deposit. A new account can give you a fresh start and the bonus can be a good incentive to stay on track.
4. Get a New Credit Card
Similarly, many credit card companies offer cash incentives or promotional offers if you apply for a new card. For example, the Blue Cash Preferred® Card from American Express gives you $300 as a statement credit if you spend $3,000 in purchases on your new Card within the first 6 months.
There’s no need to go into debt to earn the signup bonus. Simply use the card for routine expenses, such as utilities, internet, groceries, and gas.
5. Automate Savings
While setting up an automatic transfer to savings every pay period is ideal, it’s not always possible if you’re on a tight budget. Instead, consider signing up for an app like Chime.
The Chime app syncs to your bank accounts. Whenever you make a purchase, it rounds up the total to the next dollar and deposits the difference into your savings account. For example, if you buy groceries and your total at the register is $49.80, Chime will round it up to $50 and deposit the extra $0.20 to your bank account. Those little amounts can add up over time. By the end of the year, you could have hundreds in savings without noticing it.
6. Rent out Extra Storage Space
If you have an extra closet, garage, or basement space, you can turn that storage area into cash. With sites like Neighbor, you can earn up to $1500 a year renting out your extra space.
7. Sell Your Clutter
Most people have hundreds, or even thousands, of unused clutter in their homes; I was no different. By selling old childhood toys, books, and movies, I made $800 on eBay.
8. Pick up a Side Hustle
If making more money at your full-time job isn’t an option, consider picking up a side hustle. Side hustles allow you to work on your own schedule, and you can take time off whenever you want.
There are hundreds of side hustles you can do, from walking dogs to making deliveries. Some pay as much as $20 per hour.
9. Sell Your Hair
Although it’s not a strategy for everyone, cutting your hair can help kickstart your savings. If you have long hair — long enough to get at least 10 inches from a cut — and it’s healthy, you could sell it for hundreds on sites like HairSellOn. Uncolored hair that hasn’t experienced heat damage will get the highest prices. One woman with long auburn hair sold her locks for over $500.
10. Cut Your Subscriptions
I love monthly subscriptions, from Netflix to beauty boxes, but all of those little indulgences can add up.
Scan your bank accounts and credit card statements for recurring charges like streaming services, gym memberships, or music. By canceling them and depositing the money you spent on them in savings, you can save a significant chunk of change.
When I canceled my gym membership and Netflix subscription, I was able to save $60 per month.
Here are some additional ideas to help you save money:
- Switch to a cheaper phone
- Shop with discounted gift cards
- Skip bottled water
- Negotiate your cable and internet bills
- Move to a cheaper place
- Get a roommate
- Let strangers use your home
- Lease out your parking space
- Sell your photos
- Work a part-time job
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