How to Save $5000 in a Year: The Realistic Guide for SinglesSaving Money
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So you’re looking for advice on how to save $5000 in a year. You’ve come to the right place but, before we get into any details, I think congratulations are in order. In times when, according to Debt.com, 19% of adults have no emergency savings, and 31% have less than $500 in their emergency fund, your goal suggests responsibility.
Whether you want to save $5k for a car, a home down payment, a home remodeling, or a vacation to remember, there are many solutions you can try.
They fall into two major categories:
- The money-saving solutions most Americans adopt: cutting down expenses by giving up some things or settling for less.
- The Money Done Right solutions: namely smart shopping and saving.
We’ll detail both in the following lines.
Common Money-Saving Solutions Employed by U.S. Adults
Here are the most popular money-saving solutions among Americans, according to statistics:
- Purchasing generic brands (55%)
- Packing lunch instead of buying it (45%)
- Fewer hairdresser/stylist/barber visits (38%)
- Refillable water bottles instead of bottled water (36%)
- Downgrading or canceling cable subscription (34%)
- Giving up the landline phone service and using only the cell phone (28%)
- Canceling magazine and newspaper subscription (24%)
- Giving up purchasing their morning coffee (24%)
- Changing or canceling the cell phone service (20%)
- Using dry cleaning services less (20%)
It makes sense to cut down some expenses when you notice that they eat up most of your money, but will that help you save the $5k you need? I honestly doubt it.
Pro Tip: In my experience, and I’ve seen enough cases to know that I’m right, cutting down on certain expenses works only temporarily and when you have no other solution.
For example, if you were on the verge of foreclosure and you needed a few hundred dollars or a couple of thousands at most, it would probably work, especially with a spouse and kids to worry about.
Good to Know: When you’re single and your goal is to put money aside, it can’t work. It would mean sacrificing your small pleasures, like designer clothes, your morning coffee, lunch with your co-workers, a favorite movie or TV show, etc.
- Just imagine starting your day without your favorite coffee, eating at work when your colleagues have lunch in your favorite fast food or restaurant, coming back from home with no cable, no cell phone service, etc.
- You’ll miss the things you sacrificed and you’ll eventually give in. Not only will you stop saving money but chances are you’ll spend any money you already saved.
- Don’t worry, though. Just because these ideas on how to save $5k don’t work it doesn’t mean you can’t do it – you still have my approach.
How to Save $5000 in a Year Without Sacrifices
I’m willing to bet that, at the moment, you do your shopping in your favorite and local online stores without worrying about finding the best deal or getting back some of the money you spend.
You’re surely missing out on quite a few fun ways to make money, maybe even at work, and you’re not too good at long-term budgeting either.
Well, I think all these need to change, and, trust me, it’s easier and much funnier than you think. Here are my ideas on how to save $5000 in a year:
1. Start Using Digit to Manage Your Finances and Pursue Your Savings Goal
- You have to love an app that, once installed, analyzes your spending habits and finds ways to save you money without requiring sacrifices from you or messing up your budget.
- You basically move on with your life while small amounts of money build up in your account getting you closer to your goal.
- You can actually set saving goals with Digit and monitor your progress. You will surely enjoy seeing your dreams come true without too much effort.
2. Buy Your Designer Clothes Cheap
As mentioned above, I don’t believe in making sacrifices. I do believe in getting the stuff you want and need at much lower prices. So, if you like designer clothes, I don’t expect you to give them up. Of course, continuing to pay the same money on them won’t help your goal, so I have an alternative solution: learn to buy them cheap.
Good to Know: Just as you ended up reading this post to learn how to save $5000 in a year, others did it to learn how to buy their designer clothes cheap. We wrote a very effective guide for them, and I suggest you start following it too.
Pro Tip: If you want to know more about how you can save while still purchasing your favorite brands, read this to discover our 5 unbeatable ways to buy cheap designer clothes online.
3. Buy Some Home Items in Bulk
I know, buying in bulk is not exactly easy when you’re on a budget and trying to save $5k. However, it is doable and it can save you a great deal of money in the long run. No one expects you to buy vegetables or meat in bulk, but there are many other items you should not even consider buying otherwise.
Good to Know: Think detergents, personal hygiene products, toilet paper, coffee, wipes, underwear, batteries, pet food, and more. The next time you go shopping, when picking up a product from the shelf, check out the multipack and bulk prices to see how much money you could save.
Pro Tip: As for the products you should buy in bulk, you know what you need better than anyone. Try preparing a shopping list in advance and, as you add items to it, ask yourself if it wouldn’t be better to buy them in bulk.
4. Negotiate Lower Bills and Cancel the Subscriptions You Don’t Need
Your utility bills probably eat up a considerable part of your income. Did you know that you can negotiate with your utilities providers to lower them? You should try it, or at least let others do it for you. After all, you’re looking for ideas on how to save $5000 in a year, and you probably pay more on your utility bills.
Pro Tip: I should be honest, here, and admit that I hate dealing with utility providers. You have to wait an eternity before getting in touch with a customer service representative, and they all seem programmed to sell you stuff or make you forget why you called in the first place. However, I’ve found a way to bypass this episode and still enjoy the savings. There are companies and apps out there that will negotiate and lower your bills for you. I’m not going to tell you which ones to use because that’s up to you to decide, but it seems only fair to give you a starting point.
- You should look into Cushion, BillShark and, my personal favorite, Cushion. The last one does much more than just helping you lower your bills.
It will monitor your spending habits to identify saving opportunities, helps you avoid bank fees, and, most importantly, cancels old, unused subscriptions.
5. Get Stuff for Free
Many people, myself included, go through life without realizing that there are ways to get stuff for free. I surely had no idea until I came across EverydayFamily. Sure, they give away baby stuff, so you won’t need them, but you can get many other products and samples for free if you know where to look.
Pro Tip: We have a quite comprehensive list ready for you. It contains around 41 items, so some of them will surely come in handy. Just remember to out the money you would spend on those items aside, as every dollar you save is one step closer to the $5k you are after. Check out our list of 41 freebies and where to get them here!
6. Pay Less on Transportation
I’m not going to tell you to use public transportation instead of driving or taking a cab, because I’m sure you’re aware of your options. However, there are many tricks you can use to lower your transportation costs, depending on your preferences.
Good to Know: If you prefer driving, check out the offers of Metromile and Root when renewing your auto insurance and use GetUpside to get cashback when fueling up your car. Also, did you know that you can make money delivering food with Postmates?
- If you usually travel by taxi, you’ll surely find Uber or Lyft cheaper and more comfortable. Their apps are extremely easy to use, and, if you want, you can join them and start earning more money.
7. Get Rid of the Stuff You No Longer Need
Just because you no longer need or use a product it doesn’t mean there’s no value in it. You surely have some old gadgets lying around in your home, some books, appliances, and even clothes. I advise you to give them a new life and, thus, earn some money that you can use to increase your savings.
Good to Know: Decluttr can help you get rid of the tech stuff. We also covered how you can sell the clothes that are still in good condition in this post. For the rest, you can always post ads online or organize a garage sale. The bottom line is that you’ll save space in your home and earn some money.
8. Use Best Buy Price Trackers and Coupons and Discounts When Doing Your Shopping
It doesn’t matter what you’re shopping for, you can save significant amounts if you take your time to compare prices and lookup and use coupons and discounts. Before you argue that you don’t have time for any of these solutions, keep in mind that there are now tools and browser extensions that do everything for you. For example:
- Avast SafePrice will track the product you’re looking for and lookup similar offers online, presenting you with the better-priced ones.
- Honey will lookup coupons, promo codes, and deals online, and let you apply them at checkout.
- Butterfly Saves is an option you’ll surely fall in love with, as it provides you with coupons for 50% discount at Walmart, Target, and other major retailers.
It should be easy to see how this solution saves you money: not only that you get the items you need at the best price available, but you lower that price even more with coupons and discount codes.
9. Use Cashback Apps and Websites
These are basically incentive or loyalty affiliates of the retailers they offer cashback for. They receive a commission for the sales and leads they drive to those retailers, and they pass on some of that money to their clients.
Good to Know: Perhaps you’re already using some cashback app or website, but you probably didn’t pay too much attention to it. You should, as you have the opportunity to get back up to 40% of the money you pay.
Moreover, you can receive cashback on both online and brick-and-mortar purchases.
- My favorite website for online shopping is Rakuten (formerly Ebates). For brick and mortar stores, I use Ibotta.
- If you sign up through the provided links, you’ll get a $10 bonus!
- Other solutions worth checking out are Shopkick and Drop for brick-and-mortar shopping. For online shopping, also try Dosh.
- Bonus Tip: If you shop on Amazon, check out these clever ways to save money on your purchases.
10. Get Paid to Go Shopping
Have you heard of the new app Shopkick.
It literally pays you to walk into stores! You don’t even have to buy anything — you will get paid simply for entering stores!
Of course, you will earn more points for actually making a purchase, but even if you’re just window shopping, you can still earn points.
11. Look into Cheap Ways to Have Fun
You need entertainment, and you shouldn’t give it up. After all, you need to get out, meet new people, and have fun. Just be careful how much money you spend. Better yet, look for solutions to make money while having fun.
There are quite a few out there, and I’ll mention the ones I use and like below:
- Long Game: with it, you can make money playing slots
- Mistplay: it pays you to play mobile games
- S’more: it pays you just for keeping it and letting it run ads on your smartphone’s screensaver
- Swagbucks: with it, you can earn money participating in surveys
- SweatCoin: you can earn money while you walk or exercise
- HealthyWage: it pays you to meet your weight loss goals
You have to admit these apps are a great way to make money. Just don’t forget that you’re looking for ideas on how to save $5,000 in a year and use the money you make to boost your savings.
12. Invest Safely
No, I don’t expect you to learn to trade stocks. You came here looking for ideas on how to save $5000 in a year and we’ll stick to that. Nowadays, investments are accessible to everyone, safe, and easy to make. All you need is a smart app like Worthy Bonds.
Advantage: It will round up your payments and invest those few cents for you. You won’t feel their absence, but your small investments will thrive and, slowly but surely, you’ll get closer to your goal to save $5k.
13. Get a Side Hustle
I know you don’t have too much time on your plate. However, you don’t really need that much time. There are many activities you can undertake in order to earn some money. We’ve detailed the easiest and most profitable of them here. Also, we have quite a few passive income ideas you can try detailed in this post.
Good to Know: By investing as little as one hour a day, you could earn serious money. Sure, you only wanted to learn how to save $5000 in one year but why stop at this when there are so many more things you can save for? Besides, one of these activities could appeal to you to the point where you decide to turn it into a side business. You would be gaining freedom in terms of time and money, and doing something you like.
- Just think of driving for Uber or Lyft, handling deliveries with Doordash, becoming an Airbnb host, blogging, starting a dropshipping business, doing voiceovers, tutoring others, or freelancing.
And there are so many ways to make money that it would be literally impossible not to find something to your liking.
Drawing the Line: Did My Advice on How to Save $k Help?
Indeed, it’s hard to believe that saving money can be this easy and does not require you giving up on the things you love. Well, it can be done, and now you know how. If you still have doubts, my method is easy to test.
All you have to do is take the saving methods above and calculate how much money each of them could save you in a year. I won’t go back to all of them, but the calculations are simple.
Basic Math or How I Know My Methods Will Help You Save $5k in One Year
- Minimum $1000/year from lowering your bills, canceling unused subscriptions, and by-passing bank fees (it’s less than $100/month, and Cushion alone can save that money for you)
- ~$2500/year from cashback apps, coupons, and refunds due to price increases (just calculate how much money you spend shopping every month, the 10% savings my methods guarantee, and multiply that by 12 months)
- Minimum $1500/year from money-making apps (how difficult can it be to play slots and Trivia, take surveys, walk, or run ads on your screen?
So you see, only three of my methods could be enough to teach you how to save $5000 in a year. You have 13 of them.
Wrapping It All Up
I’m sure that, as you try them, some of them will turn into long-term spending, saving, and earning habits, and I believe that’s a good thing. You’re young and resourceful, so it pays out to work hard to build the life you were dreaming of. Why turn your back on vacations, luxury items, comfort, and everything you could possibly want and need, when getting them is so easy?
But don’t take my word. Try the money-saving methods suggested above, do your math, let us know how it went, and answer this simple question:
Which saving method worked best for you and how much did you save?
I’m pretty sure the above ideas on how to save $5000 in a year will pay out for you, and I can’t wait to find out how it all went and what your next savings goal is.
Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.