Sounds impossible doesn’t it – saving £20,000 in a year. But it can be done. It’ll take commitment and you’ll need to be willing to cut back on things. But if you put in the effort, you’ll get the reward. Just think what you could do with £20,000 in savings.
So, want to save £20,000 in one year? Read on to find out how.
1. Change Your Spending Habits
Do you know where every penny of your money goes, or do you just keep spending until your money runs out? The first step in saving any money is knowing how much you’ve got coming in and going out.
Have a look through past bank statements to see what you’ve been spending your money on. You’ll be surprised at how much unnecessary spending you do. But if you want to save £20,000 fast, you’re going to have to change your spending habits. Set yourself limits on how much you spend on things like food, clothes and going out, then stick to them.
If you find it hard not to spend money when you’re out, leave your card at home. Only take the cash you need when you go out, so you aren’t tempted to spend more. Sticking to your budget might be hard to begin with but when you see your savings grow it’ll be worth it.
2. Reduce Your Biggest Expense – Your Rent or Mortgage
If you’re paying rent or a mortgage, a big chunk of your money gets eaten up by this every month. That’s why, to help your savings, find ways of paying less towards this.
Do you have to live where you are, or could you move to something smaller in a cheaper area? Or consider moving in with your parents for 6 to 12 months. Doing this could save you hundreds of pounds each month.
If moving out isn’t an option is there a room, you could rent out? Even turning your lounge into a bedroom could earn you money short term.
3. Use Your Skills and Get a Side Hustle
There are things you’re good at that can help you earn some extra money on the side. You can improve your skills with free online learning. Then you can create your own small business selling what you’re good at.
A quick and easy way to bring in extra cash is to sell stuff you don’t use. You’re bound to have clothes, shoes or bits of furniture you don’t want anymore that could be sold. Once you’ve got to grips with online selling, maybe try buying things that you know you could resell for more.
There are other options too like working in a bar or a shop part time. Whatever you earn from your side hustle put straight into savings. Every extra penny that you earn is getting you closer to your financial goal.
4. Pay Off Your Debts
Go all out to pay off your debts as soon as you can. The interest you pay on loans and credit cards could be going into your savings pot instead.
Find ways of paying less interest by switching your balance over to a credit card that’ll charge 0% interest. If you do this, don’t reduce what you’re paying back each month. If you can, pay back more. The quicker you’re debt free, the quicker you can build your savings.
5. Save Every Penny
Make saving money a way of life. Take on some of these saving tips:
- Be on the lookout for discount vouchers, food offers and ways you can save money on what you buy.
- Plan what you’re going to eat each week and do one weekly shop. Prepare your meals and snacks in advance so you don’t end up buying fast food.
- At the end of every day put any change you’ve got left into a jar.
- Set up an app that keeps a check on how you spend and that helps you save. There are some that’ll round up any spending you do to the nearest pound. They then put that difference into savings for you. So, if you spend £2.40 on something, it’ll automatically put 60p into a savings account for you.
- Set up a standing order to pay some of your income straight into a savings account. Set it up to come out on the day you get paid, so you don’t have to think about it.
- Pay less for your phone and streaming services. You don’t need to upgrade your phone, get a sim only contract on the one you’ve got instead. You don’t need Sky and Netflix or all the other streaming apps. For 12 months, go without. Or choose one and get your monthly subscription reduced.
In Summary
If you want to save £20,000 in 12 months, you’ve got to get serious about how you spend your money. Think of it as giving up a few things to help you reach your goal. By getting yourself into a routine of saving, you’ll soon realise that you don’t miss things you used to buy. The bonus of doing this is that, even if you don’t quite get to £20,000, you’ll have a lot more in savings than you do now. And you’ll be giving yourself great new spending habits that’ll last a lifetime.
Disclaimer: We are not providing financial advice, these are just tips for informational purposes.
