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Money Saving Plan: 13 Strategies to Save 5K - Financially Well Off
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money-saving-plan

Money Saving Plan: 13 Strategies to Save 5K

You’re probably looking for a secret strategy for saving money fast.

I hate to break it to you but no such strategy exists. The good news is that the faster you accept this, the faster you’ll create a money-saving plan to save your first $5,000.

Don’t think you’ve got what it takes?

Think again because I know you’re capable. At one point I had a negative net-worth and only a few hundred dollars in my savings account. Today, I have more than $5,000 saved up and feel confident about my financial future.

That’s why I’m confident you can do it too. I won’t share a generic list of 100+ ways to save money because that won’t help you. You’re a busy entrepreneur who’s only looking for the best of best strategies.

That’s why I’ve narrowed this list to 13 strategies. If you’re ready to save your first $5,000 keep reading.

1. Get clear on what’s necessary

When was the last time you’ve reviewed your subscriptions?

If it’s been more than a few weeks you may be paying for services you don’t need. Review your bank statement from the past 3–6 months and note recurring payments. Then on a separate document list your expenses and their amount.

Once you have this list note which ones are wants vs needs. For example, Netflix, Hulu, Amazon Prime are “wants”. Your cell phone and car insurance are “needs.” As you’re starting off, cancel one or two subscriptions from your “wants” section.

Canceling too many subscriptions at once won’t help. Since building new habits takes a few weeks you need patience.

2. Avoid fancy food as much as possible

It may not seem a lot at the moment, but spending $10+ each time you go to eat is taking a toll on your savings.

Data shows that the average American spends anywhere from $3,000-$6,000 dinings out each year.

But, you still need to eat. The best way to avoid eating out too often is by cooking your own meals. You don’t need to be a top chef, learn how to cook new recipes from online tutorials. If you currently eat out more than 2 times per week, slowly transition to eating home cooked meals.

3. Be a pro negotiator

Use a list that contains all your expenses and categorize them from largest to smallest. Call your service providers to negotiate a lower price. If you fail at negotiating, hang up and call again.

Repeat this process until you’ve negotiated your largest expenses. Companies like BillCutterz negotiate on your behalf but take a part of your savings. That’s why it’s best to for you to negotiate your bills.

Leverage the relationship you’ve had with your provider. I’d negotiated my cell phone noting I’d been a customer for years.

The result?

I’d received a $10 monthly discount and all it took was a 5-minute phone call.

4. Learn to be a bad spender

You can trim your expenses to the bone, have a high salary and sill be a financial mess.

How?

By having bad spending habits.

To avoid overspending make it inconvenient for yourself to do so. For example, if you have an Amazon Prime account, only store your debit card. This will at least prevent you from getting into further debt.

The reason this works is you’re forced to think about the items you’ll buy since you’d use disposable money. Take this a step further asking yourself if you’d feel happy  30 days after buying something. Using these methods will cut most irrational purchases.

Also, be diligent with what you read in your email box. Every day your inbox gets flooded with promotional emails. Unsubscribe from these emails to remove the temptation to buy things.

5. Be laser-focused on crushing debt

Wouldn’t it be nice to keep more of the money you earn?

Unfortunately, car loans and credit card debt is normal for most Americans. The average household credit card debt is $6,000. Having debt can impact the amount you’d be able to save.

An important factor in eliminating debt is to stop digging yourself further into it. Since you’re human you’re prone to make mistakes. That’s why you should automate as much of the debt-paying process as possible.

For example, schedule your recurring payments automatically each month. Then, use as much of this extra money to make principal payments towards your debt.

6. Stop trusting yourself to save

Have an automatic budget in place.

You can’t trust yourself to save money because you’ll always have reasons for why you should spend it. Automating my savings has been the key driver for being able to save thousands each year. But, you can’t just guess the amount you’d automatically save.

You need to be precise–that’s why you need to understand your spending patterns and cash flow. The perfect tool to help you do this is Personal Capital. Input your information and navigate to the Cashflow tab to view your income and expenses.

Decide how much you want to save and work backward from this.

7. Leverage powerful tools to track your expenses

If you’re using tools like Personal Capital or Mint, most of your financial data is being tracked.

But, you still need to review this data to make sense of this information. How else would you if you’re on track to reaching your financial goals?

Set a recurring reminder for each month to review your budget and note areas where you need to improve. Aside from reviewing your expenses, get into the habit to login into your bank account once per day.

This doesn’t need to be thorough and should last within 2–5 minutes. Your goal for logging into your bank account it to ensure that your finances are in good standing. You’ll catch bad spending patterns quicker if you review your finances daily.

8. Create your money-saving plan using a reliable budget

You need to limit how much you spend and save.

Otherwise, you’re blindly using your money. To get intentional you need to have a budget that’ll help you reach your goals. Here’s what a good budget will help you achieve:

  1. Saving money
  2. Pay off debt 
  3. Control your spending

More important, a value budget will help you use money in a way that’s fulfilling. It’s easy to get caught up with work, family, etc and spend your money unintentionally. A budget can help you spend your money on things you value while not going further into debt.

9. Focus on spending your money

Without goals, you’ll never achieve anything.

At best you leave it to chance to reach what you desire. That’s why you need to set clear financial goals. If you do you’ll stay focused and intentional with your money.

If not, your money gets used poorly.

Don’t believe me? Leave $20 in your wallet for a week or two and see what happens. Odds are that you’ll spend this money on something you didn’t plan for.

To avoid this from happening you need to think ahead with how you’ll want to spend your money. You already have the goal to save thousands of dollars, so use this as your north star. Take it a step further making this goal SMART.

For example, “I’d like to save $5,000 within 12 months to prepare for an emergency.” Now you’re specific and know why you’re saving this money. When obstacles come your way (because they will) you’ll be ready in overcoming them.

10. Grow your money utilizing the best account

Not all saving options are equal.

Save in the stock market and you’ll have a higher ROI (return on investment). Save in a regular savings account and you’ll earn anywhere from .01–2% in interest. So how do you choose your best option?

If you’re reading this article it’s because you’re looking to save your first $5,000. And, if you’re looking to save this money within a year or two, investing this in the stock market won’t do you any good.

Your best bet is to save this money in a savings account that yields the highest interest. Googling “top savings accounts” will show accounts paying the highest interest. Use Personal Capital to view your progress to stay motivated along the way.

11. Choose to grow your income

Most people spend their time and energy saving money and not growing their income.

Saving and managing your money is important. After all, without nailing this down you’ll never reach financial happiness. The problem is that there’s a limit to how much you can save money.

Once you have a good budget and are saving money it’s time to start earning more. Most people skip this step because it’s hard. But, because it’s hard it’ll be that much more rewarding once you do build new streams of revenue.

Starting a business is how many entrepreneurs I’ve interviewed achieved financial freedom. It’s not easy working extra hours after a long day from work, but possible when doing something you love.

If you enjoy garage sales, wake up early on Saturday’s to buy items you can flip for a higher price. If you enjoy building websites, build websites for small businesses on the weekends. Use any of the extra money you earn to pay off debt and save faster.

12. Track your progress to motivate yourself

Saving $5,000 will be hard.

Probably one of the hardest things you’ll do if you’ve never saved this amount. The good news is that once you save this much money you’ll be able to save more. To prepare yourself expect setbacks.

The truth is you’ll lose motivation along the way. At times you’ll want to quit and spend your money instead. Avoid quitting by reviewing your progress daily.

Write down your progress in a journal or use Personal Capital. Surround yourself with success stories. Find out what works for you.

If you know you’ll get discouraged watching your money grow slowly–review your balance once every 3–5 weeks. But, if you get motivated watching your progress daily, do this instead.

13. Hone your mindset to be a money-saving machine

Saving thousands of dollars happens before you save your first dollar.

But how?

Listen to Podcasts about others who’ve reached financial success and overcame financial setbacks. Read books about people overcoming obstacles. Learn more about how your mind works so that you can gain more control over yourself.

Be obsessed with becoming the best version of yourself.

When you do, nothing will hold you back. Saving $5,000 isn’t only about saving money, it’s about the person you’ll become through the process.

Be someone who can save thousands

Imagine saving $5,000 then $10,000 and more.

Most people never save this much because they blindly start saving without a plan. Saving $5,000 takes effort, sacrifice, and discipline. And if I was able to achieve this so can you.

Save as much as possible, then focus on growing your income. Listen to motivational Podcasts, read books, and surround yourself with like-minded people. Eventually, you’ll save thousands of dollars and earn a higher income.

Currently, you’re not the person who can save $5,000. But, little by little as you work on becoming better you’ll grow into this person. Someone who can save thousands of dollars earning a high income.

Are you gonna be like the rest and settle for average? Or are you gonna put in the work to become a money-making saving machine?

About the Author Chris

Chris writes personal finance and productivity articles for software companies. He gets fresh ideas through continuously investing in himself and interviewing successful entrepreneurs.

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