How To Save $5000 in a Year: 2024 Savings Challenge

Looking to save $5000 this year? Me too. Let’s face it, we could all use some extra money, especially with the financial climate these days.

Prices are climbing everywhere and yet our salaries may remain the same. So one of the best ways you can get ahead is to start a savings challenge. So, I invite you to join me and save $5000 this year.

Reasons to Save $5000

Having a good reason to save is the most important piece when it comes to being successful in your savings challenge. Your financial goals (reason) must be a strong motivator, otherwise, you’re likely to fall off the savings wagon.

So, think about why saving $5000 this year is a must for you.

Here are some reasons to save…

• Pay down credit card debt
• For your wedding
• Buy a car
• Have an emergency fund (for that rainy day)
• For a down payment on a house
• For your kid’s education (or yours)
• Reduce financial stress
• Have financial security
• For vacation
• Retirement
• Renovations

Have other savings goals? Share in the comments section below!

First Step: Set A Savings Goal

How much money do you need to save to reach your $5000 goal? Let’s break it down.

To save $5000 in a year that’s…

• $416.67 per month
• $96.15 per week
• $13.70 a day

When you break down what $5000 looks like it becomes much easier to create a savings plan to reach your goal in a year.

Next, Set Up A Savings Account

Make sure to set up a savings account solely for this savings goal. Many banks allow you to name the account, so I recommend calling the account the name of your savings goal, i.e. house, wedding, debt repayment, etc.

This way you can deposit money into your bank account every week or on each payday – and it’s going directly to this goal.

You can also set up an automatic deposit.

How to Save $5000 in a Year: 6 Strategies To Reach Your Savings Goal

Here are my favorite strategies to help you complete this 52-week money challenge.

1. Reduce Daily Expenses

The things we buy on a daily basis may seem small, however, they can quickly add up to significant savings over time. 

Here are some simple ways you can eliminate or reduce your daily expenses:

Coffee

• Stop buying coffee out – make it at home instead
• If you like fancy coffees that cost $5+ go for simple drip coffee as an alternative
• Bring coffee with you when you’re on the road or at work.

Bring Your Lunch to Work

Eating lunch out can easily cost $5 a day (minimum), which can add up to at least $125 a month. So, bring a packaged lunch instead.

Walk or Take Public Transportation

Did you know the average person in the US spends $179 on gas each month? That’s $2168 per year.

Letting your car take a break once in a while is a great way to cut down on your weekly and monthly expenses. 

If you have to run some local errands, consider walking instead of jumping in the car. Your overall health will thank you for this too.

Also, if you have access to good public transportation you could even sell your car – especially if you live in a city and don’t drive it often. With the money you make from the car sale and the saved gas money, you’ve already saved well over $5000.

2. Decrease Weekly Expenses

Bring snacks with you

Having snacks on hand means you’re covered if you become hungry when out. You can eat your affordable/healthy snacks without having to buy expensive food.

Eliminate Take Out and Delivery Services

If you get takeout and delivery every week this is a BIG money suck. Just reducing or eliminating this alone can get you to your $96/week savings goal, especially if you are buying takeout for the whole family.

Instead, get in the habit of meal prepping on the weekend so it’s easy to put dinner together at the end of a long day. 

Redo Your Food Budget

Food is expensive and most items have increased significantly at the grocery store, with the highest prices in the meat and processed fruit and veg categories (source).

To reduce your food budget opt for whole fruits, vegetables, and whole grains with more affordable protein sources like beans, and lentils. Also, reduce meat and processed foods which are more expensive than other healthy options.

Also, make sure to bring a shopping list with you, and don’t buy anything off the list.

3. Reduce Monthly Expenses

Decreasing your monthly bills goes a long way to saving that extra money. Here are some little things you can consider to make this happen.

Cancel Streaming Services

Have a streaming service you don’t love or rarely use? Then cancel it! There’s no need to spend money on things you don’t need.

You can also use just one streaming service at a time, which a good friend of mine does.

• Subscribe to Netflix for a month, watch everything you want – then cancel.
• Then you can try Disney or another service for a month.
• The key: Don’t pay for more than one streaming service at a time.

Workout at Home 

Try working out at home instead of the gym. There are great YouTube videos you can work out to and free apps. You can also spend time exercising outside.

If you need that social setting to work out you can still exercise with a friend – just make the plans.

If you love going to the gym, consider finding a more affordable gym membership or even ask your gym if they have any deals that you can sign up for.

Do a subscription and membership audit

If you haven’t looked at what monthly subscriptions you have now is the time to do an audit. Log into your bank account and see where your money is going.

You may have signed up for a 7-day free trial months ago and forgotten to cancel – and you haven’t even realized that $24 is coming out of your account every month.

Now you can cancel subscriptions you don’t need in your life. This alone can help you save a good chunk of money.

Cut Your Cable

Cable packages are extortionate these days so ask yourself – how many cable channels do you actually watch? Now might be the time to eliminate this expense altogether.

4. Increase Your Monthly Income 

Look for a New Job

The easiest way to make extra money is by leaving your current company and starting somewhere new. I don’t love that this is the case, but it’s reality. When you start a new job you can reinvent yourself and also state your higher salary expectations. 

Get A Promotion

If you work at a company that supports internal growth, take advantage of this and tell your boss that you want to work towards a promotion this year. 

Simply stating this can start you on the right path toward reaching this career goal.

Tip: Ask your boss for an action plan to reach this goal. If they are hesitant to do this, that’s a great indicator that looking for a new job is the better option.

Start a Side Hustle

There are so many ways to make money these days.

Have a laptop? You can… 

• Start a blog. I started blogging 7 years ago and it can be a great way to make some extra cash. Sign up for my free blogging course to get started.
• Open an Etsy store – perfect for you crafty folks out there (digital products, gifts, jewelry, artwork and so much more)
• Sign up to UserTesting.com – I did this a few years back and it’s a really interesting way to make extra cash. On average you can easily make $100+ a month and even more if you stick to it. All you need to do is give feedback on an online product or service and you can get paid $10 for each test you do.
• Upcycle Furniture – Buy stuff on local marketplaces, spruce up the items, and sell for a profit. Sometimes all you need to do is take better photos of the products to get an increased price. Win/win!

Related: 30+ Winter Side Hustles To Make Extra Money

Sell Stuff You No Longer Need

Get on Facebook MarketPlace/CraigsList/Nextdoor and sell your unwanted stuff. I recently sold a golf bag for $100 and it was the easiest $100 ever. So simple.

If you have a lot of things then take some photos and post them to sell locally. Just think, if you sell $100/month – that’s already $1200 towards your $5000 savings goal.

Get A Part-Time Job

It’s so much easier to get a part-time job these days, as there are many things you can do remotely from home (customer support, admin, accounting, etc). 

You can also easily sign up as a food delivery driver to increase your monthly income.

5. Do A No Spend Challenge

This means spending money on only the essentials while cutting everything else out. You can easily do this for a month at a time a couple of times this year to reach your specific goal. Just make sure to put these savings directly into your allocated savings account.

Learn more about my no-spend challenge and what I did to save money to travel for a full year! 

6. Set Up Auto Deposit

I mentioned this briefly above but it’s worth calling out again, as an automatic savings account alone can be all you need to reach your $5000 savings goal.

If you think you can easily afford the $416 per month, go ahead and set this up as an auto deposit. You can schedule automatic transfers on payday every week, biweekly, or monthly.

Just doing this means you won’t be tempted to spend the extra money on frivolous things and by the end of the year you will easily get to your goal.

High-Yield Savings Accounts

Also, look into high-interest savings accounts which will help your savings grow even more. Again this may look like small increases at first, but as your money grows your interest payments will too. 

Tip: Many banks have promotions where their interest rates will increase for a given period, on all new deposits. Make sure to keep track of promotions to take advantage of this.

How To Save $5000 in a Year: Final Thoughts

As you begin this money-saving challenge you’ll discover how easy it is to positively change your spending habits over time. 

You’ll find that this new way of living will become more natural to you, which in turn will help you keep saving toward even bigger goals over the long term.

When you’re putting together a plan on how to save $5000 this year, just remember, small changes lead to big savings.

Here’s to a great year ahead of financial independence and overall success!

Related Money Saving Resources:

• 50 Things To Stop Buying To Save Money
• 8 Tips To Do A Successful No-Spend Challenge
• 40 Cheapest Groceries To Buy on a Tight Budget