- Many people are outlining savings goals for the upcoming year.
- Review your finances and set up a budget to get on your way to saving more.
- Whittling down spending while increasing your income will make saving easier.
It's not impossible to save an extra $5,000 if you follow these steps.
Could having an extra $5,000 in your bank account improve your life? For many Americans, an additional $5,000 would significantly impact their lives. With extra money saved, reaching your personal finance goals can be easier.
If you're struggling to save extra money, we have suggestions to help you make your savings goals a reality. Follow these steps to save an additional $5,000 in 2023.
1. Review your finances
Before you begin setting aside extra money, reviewing your current financial situation is a good idea. It'll be challenging to make changes if you don't know what habits you need to break.
The first thing you'll want to do is figure out how much money you have coming in and how much you're spending every month. If you're spending less money than you bring in, you're in a good place and likely already have extra funds to save. If you're spending more than you make, you'll need to adjust your spending habits to free up extra income for your savings goals.
2. Eliminate unnecessary spending
Now that you know where your finances stand, you can determine which unnecessary purchases you should eliminate to spend less money each month.
Many people overspend on takeout, entertainment, and shopping purchases. Determine what habits you need to break and commit to making changes for your financial benefit.
3. Get budgeting
Having a budget can make it easier to hold yourself accountable as you make spending decisions. Now is an excellent time to start budgeting.
Set spending limits for various purchase categories and track your spending throughout the month to ensure you make purchase decisions that align with your goals. Budgeting apps can simplify the budgeting process. With time, following a budget will become a habit.
4. Find ways to increase your income
If you're already living paycheck to paycheck, it likely feels impossible to save extra money. If you find yourself in this situation, it may be time to boost your income so you can save more. Here are a few ways to increase your income:
- Get a side hustle or part-time job.
- Declutter and sell extra items lying around your house.
- Ask for a raise or promotion.
- Apply for better-paying jobs while you continue to work your current job.
Once you bring in more income, it'll be easier to contribute more money to savings.
5. Automate the savings process
Once you've made the necessary changes needed to free up extra income to save, it's recommended that you automate your savings contributions. Otherwise, you may forget and spend all of your money.
Once you set up automatic transfers through your bank, your savings will be automated -- so you no longer have to worry about forgetting to set aside extra money. You can decide how often money is transferred from your checking account to your savings account.
If your goal is to save an extra $5,000 in 2023, here's the breakdown of how to make that happen:
- Save $96.16 every week.
- Save $192.31 every two weeks.
- Save $416.67 every month.
- Save $1,250 every quarter.
If you have a savings goal for 2023, you're not alone! Now is the time to begin planning for the year ahead. If you're open to making changes, you can reach your savings goals. And be sure to review our list of best high-yield savings accounts if you're in the market for a new savings account.
Our picks for 2024's best credit cards
Our experts carefully review the most popular offers and select those that are worthy of a spot in your wallet. These standout cards come with fantastic benefits like generous sign-up bonuses, long 0% intro APR periods, and robust rewards.
Click here to learn more about our recommended credit cards
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2024 The Ascent. All rights reserved.