If you’re new to the savings world…WELCOME! You’re in the right place! Saving money has so many benefits – from reducing stress to allowing you to reach goals you never thought possible. As if those reasons alone aren’t good enough, check out the article 11 Ways Saving Money Can Impact Your Life.
While it’s no secret that saving money can have huge benefits, it’s not always easy to get started. If you’ve been struggling to reach the 4-figure mark with your savings, then I want to help get you over the hump! Keep reading for 5 steps to save up your first $1000. Here’s to your first $1000, and many more after!
5 Steps to Save Your First $1000
#1 Review and adjust your budget
Trying to reach your first $1000 in savings? Start by reviewing your budget and adjusting it where necessary. When looking at your budget, you want to pinpoint what you can afford to save currently. From there, you can gauge how long it will take you to save up $1000.
For example, if your budget says that you can afford to save $100/month, that means you’ll be able to save $1000 in ten months. How do you feel about that? Are you comfortable with that timeframe? If not, you can start identifying spending areas to cut back.
When looking to reduce your budget category spending, I recommend starting with the discretionary categories. Things like going out to eat, salon visits, and shopping. Since most of the time these are non-essentials, they can be the first to get cut back. Imagine if you were able to cut back $100/month. Combine that with your current $100/month savings and you’ll reach your $1000 goal in 5 months!
#2 Be strategic with where you place your savings
When it comes to saving money, you have a variety of options. You can stick cash in an envelope. You can keep your money in a savings account linked to your checking. You can save in a high-yield savings account. The point is to be strategic with where you place your savings.
If you constantly spend money in your account, consider saving cash. If you have a bad habit of transferring money from savings into checking, put your savings in an account at a different bank. Know yourself and put yourself in a position to succeed by strategically saving in places that won’t hinder your progress.
#3 Set up direct deposit or automatic savings transfers
I’m a firm believer in “paying yourself first”. Basically, your money should be saved before you have a chance to spend it. One of the best ways to do that is by having a portion of your paycheck direct deposited into your savings account. Make sure you only put what you can afford to save into that account. There’s nothing worse than direct depositing too much, only to constantly tap into that money.
Another option is to set up automatic savings transfers. Finding a regular cadence for your savings can be based off your budget or pay schedule. Every time you get paid, an automatic transfer from checking to savings can take place. This is a great way to take the manual aspect out of saving. It also helps promote an “out of sight, out of mind” experience. Once the money leaves your checking account, you don’t even think about spending it!
#4 Get creative with how you can save
Saving your first $1000 can be exciting. It’s a great challenge to see what you’re capable of. Make it fun by getting creative with different ways you can save – even if they’re temporary. If your budget is tight, maybe cutbacks aren’t the way to go. However, you can scour through your house and find things to list for sale. Once you make a sale, you save the money.
You can also do a spending fast. For a specific period, the only money you spend is on necessities. Anything extra is saved. I did a spending fast early on in my financial journey and it made all the difference when kick-starting my savings efforts. It also made me realize I was spending much more money than I needed to.
#5 Don’t touch your savings unless you absolutely have no choice
If you’re serious about saving your first $1000, or any savings for that matter, make sure you never touch it. Now, there’s a stipulation. If you truly need the money for an emergency, or if you’ve reached the goal that now requires that savings, you can touch it. Any other reason just won’t cut it.
You don’t want to blow all your hard work by pulling your savings out and spending it on something you don’t even need. Trust me, you’ll feel bad if you do that. Instead, keep your money in a place that makes it harder to get to. Also, be okay with practicing self-discipline. It’s not always easy, but it’s a necessary ingredient for becoming a successful saver long-term.
Once you hit your first $1000, it’s so much easier to hit future thousands. Eventually, you’ll work your way up to the $10,000 goal mark! Remember, anything worth having is worth working for. If it were easy, everyone would be saving-money experts! How did you save up your first $1000? How did it make you feel? Drop a comment below to share!