How to save a thousand dollars a year
It is important to save or put money back because of unexpected things that life tends to throw at us. Some people might also want to save money for something they want to buy later on down the road such as a car or other item.
Given our circumstances though it can be really hard to put any kind of money into a savings account especially if you’re living paycheck to paycheck. You might be wondering what is a good amount to put in a savings account and how much money you should put into one each week or whatever frequency might work for you.
A financial guide that I’ve used in the past called Financial Peace University has said that $1,000 is a good amount to have in a savings account as it tends to cover a large amount of sudden emergencies that might come up such as vehicle troubles, maintenance issues for the house or sudden medical expenses. Now you don’t have to stop saving once you reach a thousand dollars, but that is good amount that you should always try to have in your savings account or at least build back up to.
Let’s take a closer look now on how to save a thousand dollars a year. Now it doesn’t necessarily have to take you a year to save that amount, but if budgets are tight then there is a good method to where you can save a certain amount to reach the $1,000 goal.
How much money to put back Each week
As I said above, I know that budgets can be tight and it can be difficult to put any money into a savings account, but I believe that there is a minimum that should be put back each week to save up to your emergency savings account of a thousand dollars.
I put back $25 dollars every week. I don’t have to drive to my bank or set up anything there to do this though that is always an option. I’ve mentioned before that I have an online savings account. I did a recent review of the one I use which is Capital One 360.
I really like using it because it gives me peace of mind and because it takes 2-3 business day for the money to transfer to my bank account so I can’t just withdraw it on a whim if I get the temptation to spend the money on something other than what I should be saving for.
I like Capital One 360 because it has a little bit of a higher percentage of interest that your saving’s account can generate than a traditional bank. I can set goals of how much I want to save up and what I’m saving up for. I can also set up the frequency of how often I want to put whatever amount I decide into my savings account.
$25 a week has been good for me especially this year because I’ve been far more faithful in putting back money in my savings account and leaving it alone. In past years I would start doing that, but then something would come up and I would withdraw what money I had saved up and then stop the automatic transfer into my savings account for fear I would not have enough money to last me to my next paycheck in my banking account.
I’ve been much more disciplined this time and budgeting better so it has become a lot easier now to save money. A raise and a new position from my current job helps too. I’m nearly $200 away from reaching the one thousand dollar threshold and I will still continue saving after I reach it as well.
What I plan on doing is once next year rolls around, I’m going to increase the amount of money being transferred from my bank account to my savings account from $25 a week to $50 a week. That will equal $200 a month and will take me 6 months to reach another thousand dollars.
Whatever I get from my tax return as well is also going into savings. I’m also saving up for a big trip next year and should also have some money left over for emergencies.
Save up for yourself and your loved ones. It will help in the long run
This is what it takes, budgeting well and setting aside a certain amount each week that you can at least afford to do. Don’t cause yourself to go broke trying to save money, but set an amount back that you know you can do and still have money for your basic needs.
I know there are struggles and there are things that we want to purchase for our enjoyment, but I’m also learning to enjoy what I already have, not always go out and get the latest and greatest thing and I’m eating at home a lot more as well instead of always going out to eat.
Doing these things will definitely ensure that you can reach $1,000 in savings and putting $25 back each week is just the minimum I use and I’ve seen other places say that it is a good start to saving back money as well. Of course you can always put back however much you choose.
So there you have it, you now know how to save a thousand dollars a year and a good minimum amount each week to reach that goal. It does give me peace of mind to know that if something serious comes up, I should have the money to cover it.
Anyone can save money, you just have to discipline yourself to do it and budget for it. It is easier than you think, you just need to change your mindset. I’m glad that saving money is one of the things my parents taught me as I was growing up. My dad also made sure to save some money for me when it came time for me to go to college and trust me, every little bit helps.
What are you waiting for, start saving for your $1,000 emergency fund today. In the long run, you’ll be very glad that you did!
September 4, 2016 @ 12:34 pm
I really like this idea. I struggle with saving money and the thought of using an online institution to save is a very thought out idea. It makes it much more difficult to cheat when it’s set up automatically. The fact that it takes a few days to get the money is a bit scarey however provides the security of impulse purchases. I have also found that declining the debit card at your bank helps a bit too when it comes to following a budget.
Jason
September 5, 2016 @ 4:14 am
Hi Jason! I can understand having to wait a few days to get that money into your bank account can be a bit scary especially if you need the money right then and there so here’s what I do that can remedy that situation. It’s best to have a credit for emergencies only that you use for just that sort of situation when an unexpected situation comes up that you need to pay right then and there. Then you can use that money from savings account to pay it off. This has helped me in a few situations.
September 30, 2016 @ 10:45 pm
Hi,
Thanks for sharing. I agree with you something always comes up. It is a horrible feeling when you don’t have the emergency find when you need it.
Growing up, I saw who was the frugal one in the family and who was the spender. As I grew up, I became the frugal one and really think about what is necessary to spend and what I don’t need to spend.
Sofia
October 1, 2016 @ 2:51 am
Hello Sofia. I agree that it’s a horrible feeling when you suddenly need the money for an emergency and don’t have it. I just wish I would’ve saved more when I was younger something that my father did try to instill in me. I’m glad though that I’m saving now and I will certainly continue to save into the future.
October 24, 2016 @ 11:21 am
It takes discipline to control our spending and save up for a rainy day. I myself cannot accept wasting money and not saving up. But some people can. They spend every single dollar they have but they don’t feel a thing. Their salary gets wiped out every single month. It’s baffling. I could never do that.
Saving up is not hard, just put aside a small sum every month and spend what’s left after.
October 25, 2016 @ 10:27 am
Oh I totally agree with you Andrew. I just don’t understand how people just wastefully spend and not save up anything. Emergencies do happen and a time will come up where the money is needed, but not there. I love that I can just set up an automatic savings account where it just takes out whatever I amount I set out of my bank account each week and into my savings account.