6 Tips that Can Help You Save $5,000
Everyone’s savings accounts look a little different. Some have six months worth of household expenses stashed away, and others are just getting started on their savings journey. If you’re more like the latter and you’re wondering how to save $5,000, it’s definitely doable.
We have some tips on how to save $5,000 that don’t involve any extreme budget cuts or never spending money on anything fun.
Whether you’re looking for easy ways to save money so you can buy a car, book a vacation or navigate financial struggles, there are some things you can do.
1. Set a Realistic Timeline for You
What you have to do largely depends on how soon you want to make it happen. Savings $1 a day is easy, but you wouldn’t have $5,000 for about 14 years. But getting it done in a day or two likely isn’t going to happen either.
If you saved $14 a day, however, you’d reach your goal in about a year. That’s about $420 a month. Break it down in whatever way makes it more manageable for you.
If you’re not sure where to start with your budget, some of our favorite budgeting apps are Cleo and Quicken Simplifi. Cleo even has a way to automate your savings so you don’t have to think about it.
2. Cut or Cancel Subscriptions You’re Not Using
We know you’ve heard this one before, but it’s an easy savings win. This goes beyond streaming as well. You may subscribe to certain apps, media platforms or gyms that you don’t go to much anymore. While we love a good exercise regime, if you’ve mostly been working out at home, going for outdoor runs or using your apartment gym, it may be time to let it go. Look through your credit card statements closely to see what regular charges you have. We also like Rocket Money’s subscription management feature, too, which checks your bank account for any recurring charges. It’s a great way to discover subscriptions you may have forgotten about or no longer require.
3. Use a High-Yield Savings Account to Grow Faster
As you set money aside, you need to make money on your money. That means you put it in a high-yield savings account so you can earn even more with interest. Traditional checking accounts typically don’t earn interest.
A HYSA is typically one with an interest rate of 4.00% or higher, but anything over 3.5% is generally pretty good. To put it in perspective, if you put $5,000 in a HYSA earning 4.5% APY, you’d earn $225 in interest within the year.
If you don’t already have a HYSA, check out our list of our favorites to research your options.
4. Cut Monthly Expenses — Like Car Insurance or Groceries
It may be time to change things like your car insurance provider. If you haven’t shopped around in a while, you could be getting cheaper premiums somewhere else. Use something like The Penny Hoarder’s auto insurance comparison tool to see all your best options in one place. Then, whatever money you save on your premiums, put into your high-yield savings account.
For groceries, meal prepping and using coupons are classic strategies. Making meals ahead of time cuts down on food waste and helps streamline your shopping so you only buy what you know you’ll need. We also have a guide with a full list of tips on how to save on groceries.
5. Use Cashback Tools and Rewards to Save Without Trying
Discounts and cash back can really add up if you use them wisely. Use a cash back credit card for stuff you’d normally buy anyway. That way as you pay for regular expenses, you’re getting a little something in return (typically 3-5% cash back, but sometimes more or less).
For online shopping, get the Capital One Shopping browser extension or mobile app. As you shop online, it will automatically apply available discounts and scan the web to see if there’s a better deal out there. You can also get alerts for price drops on items you want.
6. Start a Small Side Hustle to Accelerate Your Goal
Side hustles are becoming more and more common as life gets more and more expensive. You can earn extra money by selling unwanted items like books and clothes, doing freelance writing or design, doing gig work like driving for Uber or DoorDash, and much more. You can even earn a few extra bucks completing surveys with sites like InboxDollars and Swagbucks.
A Final Word on How to Save $5,000
Such a big sum will take some time and effort, and the best way to do it is to adopt multiple of these strategies. Small wins over time will only get you that much closer to your goal. Make sure you’re not overpaying on car insurance, automate your savings with apps like Cleo and shop online with tools like Capital One Shopping to make sure there isn’t a better deal out there. And celebrate your wins as you watch your savings climb (in your high-yield savings account).
