How to Save $5,000 in a Year
- October 13, 2021
- by Angela
Many people wonder how they can save $5,000 in a year. In this post we explore budget expenses that can be trimmed, either by finding less expensive alternatives or cancelling ones that are not used to their full capacity. Breaking it down on a per month basis you’d need to trim about $417 from your monthly budget. Read on for some strategies below.
User your library for DVDs and books - for free
Entertainment is a standard budget category. It is normal to spend a bit here and there on books, magazines, newspapers, DVDs, streaming rentals, etc.
But did you know there is a good chance your local library has all the same content, for absolutely nothing.
When it comes to movies and music you may have to wait for new releases to become available. By using the library, instead of spending a lot of money on these items you can borrow them for free!
This strategy could save you anywhere from $100 - $250 annually depending on how much you use the library.
Stop buying fancy coffee
Coffee drinkers are constantly reminded of how much their habit is costing them…
Many young people have a habit of buying coffee every morning at Starbucks. That coffee costs $4 - $6. So this is an opportunity to save around $1,000 in a year if you brew it at home. You might even be able to find a blend you prefer to Starbucks.
Cut the cord - drop your cable TV subscription
A lot of people have cable TV and pay $50-100 a month for it but rarely watch it.
The alternative is to switch to a streaming service such as Netflix, Amazon Prime or Hulu. Even if you watch a lot of TV, a streaming service is still a great alternative to cable TV. There is no lock in so you can switch to a different one once you run out of content on a given platform. Doing this you can save anywhere from $420 to $960 per year.
Prep healthy work lunches and delicious snacks
Most people decide to go out for business lunches once a week, but that soon becomes a daily occurrence. The average work lunch costs $10 a day, and if you practice that every day, you can end up spending $2,500 a year on work lunches. This assumes a 5 day work week, 50 weeks per year. To avoid that, you can prepare lunch at home a couple of times during the week and thus prevent higher costs, and you will eat healthier. This way, you can save an average of $1,000 per year (per person).
Stop thinking you’ll win the lottery!
Do you think you will get rich if you win the lottery? That is true, but your odds of winning are terrible. Spending $5 every week on lottery tickets almost guarantees you to lose $260 per year. If you really have to buy tickets, cut your spending in half and save $130 per year.
Stop buying bottled water
Plastic water bottles are not only bad for the environment, they are also bad for your budget. It is way more expensive to buy bottled water vs drinking from the tap. If you are concerned about water quality use a Brita pitcher or other similar water filter to get rid of contaminates and make it taste better. This way you will save up to $100 per person per year.
Make your own birthday and greeting cards
Greeting cards are a ripoff! Make your own, print out a picture of yourself, your pet, or your family. There are many free online greeting card builders. You can save $50 - $100 a year this way.
Cut out restaurant meals and cook at home
Similar to coffee drinkers another popular budget item to target is eating out.
Do you know how much people on average spend money on food from their monthly budget? Next to housing food is the next major category. If you eat out 3 times per week at $15 per meal, that adds up to $2,340 per person per year. That's not a reason to stop going out, but you could reduce going out to just two times per week and save $780 per year.
Go for used clothes instead of new trendy clothes
Many girls want to look fashionable and spend a lot of money on clothes. They wear those modern clothes only for one season and buy new clothes the following season. It is much better to buy clothes that they will be able to wear for several seasons, and they can sell clothes that they no longer wear and thus earn extra money. Buying practical clothes for a few seasons can save you up to $500 a year if you buy clothes at a discounted price.
Avoid brand-name medicines and go generic
Branded and generic drugs contain the same ingredients, but people prefer to buy a drug with a branded name because it seems safer, better, has a shiny box and appears to be better quality (because of the price) vs a generic drug. Generic drugs have the same effect as branded drugs, they are just cheaper because there is no marketing or fancy packaging. Potential savings will vary depending on what you spend on medication, but could be up to $150 a year per person.
As you can see from this list, it is possible to save $5,000 a year (more or less), you just need to adjust your budget and make sure you are getting the most out of what you are spending money on.