How would you like to save an extra $5,000 by the end of the year? I’ve come up with three money challenges that will get you there!
If you participate in all three of the challenges, you’ll save $5,000 or more in just 52 weeks.
How to save $5,000 in one year
1. Save $2,019 in 2019
Transfer $168.25 every month from your checking account to an online savings account and you’ll have $2,019 in 12 months — plus interest.
My suggestion: Make the savings automatic by setting up a recurring transfer.
I’ve opened a new savings account with CIT Bank for this challenge. Its Savings Builder product offers a very competitive APY when you make a single deposit of $100 or more every month.
Learn more: How I’m using 5 bank accounts to save more money in 2019
2. Save Your Savings Challenge
I saved more than $2,000 with the Save Your Savings Challenge in 2018, so I’m not planning to stop for the upcoming year.
Here’s how it works:
- Always ask for a receipt at the checkout
- Use Ibotta and Fetch Rewards to get cash back (mostly grocery receipts)
- Stash your receipts in a box until the end of the month
- Add up the total “You Saved” amounts
- Transfer the money to an online bank like CIT Bank that pays interest
- Set a goal for the money that you really saved
The last step is an important one. What are you saving for? I decided early on in the challenge last year that I would use the money to fund my Roth IRA.
Learn more: Receipt trick: How I saved an extra $2,000 in 52 weeks
3. Credit Card Rewards Match
Finally, I’ll be matching all of my credit card rewards this year. I started this challenge last year and think it’s a great way to focus on using my rewards to save for the future.
When I redeem credit card rewards, I simply match the dollar amount and transfer it to savings.
For example, I got a $100 sign-up bonus for the new Uber Visa Card. I allowed myself to spend that money on whatever I wanted, but I then put another $100 into savings.
Learn more: Best credit cards: My strategy to earn the most cash back
Action items
Ready to get started? To help reach your $5,000 savings goal, here are five things you can do to earn more and spend less:
- Open an online savings account with CIT Bank or another FDIC-insured institution that offers a top interest rate.
- Switch to a cheaper cell phone plan and don’t buy a new phone every year. My most recent wireless bill was just $2. (Learn more)
- Lower your cable TV bill or cut the cord entirely! Here are 3 ways to do it.
- Download Ibotta and Fetch Rewards to start earning cash back on your grocery purchases. Earn welcome bonuses with my special codes.
- Make a monthly budget! Here’s why I like Google’s free budgeting spreadsheet.