How to Save Your First $1000 & Boost Your Savings - Life's Little Pleasures and Struggles

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Saving your first $1000 can seem intimidating, and a lot of people don’t have $1000 in their savings accounts to cover a sudden, unplanned expense. Fewer than 4 in 10 Americans have enough money set aside to cover an unexpected $1000 expense, such as a trip to the ER or car repairs, according to a new survey by Bankrate. Having even $1000 saved in your emergency fund can get you out of many financial scrapes. Knowing you have this safety cushion between you and life will make you way less reliant on your next paycheck.

Many financial experts say that saving your first $1000 will give you a head-start in your financial life. At first, coming up with $1000 may seem like an impossible mission to some people, but it’s easier to get started than you might think!

For many people saving can be difficult, especially in the current economy. But if you build the right habits and make realistic plans and stick to them, you’ll find that saving isn’t that hard after all!

Ways to Save Your First $1000:

Start with these strategies for putting away your first $1000 gradually, and let your savings grow from there.

Track your spending

Before you do anything to improve your financial life, you first need to take a careful look at your finances. You need to carefully review your earnings and your spending. Many people are deluded into thinking that they are aware of where their money is going. But the reality is often the opposite.

That’s why, you need to find out where your money is going, how you are spending your hard-earned money, whether you are over spending, and where you can cut back and save some money to meet your important financial goals – to reduce stress and simplify your life.

You might need to adjust your spending habits to meet a financial goal such as getting rid of debt, saving your first $1000 in your emergency fund, or saving for retirement.

Related post: 20 Silly Things You Are Wasting Money On

Create a sustainable budget and stick to it

Creating and sticking to a budget is fundamental to your financial success. If you think you can simplify your financial life and save money without creating a well-defined, sustainable budget, then you’re going in the wrong direction.

A budget is all about being intentional about your money. It helps you create a plan so you can see where your money is going and find out how much you can actually save each month. Budgeting is the most effective way to get your financial life in order, track your spending, plan your future, and maintain a simple financial lifestyle. Even a basic budget can be the difference between achieving your financial goals and wondering where all your money went.

You can get started by creating a simple budget (by using a plain notebook, computer, or your smartphone) that compares your monthly expenses to your income and identifies how much money you have left over at the end of each month. List all your incomes for the month — from your paycheck, your partner’s paycheck (if they are working outside), investments, cash gifts, and any other sources of regular household income.

Now, write down everything you and your family spend in a given month, including rent or mortgage payments, utilities, groceries, medicines, child care costs, home maintenance, car loans and related expenses, other debt payments and monthly insurance premiums. Look through your receipts, credit card accounts, and bank account statements over the past few weeks to see how much you spent on entertainment, dining out, socialization, and other miscellaneous shopping.

Once you have a good idea of what you spend each month, divide your expenses into necessities (such as rent or mortgage ) and things you can live without for now (such as eating out, vacations, costly entertainments, and other discretionary spending). And then, cut back on those unnecessary things until you come up with $1000 in your savings.

Stop impulse buying and Shop intentionally

Impulse buying is an unplanned decision to buy a product or service, made just before a purchase. This one is focused on instant gratification. This can destroy your budget because you will spend money without a plan and without thinking. This can result in overspending and not having enough money to save for the rainy days.

Impulse buying has never been easier before, thanks to e-commerce. You can find anything and everything at the touch of a button on your phone screen! And before you realize, those momentary shopping sprees cost you hundreds to thousands of dollars that could otherwise be saved for something important and meaningful. Learning how to stop impulse purchases is one of the most crucial tips to help you save money.

Pick an amount to save monthly

Saving money is easier when you look for ways to save regularly and make it a habit.

Find out how much you can comfortably save each month. And then put that amount in your savings account – religiously. Say you want to save your first $1000 in six months. That’s about $167 a month. On a smaller scale, it’s about $42 a week. You can round that up to $50 a week and $200 a month to save faster if possible, or $150 a month to give you more time to stretch. A $1000 may seem intimidating to many, but small amounts feel like more achievable.

You can even pick a fixed amount as little as $10 a week or $40 a month. Or you can set aside a percentage of your earnings each month. Some people save 10%, 15%, or even 20% of their paychecks.

Though a regular savings pattern works best, your amount doesn’t have to be set in stone, if your income and expenses fluctuate. Maybe you’re able to save more money in some months and less in others, especially if your job is commission-based. Just make saving a priority, and keep saving however and whatever amount you can manage to do.

Make your saving automatic

Saving money is easier when a portion of your income is being taken away from your paycheck even before you get the money in your hand or in your bank account (you can arrange that thing with your employer), and therefore, you don’t even miss it. One of the most crucial mistakes that a majority of people end up making is that they spend their income first, and then try to save whatever is left at the end of the month – only if any money is left. What you need to do instead is pay yourself first (save), spend later.

Whenever you get your paycheck, make sure that you save a certain amount of money first, and then spend the rest. If your bank allows you to schedule automatic transfers, set one up to pull a certain amount from your checking account into your savings account on a weekly, biweekly, or monthly basis. Or you can link your savings account to your checking account and set up a weekly or monthly direct transfer.

Remember, savings require patience and persistence. It can be hard to see the full potential of your savings if you are only putting away small amounts at a time. But your efforts will soon add up and your savings will grow. For example, saving just $25 each week or $50 every two weeks will amount to $1,300 per year, and if you continue to save at that rate, in five years, you’ll have $6,500!

Automate your savings today, and watch your savings grow!

Review your insurance policies

Are you getting the best deal possible on your car insurance or home insurance or both? Insurance is expensive, no matter what kind of insurance you’re talking about. Car insurance, health insurance, home insurance, life insurance, etc. most likely eat up a good chunk of your money from your budget. Don’t get comfortable paying more money than you are supposed to – simply because you are used to it.

It’s critical to choose the best plans for your life and your budget. Once you have a better understanding of what insurance you need, shop around and find the best rates. Make sure you are getting the best deal available in the market. Shopping around can save you thousands of dollars – including your first $1000. It can be easy to just renew these kinds of agreements each year without thinking, but it could pay off to shop around.

Also, check into combining insurance policies under a single provider. Some companies offer discounted rates if you bundle, for example, your home insurance and auto insurance. Although bundling doesn’t always give you a better deal, it’s worth looking into.

Be sure to take into account any discounts for which you may be eligible. Many car insurance providers offer deals for students with good grades, seniors, teachers, veterans or people with good driving records. You may be eligible for one or more discounts without even realizing it.

Compare the prices of your paid services

Most people rarely switch companies unless they have a good reason. This makes it easy to shop, but also easy to pay more than you realize.

Every quarter, go over your bills for internet, cable service, cell phone, and other paid services. Compare prices to other companies and see if you can find a better deal. You may find that new products have been introduced or prices have changed since you last paid attention. If you find a better deal, make the switch. You might be surprised at how much money you can save each month just by switching.

You can also call your current provider, tell them what rate you have been offered, and then ask them to match it. Many will give you that same price to keep you with them if you are a long-time customer. Save money on your cell phone service by getting rid of extras like costly data plans, phone insurance and useless warranties, and put that money into saving your first $1000.

Clear out the clutter and sell those

We all have things lying around in our homes that we don’t need or seldom use. Why not make use of them instead of letting them sit there, take up space, and collect dust? So, declutter the stuff in your home, find things that you don’t use but may be of value to others, and let go of them for the sake of your financial future.

Go through your living space room by room and evaluate its contents. Decide what you want to keep and divide the things you want to get rid of into three piles: donate, sell, and trash. And the cash you can make on those things can help you save your first $1000 easily.

By getting rid of items you no longer use or have a need for, you will have more space for the things that will add value to you and your family. You might also find things you forgot you had, and reduce buying duplicate items because in an organized home you can easily *find* what you’re looking for.

Have a yard sale, take unwanted items to a consignment shop or list them for sale online to make some extra cash for your savings account. Things you don’t sell can be donated to your favorite charity, which can then be used as a tax write-off come April.

An organized, less-cluttered space will increase your enjoyment of your home, save you time spent searching for misplaced or lost items, and keep you from replacing the things you didn’t actually lose.

Related post: The Real Cost of Clutter in Your Life

Try fun activities that are free

One of the most effective ways to save some money is having fun for free. Most people tend to spend the most on weekends. It’s the time when everyone in the family has free time and gets together to go out and have fun. But what if you could cut down on this spending till the time you save that first $1000?

Second-rate entertainment can be a big money waster. 23.10% of Americans waste money on entertainment. Instead of wasting your money on movies in theater or expensive games, try to find fun things to do that are free or won’t cost you much money.

Don’t worry that you will have to sit at home all day or that you will not have enough fun if you don’t spend. There are a ton of free fun things to do, and our ‘Mother Nature’ offers a lot of entertainment free of charge. Take advantage of that and save money. Go hiking, go bike riding, play outside, build a bonfire with your friends, enjoy watching the sunset with your family, have a picnic in nearby park etc.

Increase your income

After the first few weeks, you will get an idea of whether you’re meeting your weekly/monthly savings goal or not. So according to the basic formula in personal finance, there are only two ways to increase the amount you save. Either you spend less or you earn more. So if you’re not able to meet your savings goal by spending less, consider taking up something that would supplement your income for that period and grow your savings.

In order to meet some of your important financial goals and save more money, you might need to create an additional source of income. With a modest boost to your income, you can save more money – including your first $1000 – for the things that matter to you or you can use the money to pay off debt and be stress-free.

There is no shortage of side hustle options to earn some extra money. Consider starting one that fits into your lifestyle.

While putting away your first $1000 might not be instantaneous, if you stay diligent with your spending habits and savings strategy, it will happen over time. From there, you can continue to boost your savings and rest easier knowing you have money set aside for a rainy day.