Alright, 2021 is almost here, as in days away. I literally just realized this (one of the side effects of working for yourself at home), and I have no clue how the year flew by so quickly. I’m really excited for 2021– I’ve got big plans for my businesses, we’re going to travel a little more, and I’m just really excited to be helping more of you realize your financial goals.
If you don’t have a financial goal for 2021 yet, I’ve got one for you: $5,000 in your bank account by the end of 2021.
Yes, your goal for 2021 is $5,000 to spend however you choose. Maybe you want to go on a vacation without adding any debt. Maybe you could put that $5,000 towards a downpayment on a house. You could even clear some of the debt that you’ve been paying on.
That money will be yours, and I’m going to help you with the how, because I know you’re all looking at your screens thinking I’ve gone insane. Trust me, I think you’re going to be surprised at how easy it is to save $5,000 this year.
I have 12 tips. A year-long strategy if you like that sort of thing, but you don’t have to follow all of them or in this order.
The idea is that even if you are being proactive by following a budget and tracking your spending with something like Personal Capital, you still might have money leaking out of your budget. Typically, the biggest money drainers and money savers are usually going to be the things you don’t even realize you could be doing.
I also have a few things you can do in your spare time to help you reach that $5,000 savings goal. None of them take much time, but that time investment will reward you with cold hard cash.
Here’s how this works– take the money you are saving or earning from any of the strategies I mention and set it aside in an account. Even if it’s $15, put that away. Bonus points if you report back in at the end of 2021.
Here are 12 ways to save $5,000 in 2021
1. Adjust your thermostat
Most places in the U.S. are pretty cold right now, and while that heat is running, money might be just draining from your account. This applies to the summer months too since air conditioning will have the same effect on your budget.
To save money on your heating and cooling costs, start with adjusting your thermostat by just a degree or two. This isn’t quick cash, but over the course of the year, you will start to see your heating and cooling bills lower.
In the winter, you should also make sure your windows and doors are sealed well. You can use drapes to keep the heat in, and maybe just get used to wearing an extra layer or two.
For the summer, try using a window or portable AC unit to only cool certain rooms instead of your entire house and use fans to circulate the air. I would say wear fewer layers, but if you live with someone else, even a significant other, they might have something to say about this.
2. Start investing
I know you’re probably thinking that investing costs money, and it does. But, remember that investing is making your money work for you, which will earn you more than the initial cost in the long run.
If you don’t think you have enough in your budget to start investing, micro investing might a good option for you. With an app like Acorns, you link as many debit and credit cards as you want, they round each transaction up to the next dollar, and they invest that for you.
I have a friend who started using Acorns just three months ago, and she already has over $100 in an investment account from roundups alone.
3. Start a side hustle
This will always be my favorite way to earn more money because side hustling is how I paid off $40,000 in student loans in just 18 months.
Your side hustle can be any number of things, online and offline, but my all time favorite is running Facebook Ads for local business. I created my Facebook Side Hustle Course to help you create an ads strategy, find clients who need your services, and how to get those clients to say yes.
You can start earning $1,000 in your first month, and I have many students who are now earning around $5,000 a month.
4. Negotiate your bills
This one is so easy. I’m serious, it might actually be the easiest thing on this list.
Grab your phone and the following bills:
- Cable/internet/phone: Call your service providers and see if they have any promotions that may save you money. You might easily be able to cut $20-$100 off of these bills each month. If the promotional service is going to cost you more after the promo period is over, make sure you set a reminder on your calendar to cancel or find a new promo.
- Car insurance: Auto insurance is a competitive industry, and to keep you around your insurance company might be able to offer you some discounts. Also, you can always seek out a different company with lower rates if yours can’t lower your payment.
- Credit card interest rates: As long as you are making your payments on time, your credit card company might be willing to lower your rates.
- Medical bills: If you are able to pay your medical bills in full, rather than in installments, the hospital, doctor, or medical care provider is often able to lower your total bill.
I actually kind of like calling to negotiate for lower rates, and most of the time it works. If it doesn’t, just try again in a few months. There is no harm in asking.
5. Cancel subscriptions you aren’t using
Are you watching all of the streaming services you subscribe to? Is that monthly food delivery service really helping you? What about that magazine you get in the mail, when was the last time you actually read it?
The cost of subscription services add up quickly… if you just take a TV and music streaming services alone, you could easily be spending $50+ a month.
Look at what you’re currently subscribed to and try cutting out at least half of those.
6. Get rid of your car payment
I have to go here because financing new cars (AKA debt mobiles) is one thing I hate seeing millennials do. Your new car payment is probably costing you hundreds of dollars every month, and it’s money that you are wasting on a depreciating asset!
I could buy a brand new G-Machine if I wanted to, but both my wife and I will be driving used cars for the foreseeable future.
Learn how to get rid of your car payment and find an awesome used car here: How to Get Rid of Your Car Payment: The Ultimate Guide.
7. Take online surveys
It will take a lot of surveys to add up to that $5,000 savings goal you’ve set for yourself, but they will help. I actually took online surveys to make extra money, and it’s pretty easy to do.
8. Refinance your student loans
Student loans are usually the biggest bummer about that shiny new degree you have hanging on your wall after graduation. That debt, whether it’s in the five or six figures, can make it feel impossible to get ahead and save for retirement.
One way to save money on your student loans is to refinance with a company like Credible. They bundle all of your loans, lower your rates, and give you a shorter repayment period. All of that can save you thousands over the course of your repayment period.
To learn more about whether or not refinancing your student loans is right for you, read Refinancing Student Loans: The Ultimate Guide.
9. Improve your credit score
We don’t live in a world where paying with cash is always an option, and that means having a decent credit score is a must.
Plus, and this might not be obvious to everyone, having a low credit score can actually cost you money. That’s because a low credit score means you likely have higher interest rates on your credit cards, loans, and it might even affect your ability to get a job.
Unfortunately, improving your credit score takes more time than it took to damage it in the first place, so please, start today. You can learn how here.
10. Get a better bank
Most millennials are probably banking with the same bank they deposited their first ever paycheck in. It’s really nice to have that sense of familiarity, but if your bank is costing you money, you can always switch.
This is found money that you can use towards that $5,000 savings goal, and it starts with seeing what kinds of costs you are incurring because of who you bank with.
Do you keep paying ATM fees because there aren’t any around for your bank? Does your account come with a maintenance fee? Did you know that there are some banks who will actually pay you to open an account with them? It could be a money market account or taking advantage of their promotional CD rates.
Of course, do your research and make sure you aren’t going to wind up in the same spot with a new bank.
11. Go on a cash diet
Try using a cash-only budget for a month to squeeze some extra money out of your budget, and you can put that extra money towards your savings goal. And yes, I know I just said that you can’t use cash to pay for everything (see #9), but sometimes using cash where possible can help you budget better so that you can start saving more money.
A cash diet is basically just using cash to pay for as much as you can. Get your budget and a wad of cash, look at your expenses and put cash in envelopes for each spending category. Here’s an example: if your grocery budget is $100 for the week, then put $100 in an envelope, simple.
Having that cash will help you see how close you are to going over your budget in each area. The biggest thing is that you will have to force yourself to not pull out a credit or debit card. In fact, just try and actually leave them at home.
12. Dress like a scrub
One of the easiest things to buy into is the idea that you have to keep owning new stuff. I get that there are trends or whatever, but I seriously believe that getting rid of a shirt because it has a hole in it is ridiculous.
Socks with holes, that’s another thing. And because I’m trying to stay married, I let Coral throw those away.
Buying new stuff is okay sometimes, but only if you can actually afford it. That $100+ you’re about to spend on another pair of shoes? Put that towards your savings goal this year. I actually didn’t buy any new clothes while I was paying off my student loans, talk about sacrifice.