8 Tips to Save an Extra $1,000 in 1 Year (or Sooner!)
While financial planners say you need to have enough money set aside to pay three, six, or 12 months of your expenses in the event of a health crisis or job loss, that's obviously a monumental task -- one that may seem far in excess of what you can handle. Rather than setting the bar so high that you'll likely give up before you even get started, try to develop a plan for a basic emergency fund of $1,000, and give yourself a year to reach that goal.
The first step to achieve any large goal is to break it into bite-size pieces. So, instead of focusing on saving $1,000, make a plan to save $83.33 per month or $19.83 per week. It will take some discipline, but once you set up an account and automatically transfer money into it or just set up a jar with a lid and put cash away every day or every week, you're likely to feel the satisfaction of accumulating a safety net, and want to save more.
8 Ways to Save $1,000 in a Year
1. Cancel your cable service. This is a biggie, in terms of impact on your daily life, because let's face it -- people still watch a lot of TV. But it could be the only step you need to take to reach your savings goal. Jeff Yeager, AARP's savings expert and author of four books about frugal living, including his most recent, "How to Retire the Cheapskate Way," says the average household spends about $100 a month on cable TV, so this one choice could allow you to reach and surpass your $1,000 goal. You can substitute subscriptions to Hulu and Netflix for cable TV. If you can't live entirely without your cable service, consider cutting out the extra pay channels and features to reduce the bill.
2. Drink water. Some advisers might advocate for cutting down on restaurant meals altogether. But that can be a hard habit to break. Instead, says Yeager, modify one habit and drink tap water instead of ordering drinks or buying bottled water. "Even if they continue to dine out or order fast food/carry out as often as they currently do, the average family of four would save about $800 per year if they just ordered tap water instead of soft drinks, coffee, tea, or alcohol when dining out," says Yeager.
By the way, if you drink water at home, make sure it's tap water, which costs less than $1 per year, Yeager says. "If you drink only bottled water, you'll spend about $1,400 or more to get a year's worth of drinking water," he says.
3. Keep the change -- just $2.74 a day. Clare Levison, author of Frugal Isn't Cheap, suggests saving your loose change instead of spending it. $1,000 in a year is only $2.74 per day. If your bank has a free coin-counting machine, use that, otherwise count it yourself rather than giving up some of your hard-earned coins to a machine that charges a fee.
%VIRTUAL-article-sponsoredlinks%4. Automate your savings. Have the money taken directly out of your paycheck, Levison suggests. $1,000 in a year is only $19.23 a week. You may find that you don't even miss the money if you never see it.
5. Drive less. "According to the National Household Travel Survey, 'child miles' -- miles driven in the family car to chauffeur the kids to school, extracurricular activities, etc. -- have skyrocketed over the years," says Yeager. "If the average family could reduce their 'child miles' by even a third by putting the kids back on the school bus, arranging kiddie carpools with other parents, etc., they'd save nearly $1,000 per year in automotive costs, including wear and tear on their cars."
6. Get creative with your free time. Instead of spending $20 on a movie and popcorn, Levison suggests you cut your entertainment budget by finding activities that are enjoyable and free, like taking a walk or gardening.
7. Brew your own coffee. Leah Ingram, a frugal living expert who blogs at SuddenlyFrugal.com, says that while everyone knows you can save more than $100 in a month if you stop picking up take-out coffee every day, you can save more at home, too, by going back to regular brewing instead of using a K-cup or other single-serve coffee maker. It only takes a minute to measure coffee. And while savings estimates vary, most frugal living experts estimate that using the K-cup method costs about twice the price of brewing your own coffee.
8. Bring groceries to work. This is a different spin on the take-your-lunch-to-work advice. Yeager says if you don't want to make your lunch every morning, take a bag of groceries to work with you on Monday morning and make your meal on your lunch break. He says making your own lunches will save the average American more than $1,000 per year.
Beyond these, check out how you're spending money, and see if there are other small changes you can make that will net you $2.74 a day -- because that's all you need to save every day to reach $1,000 in a year.
Michele Lerner is a Motley Fool contributing writer.