How to Save 10k in 1 Year

First and foremost, I fully understand that my personal life experiences aren’t something that all people can replicate, and I know everyones situation is different. However, I do believe the tools and values I learned and instilled could provide a bit of guidance to anyone looking to achieve their own financial goals.

Sitting on the edge in Rio

To anyone out there who’s ever said to themselves “If only I had the money”…

How to Save 10k In 1 Year

The Goal: To buy a one-way ticket to Australia with Parker and Russia, rent an awesome little hut on the beach, be a surf bum, and make funny videos for our YouTube channel (which had less than 1k subscribers at the time). I figured that saving $10,000 would give me plenty of cushion to land in Australia, find a job, and get back on my feet working and living in a new country. Needless to say, our plans changed, and the guys and I never even made it to Australia. Instead, we used the money we saved up to travel for as long as we could before it ran out, which ended up lasting seven beautiful months in 11 different countries.

The Finances: When I mentally decided to start saving money to travel, I had no idea where to start. My paychecks would come in, and after paying rent, cell, groceries, booze and bar tabs, lunches and dinners out, cabs and public transit, toys and entertainment, clothes, and my shoe addiction, there just wasn’t anything left. In essence, I felt I didn’t have any money to save, and had no idea where to start.

The Story: As a child, my family was middle class, and far from wealthy by North American standards. I remember watching my father meticulously account for our family’s finances with every receipt being filed away in an accordion folder. Growing up, he used to show me his Microsoft Excel sheets on his desktop tracking every dollar spent on our family’s things, and how much my mom’s coupon collecting actually saved us in the long run. So naturally, when I decided to start saving up, I reached out to him. Funny enough, he didn’t supply me with any online resources, books, or material to help me put money aside; instead, he offered just three simple points of guidance: Know how much you make, know how much you spend (and on what), and know how much you want to save.

Machu Picchu

What would you like to do if money were no object?

January, 2011: It was the first week of 2011 when I took to my father‘s advice and started my own excel sheets: one for money in, and one for money out. I also set my savings goal: to stash away $10,000 in exactly one year’s time, to use solely for the purpose of travel.  Now let‘s get down to the details of my own finances…

Money In: I was working 40 hours a week as an entertainment manager for a series of local pubs and was making about $16/hour. My monthly income was roughly $2,600 after tax.

Money Out: For all of January I tracked every single expenditure I made by keeping all my receipts and writing sticky note tabs on my phone. At the end of the month, after continuously plugging everything into the excel doc, it looked something like this:

Money In / Money Out Excel

  • Rent: $900
  • Cell: $100
  • Groceries: $300
  • Eating Out: $600
  • Booze: $150
  • Shopping: $100
  • Cabs: $350
  • Entertainment: $100

January Spending Total: $2,600

$2,600… This explains why I never had money in the bank after paying off my credit card, I was literally spending every single dollar I made.

Golden Hour

Change your perspective on money and start living the life you deserve

The Plan: I took my savings goal and broke it down by exactly how much I had to save each month in order to achieve the $10,000 cash pile I was dreaming of. $10,000 / 12 = $833/month…  $833 a MONTH!

At first this seemed impossible as I wasn’t willing to sacrifice the good life I was living, so this took a bit to sink it. I remember starring at my excel doc and looking at the exact amounts I was spending on buying rounds of drinks at the bar, paying for daily lunches and dinners, cabbing to friends places, buying shoes, etc. The list went on and on, but the facts slowly sunk in.

My Realization: I didn’t need to spend money on many of the things that I was. In fact, I noticed a few controllable areas that I could easily tighten to begin working towards my $10k goal. I challenged myself the following month to see how much I could decrease my spending, and the two areas that seemed the easiest were eating out and cabbing. So, I ate out less by buying more groceries, cooking extra food, and eating leftovers regularly. And I took fewer taxis by managing my time better, and by bussing and walking around rather than dropping the extra $50-75 a week on meaningless cabs.

When the end of February rolled around, it blew my mind. And here’s why…

Money In / Money Out Excel

  • Rent: $900
  • Cell: $100
  • Groceries: $400 (+100)
  • Eating Out: $250 (-350)
  • Booze: $150
  • Shopping: $100
  • Cabs: $100 (-250)
  • Entertainment: $100

February Spending Total: $2,100

$2,100! I had actually put aside $500… this was hilarious and so ridiculously awesome that it motivated me to take the challenge even further.

Visualize your goal, think about what it will do for you, and embrace how it will feel once you've achieved it.

Visualize your goal, think about what it will do for you, and embrace how it will feel once you’ve achieved it.

March rolls around and my good friend Parker was looking for a place to stay downtown, while also on the same savings train. Russia and I decided he could live in the 7’x7’ solarium of our apartment if he pitched in $400 for rent, which dropped my rent to $700, saving me another $200 per month. Furthermore, Parker loves to cook (spicy food), which got me into the kitchen more often as well.

With these simple changes I was well on track to hitting my goal of saving $833 in March, but I noticed a few things that I hadn’t planned for… there were expenses coming through the pipeline that I hadn’t even thought about, which would stop me from hitting my goal by the end of the year. A family cruise to the Caribbean, a massive shopping date in Seattle with my dad, and a couple music festivals I really wanted to go to. I realized I needed to put aside more than my anticipated amount to cover these important things.

This is where I took it to the next level and decided to pick up another job to work one more day each week. For me, this meant DJing in a clothing store for eight hours on Sundays after going to bed at 3am the night before, but it was a sacrifice I was actually excited to make because it added another $500/month in the bank. By April, I was saving more than I had ever been in my entire life and knew I could afford taking time off work for family trips, going to the music festivals I loved, as well as taking on a few other entertainment endeavours that would cost me both money and time away from work.

I must admit – during this time I was often that guy who ate at home 20 minutes before showing up at the restaurant, and ordering double waters with lemons to keep my bar tab low. But the truth is, I was okay with being that person, and I didn’t let it affect me. People used to call me cheap and poke fun at the fact that I’d show up to a hangout with a bag of snacks to tide me over, but I just didn’t care. I had a freaking goal to hit!

Mr Kelimutu - Indonesia

Set your goals high, like really really high… you have nothing to lose

I started turning into a savings machine. Most of the decisions I made were based on two simple questions: 1) Do I really value spending money on this? and 2) Will this help or hinder my goal of travelling?  It was as if my new mindset and tools that I had learned couldn’t be ignored. Sometimes it sucked, when I told myself I couldn’t partake in certain activities, or join friends on fun outings, but looking back on it, it was so worth it.

By the end of the year, my excel doc looked something like this:

Money In / Money Out Excel

  • Rent: $700
  • Cell: $100
  • Groceries: $400 (+100)
  • Eating Out: $200 (-400)
  • Booze: $100 (-50)
  • Shopping: $100
  • Cabs: $100 (-250)
  • Entertainment: $100

Monthly Spending Total: $1,800

My income was around $3,100 per month, of which I saved about $1,300. To those of you with your calculators out, you are correct: I saved MORE than $10,000 in 1 year. Also just a heads up, Parker and Rush both hit the same savings goals as me that year.

My advice to anyone who wants to save money (hopefully for travelling):

1. Make a goal with an exact amount and a date for that cash to be in your hands. Break down how much you need to save monthly, weekly, even daily, if you have to.

2. Know exactly how much you make and ask yourself if you’d be willing to work more so you can bank that money to your cause.

3. Know how much you spend and on what, exactly. Separate your controllable and non-controllable spends.

4. Finally, ask yourself: of all the things you buy daily, weekly, and monthly, which ones are a necessity to you, and which ones can you drop, so that your dreams can actualize.

Pick a Saving Goals and break it down for a year:

  • 2k = $166/month or $38/week
  • 4k = $333/month or $77/week
  • 6k = $500/month or $115/week
  • 8k = $666/month or $154/week
  • 10k = $833/month or $192/week
  • 12k = $1,000/month or $231/weed
  • 15k = $1,250/month or $288/week

Look at the effect of working 1 extra shift a week for a year:

  • $8/hr x 8 hrs x 52 weeks = $3,328
  • $10/hr x 8 hrs x 52 weeks = $4,160
  • $12/hr x 8hrs x 52 weeks = $4,992
  • $15/hr x 8hrs x 52 weeks = $6,240
  • $18/hr x 8hrs x 52 weeks = $7,488

Checkout what happens when tightening up your spending for a year:

  • $100/month x 12 = $1,200
  • $175/month x 12 = $2,100
  • $250/month x 12 = $3,000
  • $400/month x 12 = $4,800

To Conclude: Play around with these numbers on a piece of paper, and create a plan of action to implement in your own life. If you need an accountability buddy, find a friend who’s down to do the same, and check in with each other weekly or monthly to see how each others progress is doing.  Make changes to your plan and adjust your life accordingly.  If you need to work less because you’re going mental, thats fine!  If you value getting that $8 Starbucks Latte and cookie in the morning, then keep doing it… we all have our vices.  The key is to stick to your guns, and stop making excuses why you can’t, and start looking for the reasons why you can.  We are all entitled to abundance and prosperity, so set your goals high and don’t follow the status quo!

If You Can You ShouldLeave a comment with your own awesome money saving techniques and stories!!