5 Budget Hacks To Save $20,000
If you’ve asked, “how can I save $20,000 fast?” it’s one part mental, one part muscle.
One morning in my mid-thirties, I woke up with an intuitive hit so strong, I chose to follow it, though I also thought it was totally full of B.S. This little voice in my head whispered, “save $20,000,” while I was making overpriced coffee from my local bodega. Like, huh? I barely had $1,200 in my savings account, even though I’d achieved a reasonable amount of success in my career and was making a six-figure salary.
Yep, I was living paycheck to paycheck because what would I do with $20,000 anyways? As a lifetime renter, I did always have the dimly-lit goal of owning rental property myself—a revenge-goal of sorts, where I’d be a much better landlord than my previous landlords had been. Though this was a vague “bucket list” thing, I didn’t know where to start or where to buy (and hello, I wasn’t even close!). That $20,000 intuitive hit was the first time I thought it might be high time to get my financial shit together.
Without knowing where the hell I wanted to buy a house, I set my goals on saving $20,000 for a down payment. This was, coincidentally, a reasonable emergency fund for five months of living expenses (something I should’ve had already, according to conventional financial advice). But I had no plans to quit or get fired any time soon, so who cares, right?
Financial advisors I’d met with about my 401K (and many folks in the #FIRE and #debtfree community) say 3–6 months of liquid emergency savings is what everyone should strive for.
Turns out, there may be a reason that once you have a healthy emergency savings, you not only feel safeguarded from unexpected expenses, but more confident in general. Your whole attitude can change. Momentum spawns momentum, after all.
Setting this goal (and achieving it in 2019) was a major milestone for me and the whole damn exercise changed my attitudes and behaviors so drastically, I’ve become addicted to saving. Got a reason to save? Or just want to feel more stable financially? Here are a few top tips that might help you get to that big $20,000 and never go back to broke again.
1.Get serious. Whatever it takes (job jumping, side hustling, dumping your mooching boyfriend), make the decision to meet your $20,000 goal and commit to it, every damn day. This might mean you write it down on a piece of paper you carry in your wallet or stick on the fridge. Perhaps you’ll find an accountability partner to share in your progress? However you choose to commit, do it with confidence and don’t turn back.
2. Plan a weekly budget. People hate budgets because they take discipline but I think they really work because they take the emotion out of spending. Spending becomes about “is it in the budget or no?” Weekly budgets are more tangible than monthly ones and daily ones can get too inflexible (but I like them, too). There are many ways to budget — zero sum budgeting, the envelope method for category spending, etc.
What worked for me was recording all my fixed expenses, automating these bill payments and whatever I had leftover per month went into a weekly budget. I’d record every fluid thing I’d spend on in my Notes app and tally it up for the week. If I went over, I deducted it from the following week’s budget.
3. Eliminate credit card debt and (try to) never go back. And don’t “travel hack” with travel point credit cards if you can’t pay off your bill the next day. Forgetting about your balance and accruing interest just isn’t worth it. Unlike student debt and a mortgage (i.e. “long-game debt”) you have more control over your behavior using credit cards. If you can swing it, stop. Immediately. Not paying interest and monthly payments means more money to pay yourself. And doesn’t it feel good to owe someone else no-thing?
4. Learn to say N-O. Speaking of owing people nothing, boundaries are important when you’re trying to stack cash and, *bonus* you’ll quickly learn what you value spending money on and what you can pass on. If you have to pass on brunches, bachelorette parties and impulse online purchases because it’s not in the weekly budget, do it, even if it disappoints someone else. Your goals are worth it. After all, the freedom and confidence you’ll get from saving your emergency fund is way more impactful than that third round of Bloody Maries.
5.Consider naming your fund something other than an “emergency fund,” even if it is. It’s hard to imagine a fun “emergency” you’d want to spend money on, so that’s not super-motivating. In my case, I knew I wanted to buy a house and saving money was my down payment money. The habits I built helped me save well beyond my down payment, so I could leave a terrible job situation, and so, it also became my “fuck you money.” Whatever your reason, assign that name to your savings and watch it grow. And you just might be surprised that along the way when you totally slay your initial goal, you’re setting yourself up for bigger and better goals.
You’ve totally got this. Share additional tips in the comments—I’d love to hear how you’re saving big time.
