What would an extra $5,000 in your bank account mean to you in a year?
Would you be able to pay off debt, travel, start investing for retirement, or save for a down payment on a home?
Wherever your imagination takes you, the first thing you must know is that it’s possible. The trick is figuring out what exactly you need to do to save $5,000 in the first place.
To help you get started, here’s a 12-step plan to help you save more, earn more, and end up with an extra $5K in your bank account in 365 days.
How to Save $5,000 in a Year
#1 — Raise Your Credit Score
A good credit score can save you thousands. One study showed the difference of having excellent vs. poor credit saves a typical 35-year old male $274,918 over his life.
That’s why when it comes to small actions that get big results, raising your credit score tops the list.
Fortunately, it’s also easy to do.
I use a free site called Credit Sesame. With Credit Sesame, you get your credit score for free, plus personalized tips to help you raise it.
Credit Sesame also allows you to see the information on your credit report. A recent FTC report found that 20% of Americans have an error on their credit report. Considering how big of an impact your credit score has on your finances, it’s vital to know if an error is bringing down your score.
#2 — Earn Up To 20% Cash-Back When You Shop Online
If you’re not getting cash-back for shopping online, you’re missing out. There are many sites that give you money back (they share the referral fee) for the things you buy online.
My favorite site is Swagbucks, which lets you earn up to 20% cash-back from stores like Amazon, WalMart and Target.
Swagbucks has paid out over $300 million in rewards so far, has an A+ rating with the Better Business Bureau, and is a reader favorite at The Ways To Wealth.
Click here to get a $5 bonus for signing up and making your first purchase.
#3 — Start Building Your Money Making Skills
To save $5,000 in a year, most people will have to do more than just cut expenses. It’s important to earn more money as well. As Benjamin Franklin said:
“There are two ways to increase your wealth. Increase your means or decrease your wants. The best is to do both at the same time.”
Maybe the easiest way to earn more is by completing surveys. A year ago, I had never heard of completing surveys for money. However, after reading stories of bloggers who credited surveys with helping them pay off their debt, I was intrigued.
Little did I know there are dozens of survey sites that pay you for completing surveys online. Here are three favorites of The Ways To Wealth readers:
SurveyJunkie is an established survey site with over 5 million members and an A+ rating from the Better Business Bureau.
MyPoints has paid out over $236 million in rewards. There’s also a $5 bonus for your first five surveys, with this link.
Opinion Outpost allows you to earn points with each survey completed, which you can redeem for cash through PayPal. You’ll then be entered into Opinion Outpost’s $10,000 quarterly drawing.
It’s important to mention that all these sites are free to join. So, by signing up for all three, you’ll be able to earn more. Also, make sure you complete the basic profile information. Typically, the more targeted the surveys, the more they pay.
#4 — Pay Off Your Debt Faster by Refinancing
Why exactly does having an excellent vs. poor credit save a typical 35-year old male $274,918 over his life?
Interest payments. The average American spends $8,037 each year on interest.
Whether it’s student loans, credit cards, cars, or even a mortgage — it’s worth seeing if you can consolidate or refinance your debt.
Don’t underestimate the power of doing so. With one of the providers I mention below, the average borrower who refinances their student loans saves an average of $288 a month.
Where can you start your search for lower rates? It depends on your income and credit score.
Credible is one great option. Credible allows you to search and compare rates from top lenders, and it will show you real rates — not ranges — from multiple lenders in under two minutes.
Rates from Credible lenders are as low as 4.99% to refinance your credit card debt, so definitely check them out.
When it comes to student loan debt, there are a number of high-quality refinance options. You can learn more about the process in my guide to student loan refinancing for beginners.
#5 — Start Driving For Uber
Beyond surveys, another easy way to earn some extra cash is driving for Uber.
What’s nice about driving for Uber is that you can work on your own time. Whether weekdays, weekends, or nights work best — the choice is yours. There are no schedules, no shifts, and no minimum time commitments.
Also, by working when demand is high, such as when an event is in town, you can earn higher rates.
There are a couple of key perks that make driving for Uber especially attractive.
First off, many freelance rideshare and delivery platforms are plagued by a lack of consistent demand. If you’re online and ready to work, but not getting a constant stream of requests from customers, then your earnings are going to suffer. With Uber, you have the option to opt into UberEats and deliver food as well as people — which means you’re essentially doubling your number of potential “pings.”
Second, Uber now allows drivers to cash out their balances instantly to a free debit card they’ll send you upon request. That means you can have immediate access to your earnings — there are no waiting or clearance periods.
#6 — Let a Robot Save You Money
If you’re looking for small rewards with big returns, you’ll love the free tool called Trim.
Trim works behind the scenes to cancel unused subscriptions, find you cash-back, and negotiate your bills. For example, this month I got a $10 credit on my internet bill that Trim’s bot negotiated based on a power outage.
All you have to do sign up, then connect your accounts. Trim then takes care of the rest.
#7 — The Zero-Effort Hack to Optimize Your 401k
If you’re like most people, you decided on your choice of 401(k) funds a while back and haven’t given it much thought since. I get it. Sorting through complex options in your 401(k) can seem daunting.
Instead of trying to do it yourself or even hiring a financial advisor to optimize your 401(k), try using Blooom.
Blooom is a free tool that analyzes your 401(k) in a hands-off way. All you do is link up your retirement account and you’ll get a free analysis of your 401(k) in minutes. You can take this free analysis and make adjustments yourself. If you prefer a hands-off approach, Blooom can manage your 401(k) for $10 a month, with your first month free.
The Wall Street Journal recently named Blooom “one of the best online tools for retirement planning.”
Let Blooom tell you how you’re doing. Start the sign-up process by entering your name, birthday, and estimated retirement date. Then, let Blooom link up to your 401(k) to get your free analysis.
#8 — Sell Your Stuff
If you have old stuff lying around you’ve been wanting to sell but haven’t because of time, then you’ll love Decluttr.
Decluttr makes selling your stuff much easier than sites like Craigslist, eBay, or other online marketplaces. Instead of you selling items individually, Decluttr buys your stuff in bulk. This saves you the hassle of managing multiple listings, payments, and dealing with buyers.
You simply upload what you want to sell, then ship it to Decluttr for free. Once Decluttr gets your order, you’ll get paid cash within 24 hours.
#9 — Shop For Your Insurance
According to Insurance.com, the average person spends $84,388 on car insurance in their lifetime.
Here are some more car insurance stats that may surprise you.
- 39% of Americans have never shopped for their auto insurance for a better rate.
- Nearly 50% of Americans are unaware they can shop and change insurers BEFORE their next renewal date.
If you haven’t shopped for car insurance in over a year, you’re likely missing out on huge savings.
Try Esurance, which takes only a few minutes to get a quote, to see if you can save. What I like about Esurance is it’s easy to get a final quote, even on your phone. So, with ease you know whether to continue shopping around or if you’re already paying the best price. Time saved!
#10 — Get Money Back On Price Drops You Didn’t Even Know About
If you use credit cards, one of the perks many credit card companies give you is price protection. This allows you to get a refund if something you bought drops in price.
But who actually has time to track purchases, watch for price drops, then claim the refund they’re entitled to?
#11 — Maximize Your Cash-Back Rewards
The average American misses out on over $200 in rewards each year by not maximizing their cash-back rewards.
That means by doing something as simple as choosing the right card you could have an extra $200 in your bank account in 365 days.
(Of course this is only true if you’re paying your credit card bill in full each month.)
To discover how to maximize your rewards through travel, check out my detailed guide: Travel Hacking: The Easiest Way to Take Your First Free Trip. It goes over everything you need to know to get started (and then master) the credit card travel game.
#12 — Get The Investing Returns You Deserve
If you’ve never invested on your own (or have with bad results), it seems intimidating to start. There’s choosing the right investments, the right brokerage, and knowing what type of account is best.
If the complexity of investing has you waiting on the sidelines or you’re not getting the returns you think you deserve, consider trying Betterment.
Betterment uses a goal-based approach to investing. Instead of leaving you to sort through the complexity, Betterment asks you about your goals, then recommends an ideal investment approach.
What’s nice is that unlike other sites with large minimums, you can start investing with Betterment for just $1. Plus, their fees are as low as .25% a year (the average is .63%).
There it is. Spend less, make more, and invest it wisely. And don’t forget to make and follow a budget.
Do these three things well and you can end up with an extra $5,000 in your bank account in 365 days.
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