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Do you want to save $5,000 in 2021? 

As with any savings goal, it’s totally possible- as long as you have a plan. 

You’ll need to know:

-What you’re saving for

-When you want to have $5000 saved

-How much you’ll need to save each month to get there

We’ll also review how you can speed up your plan to make sure you get there on time. 

I spent years struggling to save any money (my savings account was usually $0), but with a few changes I found myself easily saving over $10,000 (and it’s still growing!). 

The biggest lesson I learned along the way? The main difference between a ‘spender’ and a ‘saver’ is having a savings plan. That means knowing what you’re saving for, how much you want to save, and what you’ll be setting aside each and every month to get there. 

Let’s get you started on a savings plan that takes your savings account where you want it to be 🙂

Here’s how you can save $5,000 in one year!

How long does it take to save $5,000?

If you want to save $5,000, here’s how much you’ll need to save every month:

Save $5,000 in one year: $417 a month

Save $5,000 in 6 months: $833 a month

Save $5,000 in 3 months: $1,667 a month

What can you do with $5,000 in savings?

There’s a lot you could do with $5,000 in savings- some examples are:

-Buying a used car

-Taking a vacation

-Renovating your home

-Paying off a credit card

-Saving up for a rainy day

The more important question is: what do you want to do with $5,000? Or how could $5,000 get you closer to achieving your financial goals?

If you feel like there’s a million things you could do with that much money and you’re not sure how to prioritise, here’s the simple plan I use:

1. The first thing to save is an emergency fund, which is savings for unexpected expenses, like losing your job or your car breaking down. You should have 3-6 months of worth of living expenses saved here (note: these should be necessary living expenses only, so think rent and groceries, and not entertainment or random shopping). If you are also paying off your debt, you can consider saving less than that, like $1,000- but remember to add to your emergency fund once you’re debt-free.
2. Once you’re not worried about an emergency popping up, you can start to save for expected expenses, in sinking funds. You can have many sinking funds for multiple items you’re saving up for (like a down payment on a home or tuition at school). 
3. If you are prepared for both unexpected and expected expenses, you can start to save for retirement. It’s never too early to start- the sooner you do, the more time your savings have to grow (thanks to compound interest!). 

So, where are you at in your savings journey? Take a moment to reflect and decide what you should save for right now. 

How you can save $5,000 in a year

To save $5,000 in a year, you’ll need to save $417 every month. 

Here’s how you can make a plan to save $417 a month:

If you haven’t already, start by making a monthly budget.

This is as simple as adding up your monthly income, and subtracting all of your monthly expenses. 

P.S.- if you’ve never made a monthly budget before, check out our monthly budget template for beginner’s here! It has all of the categories you will need to get started. 

Do you have enough leftover to save $417 a month? 

If you do, that’s fantastic! Work this amount into your budget each month, and transfer it into a savings account. Remember what you’re saving this money for, and in 12 months time, you will have reached your goal!

If you’re not sure if you can save that much each month, you may be surprised how much you can save by reviewing your spending habits.

How to save money on food every month

When I first started to save money, I knew I needed to completely change how I spent money on food. I thought that my spending habits were ‘normal’, but it turns out I was wasting a ton of money on dining out. 

Think about it- even just 3 $20 dinners out a week adds up to $240 a month. And that’s before grabbing lunches, going out for drinks, or buying a coffee each morning!

When each purchase feels so small, it’s hard to believe how quickly it all adds up.

Take a look at your debit or credit card statement for the last month and add up your total food spending- the total may surprise you!

Here are the changes I made to save over $500 a month on food:

-I only ate out for dinner on Fridays, cutting this habit back to once a week (monthly savings: $160)

-I made double batches of dinner at home, and always brought the leftovers to work the next day for lunch (monthly savings: $300)

-I started to make my coffee at home instead of going out to buy one (monthly savings: $40)

–Bonus tip: I also had a habit of buying breakfast with my coffee, too, which really added up every day! I started bringing my own bagel (or bread!) to work with me, and kept some peanut butter there. It was crazy simple way to save an extra $100 a month!

My total monthly savings on food: $600

As you can see, this is even more than the $417 needed a month to save $5,000 in a year.

If you want to start cooking at home now, I highly recommend signing up for $5 meal plan. 

For $5 a month, they send you affordable, healthy, and delicious recipes that you can make at home (seriously, each meal only costs $2 a person on average!). This is a genius way to always stay inspired to make your food at home!

Check out $5 Meal Plan here

Make a small investment in yourself by picking up some meal prep containers, too! A set of cute containers can make packing up leftovers a little more fun 😉

How to save more money on your monthly bills

If you want to save more money, it’s a perfect time to think about your monthly bills.

Are you over-spending on any of your recurring expenses?

Do you have any that you forgot you’re paying for, or just aren’t using at all?

Make a list of your monthly bills and see if there are any you can get rid of or cut back on.

For example, if you have a fitness app on your phone that you’re paying $20 a month for, but you haven’t used it in 3 months- you can consider cancelling it.

Or if you’re paying $80 a month for your phone but you think you can get a cheaper plan with a different provider, you can call your current provider to negotiate a cheaper plan.

If they think you are cancelling, they may offer you a lower monthly price! If they don’t budge, you can cancel and start using a cheaper plan with a different carrier.

The alternative to doing all of this yourself is to sign up for Trim!

Trim is an app that connects to your debit or credit cards and helps you to identify where you can save more money.

Trim can help you to:

-Cancel subscription services you’re no longer using

-Track your spending habits

-Negotiate your bills for you!

Check out Trim here!

Use a savings tracker to save $5,000 in a year

Another great way to save $5,000 this year is to track your progress as you go. Saving money is easy when you can see your goal! 

Check out our collection of savings trackers– including this one that keeps you on track to saving exactly $5,000. 

Print it out and keep it where you can see it, like at your desk or in your budget binder. If you have a note-taking app on your tablet or phone (like Goodnotes, for example), you can also easily use any of our trackers on the app. 

How to save $5,000 with a 52 week challenge

A 52 week challenge is a savings challenge where you save money every single week, in order to save as much as possible at the end of the year. 

If you wanted to save $5,000 in 52 weeks, you would need to save $97 a week. 

Here is our 52 Week Savings Challenge printable you can use to get started now:

How to save $5,000 in a year with envelopes

Have you heard of the 100 envelope challenge yet? 

This money-saving challenge has been gaining popularity online, and it’s been helpful for some in reaching $5,000 in savings.

The rules are simple- take 100 envelopes, and number them $1-$100 (write $1 on the first envelope, $2 on the second, $3 on the next, and so on until you’re at the 100th envelope). 

Shuffle your envelopes and keep them in together in a box or container. 

Every day for 100 days, take out an envelope- whatever number on the envelope is the amount you will stuff in that envelope to save. 

After 100 days, you will have saved $5050. 

This is a fun way to kickstart a savings journey, and to build a habit of saving regularly.

Important: make sure you shuffle your envelopes well, so that you’re less likely to pull out two numbers that are close together in a row (ie. pulling out envelope 90 on the first day and then envelope 91 on the second). 

If you do pull out two higher envelopes in a row and worry you can’t afford it, simply skip the day or save the amount you can afford that day. As long as you are saving money, you are moving in the right direction! Perfection isn’t necessary in your savings journey, especially if it gets in the way of affording necessities in life, like food or rent. 

You could stretch it out and pull out an envelope once every 2 days instead of every day- this would still get you to $5,000 in under a year!

What do you want to save $5,000 for this year? Let me know in the comments- I’d love to hear what goals you’re working on!

Want to save more money? Here are my favourite money-saving resources:

Swagbucks: Swagbucks is one of my favourite ways to earn free gift cards online! (it takes less than a minute to sign up) and start to earn rewards for things you’re already doing, like surfing the web and shopping online. You’ll also be rewarded for answering surveys & watching videos! Your rewards can be redeemed for gift cards at popular retailers like Amazon, Walmart, and Starbucks.

Drop: is a rewards program that links to your debit or credit card- you’ll earn points every time you shop at your favourite retailers, which can be turned into gift cards. You can also earn points by taking surveys and playing games. Sign up for Drop here!

Trim: Trim is an app that constantly works to help save you money. Here’s how it works: once you link your credit or debit card, Trim helps you to cancel old subscriptions, set spending alerts, check how much you’re spending in certain areas, and automatically fight fees. They can even negotiate your monthly bill costs for you! Sign up for Trim here!

$5 Meal Plan: $5 Meal Plan is a convenient, affordable way to save money on food! It’s only $5 a month for 30 days worth of delicious recipe ideas- that only cost about $2 a person for every meal. You can dine out less while making at-home meals that are affordable. Sign up for $5 Meal Plan here!