Some financial gurus like Dave Ramsey recommend having a $1,000 emergency fund, but that money doesn’t cover much in today’s dollars. For example, one major car repair may be over $1,000, or you may have a medical emergency that costs more than that. So, if you want to increase your emergency fund quickly, raise money to pay for a vacation in cash, or pay some of your child’s college tuition, learn how to save $5,000 in 3 months and reach your financial goals.
What You Need to Know to Save $5,000 in 3 Months
For most people, this is an audacious goal. If you break it down, you’ll need to save $1,667 a month or $420 a week. If that number still feels overwhelming, break it down further. You’ll need to save $55 a day. The daily number feels more manageable. Here’s how to save $5,000 in 3 months.
Get Extra Work
If your employer offers overtime, take it. Overtime is the best way to make money because you’ll likely earn time and a half or double time.
If you don’t have the option to work overtime, find a side hustle. For example, you might consider some of the following jobs:
- Dog walker
- Uber or Lyft driver
- Door Dash worker
- Instacart worker
- Pet sitter
- Cake baker
Donating plasma pays surprisingly well. You earn more the first month you donate, so you could earn up to $1,100 in the first 30 days (Money). For subsequent months, you’ll make $50 to $75 per time you donate, and you can donate at least twice a week.
Have a Pantry Challenge
Do you have extra food in your freezer and pantry? Most of us do. Why not have a pantry challenge depending on how much excess you have? If you usually spend $200 a week on groceries, challenge yourself to use what you already have at home and only spend $75 a week buying fresh produce and other perishables.
If you can have a pantry challenge for a month, using the numbers above, you could save $600 in 30 days. Some people have enough food stocked up that they could have a five or six-week pantry challenge.
Change Your Grocery Shopping Habits
In addition to, or instead of, a pantry challenge, you can also temporarily change your grocery shopping habits. For example, if you buy individually packaged chips for the kids’ lunches, switch to buying a large bag of chips and individually portioning them yourself. You could save several dollars this way.
Likewise, you can practice reverse meal planning. Rather than going to the store with a list of foods you need, shop the clearance section. If you find clearance meat, buy that and make a meal around it. If tomatoes are on clearance, buy a lot of them at the low clearance price and make a recipe like Tomato Pie. You can cut your grocery bill drastically by only shopping for clearance items and reverse meal planning.
Have a No Spend Week
Another idea is to have a no spend week. During this week, you do not buy anything “extra.” Yes, you can buy gas for your car, but no, you can’t buy a movie ticket to see a show with a friend. You also try to avoid spending money whenever possible. For instance, you choose to stay home instead of driving your car to conserve gas.
No spend weeks don’t have to feel like deprivation. You can challenge yourself to see how much you can save. You’ll likely surprise yourself!
Trim the Fat in Your Budget
Everyone has a little (or sometimes a lot!) of fat in their budget. While trying to save $5,000, cut all the fat you can. Consider the following categories:
- Subscription services such as streaming services, magazines, games, and meal services
- Treats such as eating out, buying coffee, getting candy from the vending machine, etc.
- Clothes, especially if you have a closet full of them
Renegotiate Your Interest Rates
If you have credit card debt, try calling the company to see if you can lower your interest rate. When I used to have credit card debt, I followed the script to request a reduced interest rate from the book, I Will Teach You to Be Rich. I was successful about half the time.
Utilize Credit Card Rewards
Do you get credit card rewards? If so, redeem them for cash back that can go toward your goal of saving $5,000 in 3 months. If you’ve let the reward points build for some time, you may have a couple of hundred dollars in cash back waiting for you.
Save Certain Bills You Receive
If you still pay using cash, pick a denomination to save every time you receive it. For instance, choose $5 bills. When you get $19 back in change including $15 in five-dollar bills, that $15 automatically goes toward your $5000 savings goal.
Additional Temporary Measures You Can Take
If you take these drastic steps, reinstate them once you’ve saved your $5,000.
Adjust Tax Withholding
If you adjust your tax withholding, you can receive more of your paycheck each week, which you can save towards your goal. Be advised that utilizing this strategy may cause you to owe money when you file your tax return. Before taking this step, check with your tax accountant.
Stop Contributing to Your Retirement
If you’re in dire need, you may want to stop contributing to your retirement for three months while you try to raise money. This should be your last resort and not something I recommend unless you’re facing a significant bill you must pay off.
If you need money fast or want to build your emergency fund, you may wonder how to save $5000 in 3 months. Although this type of challenge isn’t easy, when you utilize the strategies given here, you will find you can reach your goal.
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Image and article originally from www.savingadvice.com. Read the original article here.