5 Ways Anyone Can Save $20000 in 5 Years, According To Experts

If you had $20,000 in your savings account, it would be enough to cover your bills for a few months. After all, experts say to save up enough money to cover your bills for 3–6 months in case of an emergency.

But saving $20,000 may seem like a big goal, even if you have five years to do it. Even if you don’t think you have enough money to save for this kind of goal, you probably do. You just need to know where to look.

But there’s still hope if you don’t have any extra money in your budget to save. Don’t worry, either. With a five-year plan, you don’t have to cut back on your extra spending so much that you’re miserable.

To help you get started, here are some solid tips from experts on how to save money that anyone can use to save $20,000 in five years and become financially secure.

Track your expenses to find money you can save.
Katie Jones, a professional money coach for young professionals at Agape Investing, said, “I take my coaching clients through a process of tracking and looking at where all of their money is going.”

“By going through this process, about 90% of my clients can immediately think of about five things they can cut back on or get rid of completely. In some cases, I’ve helped clients save more than $800 a month without having to make more money. It is a very simple process that can save you a lot of money.”

Open a separate account, name it, and set a deadline.
“Open a separate savings account just for the $20,000 and give it a name,” said Julie Ramhold, a consumer analyst with DealNews. “That way, when you check your accounts online, you’ll see the name and remember your goal.”

“Then, set a deadline and a reminder on your phone, computer, or wherever. Count down for a long time if you want to. In either case, make sure you always have a clear picture of how your goal is going and how much time you have left to reach it.”

Ramhold said, “If you look at it this way, you’ll be able to keep your savings on track, and seeing the progress will make it easier to stick to your plan.”

But it can be tempting to spend the money you’re putting towards your savings goal. Elizabeth Chiang, M.D., Ph.D., owner of Wealthy Mindset and a life and money coach, had this idea: “Start a new bank account somewhere other than where you usually do your banking and where there are no fees. Ask your employer to put some of your pay into this new account by direct deposit.”

Break the $20,000 goal into manageable savings amounts.
If your budget is already tight, saving $20,000 may seem impossible. But if you break it down, it may seem much more doable.

L.J. Jones, the founder of Developing Financial and a financial planner, said that saving $4,000 a year, or about $333 a month, is the easiest and most obvious way to get ahead. “Set up an automatic transfer so that when you get paid, $333 will go straight into a savings account before you have a chance to spend it on something else. If you pay yourself first, saving will be much easier.”

Start a temporary side hustle for additional income.
If you can’t find the money in your budget to save the amount you need to save each month to reach your $20,000 goal in five years, you may need to get a side job.

L.J. Jones, a financial planner, said that this could be a part-time job like driving for Uber or Lyft, making deliveries through DoorDash, or any of the many other side jobs that are available in our economy. “You only have to work long enough to earn the amount of money you need to save to get to $20,000. This lets you keep up a certain way of life with your main job, and the side job lets you save money.”

Sell your junk.
You can also put extra money in your savings account by selling things you don’t need. You’ll also get rid of things you never use at home, and all you’ll have to give up is your time.

Tanya Peterson, a vice president at Freedom Financial Network and an expert on personal finance, says that you should clean out your house and garage to find things you can sell. You can list things on Facebook Marketplace, Mercari, eBay, or even Craigslist, but Jeff Kronenberg, founder and president of Imagine Wealth Group, suggests going to a local thrift store or flea market to sell them.

Swap Out Services
You don’t have to give up anything you really like, but it might be a good idea to switch services. Kronenberg suggests, for instance, that people switch from cable TV to Internet TV. “Cable TV costs around $100 a month on average,” he said. “If you have a smart TV, you can get TV over the internet for almost 50% less than if you don’t. That’s a savings of $600 per year, or $3,000 over five years.”

Peterson has a suggestion if you’re worried about not being able to watch local channels. See if you can get a cheap antenna that will let you watch broadcast TV in HD,” she said.

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