Figuring out how to save 5000 in 3 months can be a challenge, but it is possible! And with lots of chatter on the interwebs about a possible recession, many of you may be wondering how you can boost your cash reserves in the event of an economic downturn. Whether you're saving money for a down payment on a home, or you want to pay off debts, saving money doesn't have to feel debilitating.
But having a plan for your money is essential. Without one, you can easily get lost in your finances and lose the confidence you need to save money. In this post, I'll give you the best ways you can save money quickly and reach your $5,000 goal in a few months. Let’s dig in!
Create a Budget and Plan
Before you start deciding what to cut out and which areas to decrease spending, you need to take a look at your budget and create a plan for your money.
A budget is a critical tool to help you better manage your money and find out where you might be overspending.
The best type of budget is the one that's easiest for you! Some people prefer a zero-based budget, while others might like the simplicity of the cash envelope system. You want to set a realistic budget that you can follow and stick to long term.
When creating a budget, it's vital to look at your overall income vs expenses. If your income is less than your expenses, you'll need to find areas where you can cut back and spend less.
If you want to save $5000 in 3 months, you'll need to save $1,667 per month, $416 per week, or $60 per day.
While these numbers might seem overwhelming at first, by sticking to your financial plan you can reach your goal faster than you think.
If you're feeling stressed about your money and want to give up, try to remember why you started in the first place. Are you saving for a down payment for a home? Imagine yourself and the feeling of being approved for the home of your dreams. This can work wonders in helping you stick to your budget and stay on track with your finances.
Pick up a Side Hustle
Side hustles can be tremendous assets to get your finances in check. The additional income can be used to pay down debts, or you can stash it away for the future.
Managing your expectations is important when starting a side hustle. You can't expect to make $10k a month in your first month starting a side hustle.
- That said, there are tons of different side hustles you can start to make an extra $1,000 a month or more.
- For example, driving for Uber, delivering food with Doordash, working as a virtual assistant, or even starting a freelancing gig can all be amazing ways to boost your income.
- Some side hustles can even turn into a full-time job! For example, I know many bloggers and freelance writers who started freelancing and became full-time business owners. (Here's how much money I've made blogging over the last decade.)
Additionally, you might consider picking up a part-time job.
While nobody wants to work extra hours, this can be a guaranteed way to make extra money so you can reach your goal in three months. If you have a job with flexible hours, you might even consider adding a few hours to your schedule each week.
While some people consider “hustle culture” toxic, I believe you can reach a healthy balance of working to increase your income without burning yourself out. It's all about maintaining a balance and taking some time for yourself when needed.
Sell Things Around Your Home
For example, if you have any clothes, electronics, or valuables that you don't need – consider listing them on Facebook Marketplace to get some quick money.
You'll be surprised how much money you can get for random things around your home, so start looking!
Want to take it a step further? You might consider selling your car for some quick cash! In most cases, you can reach your goal just by doing this.
If you're looking for a quick way to cut down your monthly expenses, refinancing your existing debts can be a great option.
This is often one of the most powerful ways to cut down your expenses because of how impactful it can be.
For example, refinancing your home can cut down your housing costs tremendously – which allows you to save more money each month.
There are many different debts you can refinance including:
Just be sure to keep in mind that extending the life of your loan could mean you end up paying more in the long run.
It's also critical to look at the interest rate you'll end up paying, as it can be very costly in some circumstances.
Cut Unnecessary Expenses
In today's materialistic world, we are pushed to spend more and more money, but it doesn't have to be that way!
For most people, there are tons of reoccurring subscriptions that you aren't aware of that can be costing you money each month that you don't use.
For example, gym memberships, music subscription services, or streaming services can all be reduced or eliminated if you want to save $5000 in 3 months.
These subscription fees can amount to hundreds of dollars each month.
Aside from that, browse over all of your transactions and try to identify small expenses that you can easily cut out.
Do you notice that you have a shopping addiction and spend tons of money on clothes? (Here's my own no-shopping challenge journey for 2023.)
Small expenses and unnecessary spending can quickly add up and stall your savings journey – so be on the lookout!
Here are some other expenses to look at:
- Cable bills – do you really need TV?
- Trips to your local coffee shop
- Restaurants and entertainment costs
You're not going to build long-term wealth by cutting out life's little luxuries, but if you're looking to do a small, short spring to save up cash quickly — these can be very effective.
Reduce Living Expenses
Your living expenses are often some of the most expensive items in your monthly budget.
Read that sentence above again.
For example, your housing, transportation, and food costs can amount to over 75% of your spending. You need those things to live, of course, but reducing these costs can add up to some of the biggest savings.
By reducing these expenses, you can potentially save thousands from your budget each month so you can reach your savings goals.
For example, take a look at your monthly rent or mortgage payment. If possible, moving homes can be an amazing option to shave off some of your housing costs. While not everyone will want to move, this is one way to drastically reduce your spending so you can save money.
For transportation, it's important to consider not only the cost of your car payment, but also car insurance, fuel, and routine maintenance. If possible, see if you can find ways to reduce the amount of driving you to do or eliminate it all together by utilizing public transportation.
Lastly, take a look at your grocery budget. If you're frequently eating a steak dinner, it might be time for a change if you want to save $5,000 in 3 months.
While you don't have to live off of Ramen noodles and tuna, reducing your grocery budget can have a pretty big impact on your savings goal.
Try an Envelope Savings Challenge
An envelope savings challenge can make saving money fun!
There are tons of different challenges you can do, but a 100-day challenge would be appropriate to help you reach your goal. It works by creating envelopes and numbering them from 1 to 100. Each day, you'll randomly select an envelope and place that amount of money into the envelope, and set it aside.
After 100 days, you would reach your savings goal.
While there are a few challenges that come with a savings challenge, I think leveraging tactile, out-of-the-box savings methods can be a fun and effective way to save money. With everything being so digital nowadays, it can be nice to have something you can see, in my opinion. Here's a bit about other money-saving challenges, here.
Use Cash Back Apps
Cash-back apps can be simple ways to save money on your day-to-day expenses. No, you won't save thousands each month just by using cash-back apps – but it's possible to save a few hundred dollars here and there.
For example, using apps like Ibotta or Fetch can help you save money on each trip to the grocery store or when you shop online.
There are also some apps you can use to save money at the gas station.
Cash back apps aren't life-changing and they won't make you reach your savings goal on their own, but it's one step in the right direction. (Here are all the money-saving apps I have used and like.)
Claim Banking Welcome Bonuses
Did you know there are tons of different bank accounts that offer lucrative welcome bonuses when you open a new account and complete a few basic requirements?
Some bank accounts offer over $500 in free money just for opening a new account and setting up a direct deposit to it. (I used this strategy to help knock out $8,000 of debt in 90 days, so I know this works. It just takes some time to set everything up.)
By opening a couple of new accounts, you can quickly earn almost $1000 in free money. Who could say no to that?
Just be sure to check the terms and conditions of each bank account offer to ensure there aren't any hidden fees that come with it.
Claim Credit Card Bonuses
Credit card companies are known for offering crazy sign-up bonuses, just like banks.
There are many credit cards that will offer $200 in free cash when you spend $500 in 3 months, which for most people is typical, especially if you put all expenses on the card.
Just be sure to remember that opening a new credit card will affect your credit score, and you should never spend money that you can't afford to pay back – but otherwise, they can be great tools to help you reach your financial goals.
Cash Out Credit Card Rewards
If you've been using a credit card for some time, there's a strong chance you have some unredeemed rewards that can be converted to cash.
This can be an easy way to get money so you can reach your financial goals.
While you might not have a fortune to redeem, every dollar counts when you're trying to save $5000 in 3 months.
Adjust Your Paycheck Withholdings
If you're wondering how to save $5,000 in 3 months easily, one super simple way is to adjust your paycheck withholdings so you can see more of the money you make.
You can have your employer automatically set aside money that gets deposited into your savings account so you don't have to do anything.
Automating your finances is a tremendous way to save extra money without having to think about it.
Another route is to adjust how much taxes are set aside from your paycheck. You might be able to lower your tax withholdings and effectively increase then the amount of each paycheck.
Now, when you do this, you might not be setting aside enough money for taxes, so you need to consider this come tax time.
Use a High Yield Savings Account
High-yield savings accounts can be simple ways to increase your income without any risk. HYSA accounts are 100% safe. These accounts can pay much more interest compared to a traditional savings account and most of them have no fees.
Build an Emergency Fund
Having an emergency fund is a great financial move you can make to ensure you aren't forced to rely on credit when an unexpected expense occurs.
Remember, there will always be emergencies at some point. It's not a matter of “if”, it's “when”.
By having an emergency fund you can have some cash handy to pay for hospital bills, car repairs, or other expenses that you don't expect.
Negotiate a Pay Raise or Find a New Job
With inflation skyrocketing, the need for a pay raise is higher than ever. If you've been at the same pay rate for a few years and have performed well at your job, it might be time to ask for a raise or find a new job.
When it comes to asking for a raise, you should always aim to have concrete numbers that back your performance at work. You should also do your research on other similar positions to see where your salary stands compared to others.
Alternatively, if you don't feel comfortable asking for a raise or you desire a change or pace at work – finding a new job altogether might be the better route.
By finding a new job, you can use your past performance to negotiate a higher salary that can help you reach your savings goals. It's not uncommon to earn 25% to even 50% more working a new job.
Nobody likes job searching, but it's an amazing way to increase your income without doing any additional work.
But what if you can't find a new job or land a raise?
It might be time to learn some new skills. There are tons of remote jobs that pay decent money without needing a college degree to get started. You can learn tons of unique skills online thanks to the power of the internet – so it's time to start learning!
Shop Smart at the Grocery
Your grocery bill is often one of the higher monthly bills you have, and there are several ways you can easily save money on each trip. (See above paragraph about inflation – this impacts your grocery spend, too!)
- First, coupons can be a great method to cut back. Most stores now have digital coupons so you don't even need to break out the scissors! It's possible to save 10% or more just by using coupons.
- Second, you can shop for generic options. Generic groceries can be just as high quality as name brand options but can cost 20% less. It's an easy way to reduce your spending without a ton of work.
- Third, shopping at a discount grocery store can help you save even more. In many cases, discount grocery stores will offer similar products at a fraction of the price so you can easily save money on your grocery bill each month.
- Lastly, make a grocery list before you go. I can't stress how important this is to help you spend less. Without a list, grocery stores are strategically constructed to maximize the amount you spend. By sticking to your list, you'll be less likely to splurge on things you don't need.
Closing Thoughts on How to Save $5000 in 3 Months
Saving $5000 in 3 months might seem challenging, but it doesn't have to be!
By adjusting your spending habits, sticking to a budget, and increasing your income, you can reach your savings goal faster than you think.
It all starts with having a plan for your finances and staying motivated. So what are you waiting for? Need more resources or want to try an accelerated timeline? Here's how to save $1000 in a month. Want to slow your roll? Here are all the little ways to save $20k in one year.
Lauren Bowling is the creator of Financial Best Life. Writing about money since 2012 (formerly as L Bee and the Money Tree), Bowling is an award-winning blogger and money and real estate expert whose advice has been featured on CNBC, Forbes, CNNMoney, Elite Daily, Business Insider, Redbook, and Woman’s Day Magazine and more. After selling the site to a division of The Motley Fool in 2019, Bowling is now back as the owner and primary voice behind FBL and is excited to continue educating elder millennials everywhere about how to afford their best life.