In 2024, one of my financial goals is to save an extra $5,000. Specifically, I want to put $5,000 more into my brokerage account than I did in 2023. That’s a lot of money, but I’m hopeful I can accomplish my financial goal and make the investment by the end of 2024.
My plan for finding an extra $5,000 to invest is a simple one, and it’s one I feel pretty confident will work out. Here’s what I’m going to do to find the funds.
My plan for saving an extra $5,000 in 2024 is to increase my income by $5,000. Here’s why I’ve chosen this route, instead of cutting my spending.
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If I break my $5,000 goal into a smaller monthly goal, to hit my target I need to save $416.67 per month. Now, I could try to cut that amount from my spending, but it would be really hard. I don’t spend that much on dining out and that makes up a good chunk of my entertainment budget. I also don’t have a car payment I could get rid of and I can’t easily change my fixed expenses, like my mortgage.
Basically, cutting my spending by $416.67 a month would be challenging and might involve making some lifestyle changes I’m not happy with and are hard to stick with throughout the year. I could try to do that, but I’d probably be setting myself up for failure since I’d have to force myself to do the right thing every month.
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Rather than doing that, it’s easier to put in some extra hours at work and make an extra $416.67 each month. This is especially simple for me because I’m a freelancer and I have more control over how much I work. But, it’s actually doable for many people.
Side hustles earn $483 a month on average, so you could pick up a side gig if you also wanted to save $5,000 and boost your personal finances. Or, if you make $20 an hour and can work some overtime at your job and earn time and a half, you’d only have to work an extra 13 hours during each month — or just over three hours extra a week — to hit your target.
Doing a few extra hours of work a month can be a lot more sustainable than stripping all of the fun out of your life. And if you have a more modest goal than saving an extra $5,000 — like saving an extra $1,000 — you’d have to do even less.
You could also ask your boss about getting on the promotion track, try to negotiate a raise at your performance review, or look for a better paying job to increase your income without putting in those extra hours.
Could increasing your income help you accomplish your financial goals?
The reality is, making long-term changes to spending habits can be hard, especially if they involve continual small sacrifices. It can be far more beneficial to find ways to increase your income — especially if you can do so by expanding your skills or negotiating for a raise.
Just be sure when the extra money hits your bank account, that you route it to your goals so your efforts help you accomplish the things that matter to you.
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