A Simple Plan for Saving Up a $2000 Fun Fund

By Amanda Gokee on 30 January 2017 1 comment

What are your big plans for this year? Buying a house? Going back to school? Or simply taking that dream vacation? Big purchases require thousands of dollars, but the good news is there are simple steps to ensure you will meet your goal.

First, establish a clear plan and set goals that are attainable. How much money do you need to save, and when do you need it? The formula for saving money is simple enough: earn more, spend less. Here are some ways that you can do both of those things to put several thousand dollars extra into your bank account this year!

Ask for a Raise

If you have a good track record at your job and you've never gotten a raise — or it's been awhile since you did — this could be a good time to set up a meeting with your boss. Normally, employee evaluations are carried out annually, so if you're coming up on the one-year mark, this is an especially good time to bring up the subject.

People often feel uncomfortable asking for a raise, but it's a normal and natural conversation to have. However, it's critical that you come to the table prepared.

When you sit down with your boss, be clear about what you're asking for and why. Get specific about how much you want to make. The average annual raise in 2017 is expected to be 3.1% according to a WorldatWork Salary Budget Survey. Stellar performers may earn more.

If you think you fall into the latter category, you should have strong evidence of why you deserve an above-average raise. Cite examples of successful projects you've managed, or great sales you've driven. You may also want to check out the average salary for your position in your industry. If you're being paid below market rate, add that to your argument.

Of course, once you've secured a raise, be sure to save it instead of spending it. Let's say you're earning $3,000 a month and you get a raise of 3%. That translates into an extra $90 a month that you can put into your savings account. Make it easy on yourself by setting up a direct deposit of that amount into your savings account. That way, saving becomes automatic. (See also: 8 Money Moves to Make the Moment You Get a Promotion)

Seek Out Non-Traditional Sources of Income

If you're trying to earn more, it can also be helpful to augment your income beyond what you're earning every month in salary.

Luckily, with the sharing or "gig" economy, there are many new ways to earn money outside of your 9-to-5. These earnings can add up fast, and often this "work" is very flexible and can fit in easily with your schedule. (See also: 5 Websites That Can Seriously Pad Your Pockets)

Offer a Room on Airbnb

If you have a home or apartment with extra space, consider listing your space on Airbnb or another short-term rental website. Prices vary dramatically depending on where you live and the quality of the space you're renting. For instance, in Los Angeles prices range from $17 a night for a small, basic room to more than $1,000 a night for use of a whole luxury home. The average price of a private room is $73.

Let's say you'll rent a spare room at that average rate for 10 days per month. That would equate to monthly earnings of $730. Subtract taxes, cleaning supplies, and any other materials you need to buy to keep up with your guests, and you should still clear around $500 a month.

Keep in mind it will take some time for you to accumulate positive reviews, and certain times of year may have slower traffic than others. Also, many cities are regulating short-term rentals, which may impact how much money you can expect to make. Investigate the rules, then see how much you can make.

Become a "Tasker" on TaskRabbit

If TaskRabbit exists in your area, this is another great way to earn extra money toward your savings goal. Once you've been approved as a Tasker you can view the gigs people are offering. They can be anything from running errands, to waiting in line for a restaurant that doesn't take reservations, to making deliveries or helping plan a wedding.

You get to set your rates and see tasks that correspond. If you set it lower — at say, $10 an hour — you may find more jobs than if you set it at $30 an hour. You choose which tasks fit into your schedule and how many jobs you want to take on in a month.

Just by doing three two-hour tasks at $20 an hour, you could earn an extra $120 a month. (See also: Can You Really Make a Living in the Gig Economy?)

Drive for a Ride-sharing Company

Signing up to drive for Uber, Lyft, or any other ride-sharing company is another way to use the gig economy to earn some extra money. You'll need a four-door car in most cases, and you must be at least 21 years old with a clean driving record and car insurance.

Uber is considered to pay better than other companies. An Uber study showed that its drivers in the company's top 20 markets average $19 an hour. Work 15 hours a week and you could gross $1,140. You'll have to pay taxes, vehicle upkeep, and insurance out of that. But you can work as much as you want, whenever you have the time, so it can be a good way to rack up several thousand dollars in just a few months.

Spend Less Money

There are a lot of incidental expenses that are easy enough to ignore in your day-to-day routine, but when you closely examine your monthly spending, it's often surprising just how much money these expenses eat away. Reduce them as much as possible to put more of your money into savings.

Kick the Coffee Shop Habit

This is a typical example, but it's worth mentioning because working Americans spent an average of about $21 a week on coffee in 2013, according to a survey by financial staffing firm Accounting Principals. The cost to make a cup of coffee at home is around 50 cents. If you drink two cups a day, that works out to about $7 a week. Over the course of a year you could save nearly $730 by making a habit of brewing your coffee at home.

Cut the Cord

Look at trimming bigger expenses, too. For instance, if having a landline is not essential for your work and you can use your cellphone, this could be an easy place to save $15–$30 a month. If you throw cable TV into the mix, you're looking at a savings of anywhere from $20 to $100 or more, depending on the package you have. Those savings can help you get to your goal quicker while minimizing the extra work you may have to take on. (See also: 8 Affordable Alternatives to cable TV That Will Keep You Entertained)

Buy Necessary Household Items in Bulk

Unlike going to Starbucks every day, there are some expenses that simply can't be avoided. Make a list of the things you buy every month that are absolute necessities. Think of things like toilet paper, cleaning supplies, soap, and food staples that you always need to have on hand. These are prime items to buy in bulk, especially if you have a family.

You can save 10–70% on certain bulk items, but you need to be an astute shopper and judge how much you'll really use to figure out if the items will actually save you money in the long run. It's not a bargain if you end up having to throw out expired products or rotten food.

Track Progress in Writing

One final tip: It's important to write things down when you're serious about saving. Writing down your goal will help you to mentally commit to it.

See also: This Simple Journal May Be the Fix for Your Finances

Record both your savings and your expenses, so you can identify areas where you're doing well and areas where you could improve. This will let you check in and re-evaluate every month to make sure you stay on track.

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Guest's picture
Jeff | VTX Capital

With the gig economy, you could easily have $2,000 saved mid year if you had the time to dedicate to it. These are great ways to obtain a savings goal.

Guest's picture
Robby Buser

That would go toward my small business