Just how far are you willing to push yourself to save a meaningful amount of money in a short period of time? Only you know.
But when you want to accumulate a lump sum by a date on your calendar six months in advance, odds are you’ll hit that target if you create a feasible plan.
So, whether you want to save $500 or $5,000, get ready to challenge yourself by spending less or working more. Do it right and you’ll be that much richer a mere half year from when you begin.
6 Months Is a Sweet Spot
There is only so long most people can handle a bare-bones budget or using their spare time to work more. If you only reduce spending or augment your income for a few weeks, you won’t see much of a financial difference for your effort.
“I love the idea of a six-month saving challenge,” says Scott Lieberman, founder of the website Touchdown Money. “It gives you an achievable goal with an end date. And it sounds way less scary than ‘I’m going to be a perfect saver for the rest of my life!’ Keep your goals manageable, otherwise the weight of inevitable failure will crush you.”
Another advantage of this time frame is that you won’t be projecting for accumulated interest, and inflation is unlikely to spike so much that increased costs will throw your plan off.
In addition, you can usually predict what your expenses will be for six months. A goal too far in the future opens up unforeseen circumstances that can negatively impact achieving it.
Establishing a Goal and Tracking Progress
“Embarking on a six-month savings challenge is like training for a marathon,” says James Allen, CPA and founder of the website Billpin. “It’s not about the speed, but the consistency and discipline. I’ve seen individuals who started with saving just a few dollars a week and by the end of six months they’ve built a substantial emergency fund.”
They key to success, says Allen, is setting realistic goals and tracking progress.
“Start by determining how much you want to save at the end of six months, then break it down into weekly or monthly targets,” he says. “It’s like setting up mile markers in your marathon. They give you a sense of progress and keep you motivated.”
To increase the odds that you’ll follow through, write your goal down and send a regular progress report to a trusted accountability partner.
A Dominican University of California study found that when participants did both, 76% either accomplished their goals or were at least halfway to the finish line, compared with 43% of those who just thought about their goals.
Make the Math Work
Imagine you want to save $2,500: You’d need to save $417 each month to meet your goal. That outlay may feel daunting but don’t forget that this is a challenge, which involves stretching yourself.
After evaluating your financial circumstances, you’ll need to decide whether or not the goal is realistic.
Although you may feel prepared to make some radical changes to save that amount of money, you have to make sure that anyone who depends on you is comfortable with the plan — and that it doesn’t jeopardize your overall well-being.
“In the pursuit of a savings challenge, it’s crucial not to compromise on your health, credit rating or essential expenses,” says Allen.
[Related:Wants vs. Needs In Your Budget — How to Tell the Difference]
“Your health is your wealth, and neglecting it could lead to higher costs in the future. A good credit rating is vital for securing loans and other financial opportunities, so skipping bill payments or accumulating debt to save money is counterproductive. Essential expenses, such as housing, utilities and food, are nonnegotiable. True financial wellness is about balance and making informed decisions that benefit both your current situation and your future,” he adds.
Know Your Financial Starting Line
After determining the amount you want to save, figure out how much you can start putting aside without much effort.
List all expenses that comprise your regular budget. Be thorough — and err on the conservative side. Then, subtract the total of those expenses from your income to know how much money you have right now to start socking away.
For example, you may discover that your current budget allows you to save $150 without making any adjustments. Mark that figure down, since you’ll be adding to it to meet your goal.
Sticking with the “$2,500 in six months” example, you know it will take you $417 a month to save that amount. If you can already save $150 easily, you’ll need to save only an extra $267. That money will come from reducing expenses or adding to your income — or a combination of both.
Shrink Your Spending
Review your budget carefully and identify which expenses you can either eliminate or reduce that will add up to how much want to save. Lieberman suggests homing in on the categories where you can cut down without a lot of pain.
“Start eating at home or packing your own lunch and coffee,” he says. “If you’re a big restaurant or takeout person, it’s probably killing your budget. And even cheap convenience store snacks start to add up.”
[READ: How to Save Money When Grocery Shopping on a Budget]
It’s easy to spend a lot on entertainment but you may be able to do without for six months.
“We often default to expensive outings, like drinks with friends, a night of bowling, dinner and a movie,” says Lieberman.
“But you can have so much fun without even touching your wallet. Start by making a list of things that sound enjoyable but are completely free. My friend is a saving maestro, and he loves pick-up soccer, walking in the woods and reading library books in the park. He hardly ever spends a dime,” he says.
Where you can trim is highly personal, though, so focus on the expenses that you truly will be able to slash.
Add to Your Income
If there’s no place in your budget to cut or you’d rather concentrate on earning money to meet your six-month savings challenge, here are some ways to add to your income:
— Request extra hours at your current position. If you work a wage-based job, ask if overtime is available.
— Get a second job. You may be able to secure a part-time position for the duration of your challenge, like working as a barista, server or salesperson before or after your normal work day.
— Try gig work. Less formal than a second job that you have to interview for, you may be able to pick up a side hustle. With gig work, there’s minimal stress, and you can usually pick it up quickly. For example, you may want to drive for a ride-sharing service, babysit or walk dogs.
[READ: 7 Things to Know Before Starting Your Side Hustle]
Although taking on extra work can be tough, keep in mind it’s only for six months. After that, you’ll be back to normal and your regular workload may feel like a breeze when you stop.
Meeting and Exceeding Your Challenge
One of the best ways to meet your goal is to remove any guesswork and unnecessary effort.
“Just as a marathon runner doesn’t think about each step, you shouldn’t have to think about each dollar you save,” says Allen. “Set up automatic transfers to your savings account. This way, you’re saving without even realizing it.”
Another benefit of taking on this type of financial challenge is that it strengthens your muscles. “Once you achieve that six-month goal, the habits you formed will probably stick around,” says Lieberman. You just might be ready for the next round after finishing the first.
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Try This 6-Month Savings Challenge originally appeared on usnews.com
