How An Extra $1000 Per Month Can Change Your Life, And How To Get Started

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how to save 1000

Looking 30 years into the future isn’t nearly as exciting as buying a new iPhone or leasing a Range Rover. Instant gratification feels good in the moment and buying new things might give you a momentary endorphin rush. But once you learn how to save and invest $1,000 every month, your future gets a lot brighter.

How bright? Let’s just say the impact of investing an extra $100, $500 and $1000 per month over 30 years will be immense.

The numbers below have been calculated using an average annual return of 8%. Most ETFs (VTI, SPY, etc) will get you — and historically have gotten — that or more over 30 years.

The exact numbers of investing extra money per month are as follows:

  • Investing an extra $100 per month yields roughly $149,000 in 30 years.
  • Investing an extra $500 per month yields roughly $745,000 in 30 years.
  • Investing an extra $1000 per month yields roughly $1,500,000 in 30 years.

How To Save $1000 Per Month

It’s easy to save money when you’re a high earner who makes a lot of money. But how can someone who makes less money save $1000 per month while also being able to afford necessary living expenses?

The first step in understanding how much you can save is developing a budget. A simple way to budget is the 50/30/20 Rule. We’ve gone in-depth on the 50/30/20 Rule before, but here is a basic break out of how you can use it to help you save an extra $1000 every month.

  • 50% of your paycheck goes to essential expenses.
  • 30% of your paycheck goes to things you want (like the aforementioned iPhones and Range Rover leases).
  • 20% of your paycheck goes to saving and investing.

Some people might use gross pay towards their 50/30/20 budget, but if you’re not contributing to a pre-tax 401K plan then using net pay will allow you to know what your true savings rate is.

For example, if you make $50,000 per year while living in Florida, your take home pay will be $41,880 per year, or $3,490 per month. If you are adhering to the 50/30/20 rule, your budget will look something like this.

  • Net Pay: $3,490 per month
  • 50% to essentials: $1,745
  • 30% to wants: $1,047
  • 20% to saving/investing: $698

When looking at that scenario, your savings and investing is falling short of your $1000 per month savings goal. You have two choices. First, you can try to saving more money and live off less. That may or may not be possible depending on your situation. In some cities in the U.S., most people need a side income just to pay rent.

The second choice is to find a side hustle that will earn you an extra $500 per month.

Online Side Hustles To Help You Save $1000 Per Month

According to recent data from Canva and Fiverr, these are the 10 highest paying online gigs on Fiverr in 2021.

  1. Website Design – $700
  2. Social Media Manager – $675
  3. Proofreading and Editing – $660
  4. CV, Cover Letter and Resume Writing – $600
  5. Website Building – $580
  6. 3D and 2D Modeling – $550
  7. Business Consulting – $500
  8. Social Media Advertising – $500
  9. Graphic Design – $500
  10. Presentation – $450

If you have marketable skills, you will never be bound to only having a 9-5 job. So while the example above might fall short of savings and investing goals in his/her day job, it is possible to hit those goals with a side hustle.

Turning $1000 per month into $1.5 million might seem impossible to the average person. But when you’re part of the Wealth Gang, you understand the power of compound interest and the freedom that true passive income provides. The key lies in having a budget and living within your means. If you can’t do either of those, and you’re not earning in the top 1%, chances are you will never reach financial freedom.

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Author
C. James

C. James is the managing editor at Wealth Gang. He has a degree in finance and a passion for creating passive income streams and wealth management.