A couple of years back I had my big money realisation, which completely changed my life. The way I saw my job, my finances and my possessions got flipped on its head.
I realised three things:
- I needed to learn how to stop wasting my money.
- I wanted to spend 8 hours a day doing something I was passionate about, not just working in a job devoid of meaning.
- I wanted to eventually reach financial independence.
While financial independence is my long-term goal, I knew that gaining control of my finances was the first step if I ever wanted to escape my 9-5 life.
I saw that all the status-defining objects and hobbies that are meant to make you happy, are just traps designed to separate you from your money and keep you working in your 9-5 office job until you’re allowed to retire.
Possibly at 70.
While a two-week holiday in an all-inclusive, 5-star hotel in Cancun can be an incredible and unforgettable experience, it will also drain your bank account and your money-saving ability.
If you spend all the money you earn, you’re going to become a slave to your job. It’s as simple as that!

Ricard, this sounds terrible… what can I do about it?!
Understanding that spending all that you make isn’t clever is the first step to recovery! Pat yourself in the back 😉
Next steps; find out where your money is going, spend less and save what’s left.
If that sounds like something you’ve already heard a million times, don’t worry – I’ll hold your hand (metaphorically) and tell you exactly how I saved $20,000 in a year. You can then decide if it’s something you want to do as well.
Deal?
This is how to save $20,000 in a year
$20,000 is a big number. You’re not going to save that much in a month, so we need to divide it up into smaller chunks!
Bring on the maths!

$20,000 / 12 = $1,667
You’ll have to average $1,667 saved a month if you want to reach 20k in a year.
Does that sound reasonable?
If it doesn’t, it may be because:
- You don’t earn enough to save this much – in which case you probably have lower expenses and would need way less than $20,000.
- You make plenty of money but don’t think you could save this much. You’d be surprised at how much you’re able to save if you put your back into it.
After all, I chose $20,000 because it would cover my living expenses for well over a year as I built up my business into a profitable endeavour. You may need more or less than me – all it takes is some tracking to see where you’re at.
Mindset
Saving such a large amount of money requires a change in your mindset because it could be harder than anything you’ve done before! You’ll also need to develop some strong money habits to get you through this aggressive saving phase.
Most importantly, you need to understand that every dollar you save will bring you closer to your goal – whether that’s to save an emergency fund, build a business or just travel the world for a year.
When you keep your goal in mind and you focus on visualising it, the process of saving will feel like part of a bigger picture. It will start to become second nature after a while.
In my case, I knew exactly what I wanted to achieve. When I closed my eyes and visualised my future, I saw myself feeling proud when I looked at my bank account and saw those $20,000 that had allowed me to quit my job and start my own business.
When I closed my eyes and visualised my future, I saw myself feeling proud when I looked at my bank account and saw those $20,000 that had allowed me to quit my job and start my own business.
Whether you believe in some sort of law of attraction or not, my personal experience suggests that visualising really works.
The Big 3
If you’ve ever tracked your expenses or followed a budget, you’ll see that most of your outgoings fall under The Big 3: Housing, Food and Transportation.
The best course of action is to start with these and see if there’s money to be saved here. If you start with some big wins, everything else will be much easier.
Housing
Unless you have a really expensive hobby (in which case reducing your expenses will be like a walk in the park!) you’ll be shelling out a hefty amount on either rent of mortgage repayments.
Can you reduce your rent or mortgage? Could you move somewhere cheaper, or live in a smaller place? Could you refinance your mortgage and get a better deal?
I didn’t actually change my living arrangement to save money. Although I could have definitely lived somewhere further away from town centre and in a worse house, that would have been detrimental to my happiness.
It was the only expense that I was lenient with, but I’m happy I did!
Food
If you’re anything like me you’ll eat out a little too much. A combination of laziness, disorganisation and a desire for good food made me eat at restaurants several times a week.
And it was killing my finances.
After tracking my expenses for a few months I realised how much money was going towards restaurants, takeaways and lunches at the work canteen. It was insane, so I set up two rules:
- Only two restaurant meals a month – this was enough to save lots while still allowing myself a couple of treats. 😛
- No more work canteen – my work lunches would always be the leftovers from my dinner the previous night.
Although I missed the fancy food a bit to begin with, I soon got used to cooking more at home. My health also improved and I lost a few pounds of fat – home cooked meals will always be way more nutritious than anything that you’ll eat out.
So, how about better health and more money in exchange for a little time and effort to buy and cook food at home? It’s a no-brainer, folks!

Transportation
This one’s easy.
- If you drive anything over 150 horsepower, consider downgrading.
- If you drive two cars, do your best to manage with one.
- If you drive to work, could you take public transport there instead?
When I started getting serious about saving, I had just bought a 182 bhp Ford Fiesta ST. This was definitely me trying to keep up with the Joneses and working in an automotive company where everyone drove beautiful cars. Peer pressure is real!
While not a completely ridiculous car, it was still a drain on my finances – to the tune of $400 a month! After a few months of enjoying it, I downgraded to an A-to-B kind of car, which isn’t flashy but does the job.
I also tried to use the car as little as possible, walking when I could and trying to lift-share with work colleagues. That made a significant difference!
Trimming the fat
With the big 3 covered, it’s then a matter of analysing your expenses one by one and making a decision. Always consider this:
Would my life be much worse if I cut this expense?
If the answer is “no”, then destroy it! Kill it with fire! Do something free as an alternative.
Here are a few of the areas that I decided to trim, and what I did:
Bills. I called each one and renegotiated a decrease in price. It worked in most cases!
Mobile phone: I downgraded my contract to a much lower one. I didn’t actually use most of the 5Gb of 4G internet and unlimited voice minutes that I got anyway!
Gym: I stopped going altogether! While I now see that this was a bad call at the time, I think downgrading is a great idea. I recently quit my previous gym and have started going to a weights-only gym. I used to pay €60 per month. Now I pay €9.90. Ridiculous! So happy! 😀
Going out and drinking: When I went out to bars or pubs with my friends I set a limit of 2 drinks per night. That let me enjoy myself without the massive expense – or the posterior hangover! Win-win.
Videogames and cinema: I limited my cinema-going to once per month. I also allowed myself to buy a new game once every two months. While I could have decreased both of these to zero, this was a happy medium that let me enjoy my hobbies while still saving money.
I’m sure that you’ll be able to find other categories in which you’re spending too much money. The trick here is to indulge yourself a little bit, but very sporadically. You’ll save lots of money and will actually appreciate doing or buying it way more when you do – scarcity does incredible things to our brains!
Boosting your savings rate
When you’ve reached the limit to how much you can save while still being generally happy, you’ll need a different approach if you want to increase your savings rate: You’ll need to make more money.
All the money I saved I invested in stocks, so it wasn’t just sitting in my bank account while I didn’t actually need it. Because I bought during stock market dips, and all my stocks pay dividends, I managed to grow my saving by a considerable amount.
When the time came to finally quit my career and start using this money, the market was (and is) at an all-time high. Nice!
Now, you have to be careful. Don’t go investing all your money in stocks. You always need an emergency fund in easily-accessible cash!
The stock you buy should also be diversified over many companies and sectors to limit risk.
More ways to make more money
Start a side hustle: If you’re willing to put in a few hours of work a week, you can easily create some nice side income to supplement your salary. Check out 8 ways to make money online, and how I make money by selling ebooks on Amazon Kindle.
Ask for a raise: If you’ve been at your current role for a while, there’s a good chance that you’ll be able to successfully negotiate a salary boost with your boss. Check out this guide by the great Ramit Sethi.
Sell stuff on E-bay: I bet you have old stuff that you don’t use anymore, stored away somewhere in your house. Why not put it up for sale and make a bit of extra cash?!
Use Ebates to get cash-back: Ebates is amazing because it lets you shop online as your normally would while giving you cash-back! It’s pretty much free money if you were going to buy anyway.
Make sacrifices: If you’re not quite reaching your saving goals, the last resort is to start making sacrifices. If you’re ready to completely eliminate some of your expenses, you’ll be able to save a really nice amount of money every month.
So there you go! This is how to save $20,000 in a year and even quit your job like I did.
Once you analyse your expenses and make measured cut-backs to your spending, it’s surprisingly easy to save large amounts of money. Make sure to share this on social media if you found it helpful. It might seem small, but it really helps me 🙂
Hey Richard!
Loved the article, but just wanted to let you know there are two sentences that are repeated.
Thanks!
I’m a social worker that lives alone in expensive south Florida. I already have a side hustle but my issue is that I want to start a business and/or live off of dividends but nobody is willing to share their expertise. They tell you to do this and that but there is always a detail that’s lacking. Just like with cooking. 50 people can tell me how to make shepherds pie but it will never taste like their’s because they mash the potatoes a certain way. The only way to truly learn something down to the wire is to sit side-by-side like an apprentice, like a father teaching his son, and pick their brain, which is something that is difficult for the internet to master. However, I find your articles to be very motivating and I have hopes of escaping to freedom because I love being a social worker but I cannot benefit the families I work with if I am constantly worrying about how I’m going to make next month’s rent!