I make an average salary. I contribute to my 401(k) every month. I travel abroad every few months. I've been frugal my whole life, and I've learned it's a skill that can be taught. If you're wondering how to save 25k in a year, this is what worked for me, plus the math, a sample plan, and where to keep the money.
I have friends who make three times what I do but still have a hard time saving. What's the difference between us? Practice. Growing up, I had a green tin box where I stashed all my cushion-hunting treasures. Each shiny coin was my own little secret. When I got older, I realized this behavior was called "saving."
Since upgrading from a tin box to a checking account, I've figured out how to save for the future without becoming a hermit in the present. Here are my secrets.
Make it exciting
For me, saving money has always been a little thrilling because of its secretive nature. When my friends shared money gripes over drinks, I commiserated, but I couldn't understand how they let hard-earned dollars slip through their fingers.
Early on, I was told to put away at least 10 percent of whatever I made into a separate account, whether that's savings, a 401(k), or something else, and never touch it. I took that advice to heart, and I've found that once the money is out of sight, I don't miss it. But boy, do I admire its growth.
Not all sales are created equal
Everyone likes a deal, but I've turned it into an art: patience and timing. Living in a big city spoils me with designer sample sales, but I have to be discerning. Just because something is on sale doesn't mean it's worth the money. Some of the highest-quality clothes and shoes in my closet cost less than a latte. Seriously.
I once picked up a gorgeous silky scarf at a sample sale for a few dollars, and I wear it constantly. Leather jackets, jeans, and evening shoes have followed the same pattern. When I started reselling pieces I no longer wore through an online resale app, my love of shopping turned into a self-funded hobby.
Treat yourself for less
I've always been a haircare girl and have a cabinet full of products to prove it. But since when does a simple haircut cost a small fortune? I can't justify doing my hair for the price of a plane ticket.
In most major cities, stylists in training look for hair models to practice on. Many salons run these sessions, and you often pay little more than a tip. Beauty counters also offer complimentary mini facials and makeovers, which makes it hard to say no to a night out because of money. No shame in grabbing a deal.
Do the cool stuff you see online, for less
One of my favorite hobbies is collecting passport stamps, otherwise known as traveling. In the span of a year, I've visited several countries across Europe and the Caribbean, plus a few national parks at home. The best part is doing it cheaply and often.
With low-cost carriers more common than ever, flying is more affordable than it used to be. A round-trip, non-stop flight to Paris cost me a fraction of what I'd expected, and I paid for my hotel stays with points earned from everyday spending. I only do this when I'm able to pay the card balance off in full every month, because interest would wipe out any reward.
For flight deals, I use a fare search tool that shows the cheapest places to go by month, then narrow to specific dates. My friends are always asking how I travel so much. This is how.
Don't feel pressured to spend
I learned this one the hard way. As a twenty-something, there are birthday dinners, standing brunch reservations, shopping trips, drink dates, and a hundred other money-sucking activities that are easy to get absorbed in.
If I said yes every time a friend wanted to "grab dinner," I wouldn't be telling you this. When the occasion calls for it, I'll splurge, but if it's catching up with a friend, a great happy hour works just fine. Once I allowed myself to say no, I freed up time to read, catch up on shows, and, best of all, sleep. All while saving.
Be transparent with yourself
I have different credit cards for different rewards, but I only swipe a few of them on a daily basis. I use a budgeting tool that pulls my bills and accounts into one place, so I can see everything together. It keeps my spending in perspective and tells me whether I need to be more careful next month.
When I can see how and where I spend, saving becomes a controllable, mindful practice that keeps me optimistic about the future.
The math: what it takes to save 25k in a year
Here's the part I didn't spell out when I first wrote this: $25,000 in a year is a very specific number, and it breaks down into smaller ones. These figures are plain arithmetic, not predictions of what you'll earn or what any account will pay.
| If you save... | You need to set aside |
|---|---|
| Monthly (12 deposits) | About $2,083 per month |
| Every two weeks (26 paychecks) | About $962 per paycheck |
| Weekly (52 weeks) | About $481 per week |
| Daily (365 days) | About $68 per day |
So is saving 25k a year good? It depends on what you take home. The same $25,000 is a very different share of different paychecks. Here's what it means as a savings rate, using examples of yearly take-home pay.
| Example yearly take-home pay | Share you'd need to save |
|---|---|
| $250,000 | 10 percent |
| $125,000 | 20 percent |
| $83,333 | 30 percent |
| $62,500 | 40 percent |
| $50,000 | 50 percent |
Seen this way, $25,000 is a big goal for most people, not a minimum anyone has to hit. A smaller goal you actually reach beats a large one you give up on in March. If you're not sure where you stand, our guide to how much you should have saved by 30 can help you set a realistic target.
A sample plan to reach $25,000
This is an example, not a prescription. Your income sources and expenses will look different, but the structure works for most people: automate the biggest piece, then fill the rest from smaller sources.
| Source (example) | Per month | Per year |
|---|---|---|
| Automatic transfer on payday | $1,250 | $15,000 |
| Spending cuts redirected to savings | $300 | $3,600 |
| Side income or resale | $250 | $3,000 |
| Windfalls, such as a refund or bonus (averaged) | About $283 | $3,400 |
| Total | About $2,083 | $25,000 |
A few things make a plan like this stick:
- Pay yourself first. Set the automatic transfer to go out the day you're paid, before you can spend it.
- Find your leaks. Look through three months of statements for subscriptions and habits you don't use. Our tips on saving money on subscriptions make this easier.
- Give every dollar a job. A budget you can live with beats a perfect one. Making budgeting suck way less is a good place to start.
- Check in monthly. Ten minutes with your accounts keeps you on track and shows you the progress.
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Where to keep the money while you save it
The right place depends on when you'll need the money. This is general information, not financial advice, so check the terms of any account before you open it.
- High-yield savings account. Good for money you may need within a few years. It's easy to access and typically pays more interest than a standard savings account, though rates change.
- Money market account. Works much like savings, sometimes with check-writing or debit access.
- Certificates of deposit. You lock in money for a set term in exchange for a set rate. You'll usually pay a penalty if you take it out early.
- Retirement accounts. Money for the long term can go into an employer plan such as a 401(k) or an individual retirement account. The yearly contribution limits change, so check the IRS page on retirement plan contributions for current rules.
Whatever you choose, make sure a bank account is insured. The FDIC explains that its deposit insurance covers up to a set amount per depositor, per insured bank, for each account ownership category. If you're saving well beyond that limit, you may want to spread money across institutions.
Trial and error is part of it
Collectively, these habits led to big savings, around $25K in a year. Part of becoming a good saver was trial and error. There's a ton of advice out there, and not all of it is practical. I had to make it personal for it to work. You will too.
If you want a longer horizon, read how one woman saved $100,000 in three years. And if living paycheck to paycheck is the real obstacle, start with how to stop living paycheck to paycheck.
Want income that makes saving easier? Browse open roles and find your next role on the Girlboss job board.
Frequently Asked Questions
Is saving $25,000 a year realistic?
For some people, yes, and for many it isn't, depending on income, housing costs, and obligations. Work out your savings rate first. If $25,000 would take half your take-home pay, aim for a smaller target and increase it as your income grows.
How much do I need to save per month to reach $25,000 in a year?
About $2,083 per month, or roughly $962 per paycheck if you're paid every two weeks. Interest would reduce that slightly, but it shouldn't be counted on, so treat it as a bonus.
Should I save first or pay off debt first?
It depends on the interest rate on your debt and on how much emergency cushion you already have. Many people build a small emergency fund first, then pay down high-interest debt aggressively. A financial counselor can help you weigh your own situation.
What's the fastest way to boost my savings?
Automate transfers on payday, trim recurring costs you don't use, and add a second income stream if you can. Raising your income, through a raise or a new role, usually has the biggest effect.
Should I keep all my savings in one account?
Not necessarily. Many people keep an emergency fund in an easy-access account, savings for goals in a separate one, and long-term money in retirement accounts. Separate accounts make it harder to spend money you've set aside.
This article is general information, not financial advice. Your situation, rates, and account terms will differ.
