11 Quickest Ways to Grow Your Savings Account to $100,000 in Less Than 5 Years

Many of us set ambitious goals at the beginning of the year like saving enough money to purchase a house or take a year off from work. But how feasible is it really to do?

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Turns out, it’s not impossible. If your dream is to save $100,000 in less than five years–there are many actionable steps you can begin taking today to get you there.

Below, experts give their top recommendations for saving up a large sum :

Create a Detailed Budget

Begin by analyzing your current financial situation and creating a detailed budget. Identify your income sources and track all your expenses. According to Nnaemeka Obi, CFA and finance expert at Market Center , this will help you understand where your money is going and where you can make cuts.

“Allocate a specific amount towards your monthly savings, treating it as a non-negotiable expense.”

Set Clear Financial Goals

Having a clear, measurable goal is essential. Break down the $100,000 target into smaller, manageable milestones. Setting smaller goals makes the larger target seem less intimidating and helps keep you motivated.

“For example, aim to save $20,000 annually, which translates to roughly $1,667 per month,” Obi said.

Open A High-Yield Savings Account And Start Automating

Automating your savings is one of the easiest ways to ensure you consistently put money aside. Obi recommended setting up automatic transfers from your checking account to your savings account monthly.

“This way, you won’t be tempted to spend the money before you save it,” Obi said.

According to Nischay Rawal, certified public accountant and founder of NR Tax & Consulting , you should ​​open a high-yield savings account and automate deposits.

“Even small, consistent contributions can add up quickly with compound interest.  One client increased her savings by over $30,000 in 2 years just by automatically moving $50 per week into a high-yield account,” Rawal said.

Increase Your Income

This could be through asking for a raise, finding a higher-paying job, or taking on side gigs or freelance work.

“Look for ways to boost your income,” Obi said. “The additional income can significantly accelerate your savings growth.”

“Consider consulting or freelancing on the side.” Rawal agreed. “I work with several business owners who bring in an extra $20-50,000 per year consulting in their expertise. They allocate most of this income straight into savings and investment accounts.”

Pay Off High-Interest Debt Like Credit Cards

“The money you save on interest and fees can be diverted into your savings fund instead,” said Rawal. “A few years ago, I helped a client develop a plan to pay off $25,000 in credit card debt.”

Once debt-free, he said they could save over $500 each month that had previously gone to interest payments.

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Cut Unnecessary Expenses

“Review your budget and identify non-essential expenses that can be eliminated or reduced,” Obi explained.

This might include dining out less frequently, canceling unused subscriptions or finding more affordable alternatives for certain services. Redirect these savings into your savings account.

Invest Wisely

To grow your money faster, consider investing in higher-yielding options like stocks, mutual funds or real estate.

“Savings accounts typically offer low interest rates,” Obi added. “However, it’s crucial to do thorough research and consider your risk tolerance before investing. Consulting with a financial advisor can provide personalized investment advice.”

Maximize Tax-Advantaged Accounts

According to experts, utilizing tax-advantaged accounts such as a 401(k) or an IRA offers tax benefits that enhance your savings growth.

Additionally, if your employer offers a matching contribution for your 401(k), Obi advised taking full advantage of it as it’s essentially free money.

Save Windfall Money

Rawal advised to save any windfalls like tax refunds, bonuses or inheritances.

“One of my clients received an inheritance of $50,000 and added the entire amount to her savings account, increasing her balance by over 50% in one transaction,” Rawal said.

He added that while windfalls can’t be counted on, taking advantage of them when they come can significantly boost your savings.

Reevaluate and Adjust Regularly

Periodically review your financial plan and make necessary adjustments.

“Life circumstances and financial goals can change, so it’s important to remain flexible and update your strategy accordingly,” Obi noted.

Stay Disciplined and Patient

Achieving a significant savings goal requires discipline and patience. Avoid the temptation to dip into your savings for non-essential purchases. Stay focused on your long-term goal and celebrate your progress along the way.

By implementing these strategies, Obi said individuals can steadily grow their savings account and reach the $100,000 mark in less than five years.

“The key is consistency, discipline, and making informed financial decisions.”

This article originally appeared on GOBankingRates.com : 11 Quickest Ways to Grow Your Savings Account to $100,000 in Less Than 5 Years