Good morning and Happy Friday!

Welcome to another edition of The Matt Viera Newsletter.

Thank you for your continued support.

I recently chatted with a friend who informed me that one of his goals for 2023 is to save $5000.

I told him it’s a great goal to strive for, and I drafted this post to discuss the idea.

Who couldn’t use an extra $5000 sitting in their savings account?

$5000 is:

What does it take to save $5000 in a year?

$417 per month.

$105 per week.

You can stop reading if you have $5000 in your checking or savings account.

However, if you’re looking to save $5000, here are some simple tips to help you get started.

1) Stop buying coffee in the morning.

I don’t typically buy coffee in the morning, so I don’t know how much coffee costs. Let’s go with $3. $3 for a cup of coffee from your favorite coffee shop. $3 per day, 5 days per week, over a year will add up to ~$780.

$780 spent over a year to buy coffee on your way to work.

Make coffee at home and save $15 per week.

2) Stop buying lunch.

Again, I don’t typically buy lunch during the week. However, when I do, I end up spending about $15. I know NYC is expensive, so lunch in your area may be cheaper. So let’s assume you’ll pay $12 per day for lunch. $12 per day, 5 days per week, over a year is ~$3120.

Instead of buying each, just making coffee and lunch at home will net you $3900 over a year.

Some people may not buy coffee or lunch daily. Or you may be working from home. If so, deposit $75 into a high-yield savings account at the end of the week.

3) Audit your finances.

Grab a notebook, your computer, and a cup of coffee (you brewed at home), and take some time to analyze your spending and expenses.

You want to look for categories of spending you can reduce, e.g., take-out, brunch, happy hours, impulse purchases, etc..

Also, investigate if you can reduce the cost of your monthly cell phone or cable/internet connection.

For example, for years, I was spending about $100 just on my internet connection at home (I don’t have cable TV). I got rid of cable because of the cost; however, $100 for an internet connection seemed excessive to me.

I reduced my internet bill by $70 per month by calling my internet service provider and letting them know $100 a month was too expensive for me.

Not only did they reduce my monthly payment by $70, but the bandwidth of my connection was increased.

$70 per month over a year is $840.

Also, audit your subscriptions. You may be spending money on subscriptions you may not even be using.

Now, after analyzing your expenses, let’s say you were able to find a similar savings of $70 per month. Let’s take a look at the math:

$780 per year saved by not buying coffee

$3120 per year saved by not buying lunch

$840 per year saved by auditing your finances

That’s $4,740 saved over a year.

How can you make up the difference?

Put into this practice this concept I recently learned: a “No-Spend Week.”

For 7 days, do not spend any money on anything that is not essential, i.e., do not spend any money unless it is for your mortgage/rent, car payment, utilities, or groceries. If it is not essential, do not spend money on it.

Try this for 7 consecutive days over a month or two. Or try it every month for a year if you’re feeling ambitious.

The whole point of this exercise is to find ways to save $105 a week for a year.

Every Friday, deposit $105 into a high-yield savings account. I have a savings account that currently offers a 3.3% interest rate.

I plugged these numbers into a Savings Account calculator. If you saved $420 per month into a savings account offering a 2.4% interest rate, you would save $5,096.23 over 12 months.

It’s essential to take the time to understand your finances. Remember to be disciplined and consistent if saving $5000 in a year is your goal.

And, if you can save $5000, you should consider saving more.

Your future self will thank you for the financial actions you take today.

Interesting reads:

Is New York City facing a ‘doom loop’ scenario?

Money is emotional — but personal finance advice rarely accounts for that

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