The $1000 project

The $1,000 Project originated from a book written by Australian financial adviser and content creator, Canna Campbell. It has helped thousands of people achieve lofty financial goals by providing a framework in which to break down those big goals into manageable — and achievable — chunks. Here’s everything you need to know about trying The $1,000 Project for yourself.

What is The $1,000 Project?

The $1,000 Project isn’t a budget or a money management system. Rather, it’s a goal-setting strategy that sits alongside your favorite budgeting method. The crux of The $1,000 Project is focusing on saving money in $1,000 parcels, giving each parcel a job as soon as you hit the goal. The idea is that it breaks down a much larger savings goal into smaller, more manageable chunks, and gives you a greater chance of achieving it. The $1,000 Project is now more than just a book — it’s a savings methodology to help you reach your goals fast.

Campbell’s original goal behind The $1,000 Project was to generate enough passive income to buy a designer handbag every year. She calculated she would need around $2,000 to do that, and so she set herself an ambitious goal to invest $40,000 in one year into the stock market, with the assumption that a 5% dividend yield would earn her $2,000 in passive income each year.

The value of The $1,000 Project lies in the fact you are breaking down a bigger goal into small, clearly defined and more manageable chunks. This approach to goal attainment, financial and otherwise, has been widely documented in research as a way to achieve goals faster.

How The $1,000 Project works works

The $1,000 Project begins with a goal. You start with the big picture, and then break that down into smaller chunks to help build motivation and momentum. Whether you want to save $50,000 for a house deposit, a year’s expenses to take time out of work, or $20,000 for a holiday of a lifetime, you can start working towards it with The $1,000 Project.

Pros and Cons of The $1,000 Project

Just like all money methodologies, there are pros and cons. Let’s take a look at some of the upsides and downsides to The $1,000 Project.

Pros of The $1,000 Project

• Big goals feel more manageable. The mindset is one of the most valuable parts of The $1,000 Project. Breaking your bigger goals up into manageable chunks helps shift your mindset into a place where things feel achievable and within reach.
• You can accelerate your progress. You may even reach your goals faster thanks to the mindset that’s created when you begin The $1,000 Project. Being within touching distance of your goal very quickly helps you line up your behavior and your decisions with the outcomes you want.
• Prompts you to be expansive with your money mindset. The $1,000 Project teaches you to look outside the limitations of your salary or existing budget struggles and empowers you to achieve your goals through other means. For many people, this is life-changing after years of living with a scarcity mindset.
• Avoids budget burnout. Breaking your savings goals down into parcels can help prevent budget burnout, as it allows you to take a break in between parcels. This works really well for people who get bored easily, or who have a period of motivation followed by a slump. By hitting your parcel goal, locking in that progress by giving that money a job, and then starting again, you benefit from the renewed motivation. This gives you the freedom to hustle hard on your individual parcel, and then take a short break from your focus in between.
• Improves your relationship with money. In The $1,000 Project book, Campbell explains how much the Project can help you change your relationship with money and build more positive money beliefs. Working towards smaller parcel goals builds self-efficacy, and allows you to experience the feeling of accomplishment much sooner. This can increase your financial confidence and make you feel more in control of your life and finances.
• Leverages the power of momentum. Momentum is essentially the force that keeps you moving forward towards your objectives. That force is built up and upheld by your past successes, giving you that feeling that you’re ‘on a roll’, and making you more likely to keep pursuing your larger goal.
• Teaches discipline and delayed gratification. The ability to resist temptation and make short-term sacrifices for longer-term benefits is one of the most powerful skills you can develop when pursuing your financial goals. The $1,000 Project teaches you this in spades.
• Helps you lock in progress over time. Each time you complete one of your $1,000 parcels, you put that money towards your bigger goal. That might mean investing it, putting it in a separate savings account, or paying it off of a debt balance. This helps you close off that goal and start fresh on a new one.
• You’ll learn what you really value. Campbell explained that each time she hit another $1,000 parcel, she learned something new about what she really valued. Having that achievable goal of the next parcel at the back of your mind helps you make decisions that are more aligned to your true values. You’ll soon learn that if you value spending time with friends, that doesn’t have to mean an expensive dinner out. It can mean a more intimate gathering at home, while sending more money to your next parcel.

Cons of The $1,000 Project

• You may be limited by salary or high costs of living. While The $1,000 Project is widely accessible to many people, there’s always the risk that you simply won’t have the money spare. If your essential expenses are already taking up a substantial portion of your income, you may find it harder to reach the $1,000 parcels. However, this is where earning extra money comes in, so you can still make the Project work for you.
• Risk of limited earning capacity. Selling old stuff online, doing surveys, market research and maybe even starting a small business to earn extra money can accelerate your progress at first, but you run the risk of exhausting avenues of additional earning opportunities. While this isn’t true for everyone, it’s an important consideration to make. Selling clothes online might work really well for someone with a designer wardrobe worth thousands, but if you’ve only a few sellable items, that income stream can dry up quickly. It’s not to say you can’t find that income elsewhere, but it might require a bit more exploration.

The brain bit: The $1000 Project mindset

The value of The $1,000 Project lies in the fact you are breaking down a bigger goal into small, clearly defined and more manageable chunks. This approach to goal attainment, financial and otherwise, has been widely documented in research as a way to achieve goals faster.

As an example, one behavioral science study revealed that participants were four times more likely to sign up to a savings program where the commitment was $5 per day, rather than the monthly equivalent of $150 per month.

Much like the popular debt pay-off methods, like the Debt Snowball Method and the Debt Avalanche Method, it’s the presence of sub-goals that make The $1,000 Project so attractive to the human brain. The complex and emotionally-charged relationship we have with money may mean our larger goals (that relate to larger sums of money) feel scary and out of reach. Sub-goals can help tackle our mindset around goals we perceive as hard, and help align our behavioral input to the financial outcomes we’re trying to create.

How to get started with The $1,000 Project

The $1,000 Project 🤝 PocketSmith

PocketSmith is the perfect budget companion for your $1,000 Project. It will help you build the discipline and visibility over your spending to keep working towards your next parcel. You can set your budget and work out exactly how much you’ll be able to send to your next parcel, and manage your additional income by categorizing it as The $1,000 Project. Plus, you can get a big picture view of your net financial position, to keep you connected to your bigger goals and vision.

The $1,000 Project: How to nail it

We want you to crush your biggest goals, so here are our top tips on how to nail it.

• Keep your Project money separate. Out of sight, out of mind. Keeping your Project money separate from your usual spending reduces temptation to pull it out for reasons other than your Project goal.
• Start fresh for each parcel. The benefit of the $1,000 sub-goals comes from the refreshed motivation and clean slate. Make sure you close off each parcel by moving the money somewhere else before you start on your next sprint.
• Get creative with income. What makes you your first $1,000 parcel won’t be what makes you your last $1,000 parcel. Be prepared to get creative, make sacrifices, and put yourself out there to keep the money coming in.
• Focus on efficiency. Trialing and testing ways of making extra money is a big part of the $1,000 Project — but make sure to take note of the most efficient ways. If you have the opportunity to take on an extra five-hour shift at work for $30 per hour, it would be more efficient than spending the same number of hours selling something for $50.
• Don’t forget tax! If you’re side hustling in a business capacity, you may have to pay tax on some of the income you make. Don’t get caught out at tax time.

The $1,000 Project: How not to fail it

The opposite of nailing it? Failing it. Here are some potential pitfalls to avoid.

• Don’t forget to budget. While The $1,000 Project often sees you saving money by looking outside of your main income in order to earn it, it’s important not to forget about your main budget and income. You could end up wasting time and energy hustling an extra $1,000 per month and missing out on cutting an easy $1,000 out of your existing spending routine.
• Don’t stress if your progress slows down. You can’t be moving forward all the time. The beauty of the $1,000 Project is that you can make small spurts of progress, and then take a short break from your goal to refocus. If you’re finding you’re running out of ways to bring in extra money or you’re struggling to complete your next parcel, stop and take some time to review and refocus. It’s important not to burn out.

The PocketSmith verdict: 4/5

The $1,000 Project is an excellent way to accelerate progress to a goal using a short, concentrated period of focus. While it won’t solve all your financial woes or serve as a long-term strategy for money management, the sub-goal approach to achieving something that feels impossible is incredibly empowering. The long-term psychological pay-off of achieving a difficult goal can empower you to do more and more for your finances, making the $1,000 Project a fantastic starting point for anyone wanting to dream bigger with their money.