Do you have an emergency fund? A nest egg? Or even just a small savings account? If you are like most people, the answer is no. Most people spend all (and sometimes more) of what they make each month and don’t even think about saving.
But if you suddenly have an unexpected car or appliance repair that you’re not prepared for, chances are you’ll wish you had put some money aside. It’s time to get serious about saving before you actually need those extra funds.
Committing to a weekly savings plan may sound easy, but can you stick with it? Trying to make a drastic change in your budgeting and savings plan may be too difficult to maintain over the course of an entire year. But starting small will help you maintain your momentum and reach your ultimate goal.
Do you think you could manage a slight increase in your savings plan each week? That’s the purpose of this one-year plan. Just an incremental increase each week for a year to help you reach your goal.
The One Year Savings Plan
How It Works:
Start Week One by saving just $1; then on Week Two add $2; Week Three you save $3, and so on. The most expensive week of the year will be Week 52 when you’ll need to put aside $52. But, if you can manage this, your savings would add up to $1,378 in just one year. That will definitely provide you a comfortable emergency fund.
The idea of the challenge is to stick to a schedule. This will help you make incremental adjustments to your savings over time, which is great if you are just starting out and not used to putting anything aside.
Automate Your Savings
If you start to have trouble keeping up with the plan after a few weeks or months, try automating your savings. Set up automatic transfers between your checking and savings account to move the money on the schedule you set.
Keep Your Savings Difficult to Access
But automation is just part of the solution. You also need to make sure that you can’t easily access your savings account. Don’t link your savings account to your debit card or use it for overdraft protection on your checking account. The only way you should be able to access your funds is by going to the bank or making an online transfer that will take at least a couple of days to complete. This will make you think twice about using that money and keep you from making impulse purchases with it.
If you set up your savings in an interest bearing account, you will be able to add a few extra dollars to your total over the year. It may not be much, but every little bit helps.
Make It Work with Your Pay Schedule
If making weekly deposits don’t work with your pay schedule, change the transfers to bi-weekly or monthly. Just be sure that you are adding in the amount for the missed weeks. For instance, if you want to make your January deposit in just one payment, you will need to deposit $10 to cover the first four weeks of the plan.
Reverse the Plan to Ease the Holidays
If depositing larger amounts toward the end of the year seems overwhelming, especially when the holiday season approaches, try reversing it and depositing $52 on Week 1 and $1 on Week 52. That may make it easier on your budget.
Is this a method that would work well for you? Let us know in the comments below if you’re jumping on board and saving this year!
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