We are hoping to make 2014 the year we finally get a stranglehold on our debt and make serious strides toward financial freedom. One of the ways in which we plan to do that is to increase our emergency savings; thereby reducing the need to rely on credit cards if an emergency comes up.
We have written numerous times about how we were able to build up an emergency fund, and then car repairs usually come to drain the account within weeks of us accumulating a meaningful amount. With one less vehicle and a definite savings plan, we are hoping that this year will be different.
This year we plan to take on the weekly savings challenge! What exactly is the weekly savings challenge? Good question, here it is in a nutshell:
The picture above shows the timing and the effect of the weekly savings challenge. As you can see, it calls for you to place a small amount in savings each week of the year.
How do you decide how much to put the savings? Well, it’s based on what week we are in.
For instance, at the end of the first week of the year you put aside one dollar for savings, $2 for the second week, $3 in the third, and on and on it goes. The final week (week 52) will call for you to place $52 into your savings account. If you are consistent with this plan throughout the year, on December 31st, you should have $1,378 in your savings account.
My suggestion is that you open a new Checking or Savings account with Capital One 360 (Full Disclosure: this link contains my referral code). We currently have 6 accounts with Capital One between personal and business and we couldn’t be happier with their products or service. You can set up automatic transfers from your current bank, and if you use the link above, you will earn a $50 (for checking) or $25 (for savings) bonus just for signing up!! It’s free money!!!
So if you decide to open a new Capital One 360 checking account using this link, then you will have a total of $1,428 at the end of the year! By choosing an online bank, it will help you to fight the temptation to dip into your savings account for a frivolous purchase.
We all know that starting a habit is usually the most difficult part. So the great thing about this plan is that during the first month or two – while you are trying to establish the habit of saving – you’re only putting aside a couple of dollars each week. It isn’t until week number 10 that you actually put aside double digits into your savings account ($10)!
By that time you have already been saving money each week for 2 1/2 months, and it will most likely be a strong habit that won’t be easy to break. So while it may not be easy for you to put aside $50 right away, you are able to very slowly build up to that by starting with one dollar.
We’ve created a PDF of this document so you can download and print it out and put it anywhere that will motivate you to continue saving. We also plan to document our progress on the site so that you can join us in doing this together.
It is our hope that at the end of the year we all have at least $1,378 more in savings than we do today.
Let us know in the comments section below if you plan to participate in this challenge, and if enough people want to join in, we will make it possible for us all to keep track of each other’s efforts, and to encourage each other to stay consistent.
© 2014, Khaleef “Fat Guy” Crumbley. All rights reserved.