As the end of 2016 approaches and a new year is on the horizon, it is time for a new year of financial goals. According to a recent USA Today article, nearly 70% of all Americans have less than $1,000 in their savings accounts. That means when someone has an unexpected expense they must turn to high-interest payday loans or credit cards that can’t be paid off at the end of the month. The interest paid on these will cost way more than the original amount in the long run. Even something as simple as $1,000 in an emergency fund can help offset these costs. So if you’re interested in avoiding the pain of credit card borrowing, it pays to have some financial security.
What does financial security mean? It is different for every person. It could mean paying down student loans if you are a recent college graduate. It might be tackling credit card debt that has plagued you for months or even years. Maybe it is saving for a home. Each person’s financial goals are different. Today’s focus will be on building an emergency fund for you to have in case you encounter any unexpected expenses. The best part about an emergency fund is it can be done with little effort on your part and in just one year’s time.
Now if building a $1,000 emergency fund sounds good, building a $1,378 emergency fund will sound even better. The best part is that there is a simple and easy way for almost anyone with an income stream to accomplish this.
Beginning in 2017, set a goal to accomplish the 52 Week Money Challenge printable version. The challenge takes minimal effort and the downloadable sheet allows you to easily track your progress. January 1, 2016, falls on a Sunday, so for simplicity reasons, we will begin the challenge on Friday, January 6, 2017. On the first Friday in the new year, simply put one dollar into your savings account or in a piggy bank if that is easier. On the second Friday of the new year, put two dollars into your account. Each of Friday’s that follow, you will increase the amount you deposit by only one dollar. It would look something like this for the month of January.
52 Week Money Challenge Printable Version Example:
|Date||Deposit Amount||Total Amount Saved|
By the end of January, you will have already saved ten dollars into your account and will be well on your way to establishing an emergency fund. Pretty much you just do the same thing for the rest of the weeks in the year, just for each week add one dollar to your weekly savings total.
Can you live on one less dollar each week? That is how you need to look at this challenge. Each week you train yourself to live on one less dollar than the previous week. In the final week, you will live on $52 less than you did the first week of the new year. The total amount you will have saved up in just one year will be $1,378, which is more than what 70% of Americans have currently in their savings accounts.
Challenge yourself, a friend or a family member. Take on and print out the 52 Week Money Challenge printable version sheet and get your new year off to a great financial start.
Budget Smart, Invest Wise