Total Saved to date: $21
Balance in ING Savings Account: $21.01
Week #6 is drawing to a close and suddenly there is over $20 in our account! Still seems like a small amount, but when you consider that we had $10 saved at the end of January, we have come a long way in just 2 weeks! Are you starting to notice a difference in your spending habits to allow you to have the funds to save at the end of the week? Hasn’t been too difficult yet, but we are rapidly getting to $10 and more per week.
This week, I am going to start a 3 post series looking at the benefits of using the different methods of saving and how that affects interest earned by the end of one year. By looking at the Standard Method, The Reverse Method (which I discussed in the week #4 post) and a new idea, which was to divide $1,378 by 52 and save an equal amount each week, I hope to see if there is an interest advantage to one of the methods and whether it is worth considering other options.
Let’s start by looking at the interest earned using the Standard Method. For the purposes of my calculations, I used the rate that I am receiving on my ING Savings Account (currently 1.35%). The chart below shows the total savings and the interest that should be earned each week.
The interest growth starts out very slowly for this method, since it matches the amount being saved. As the money in the account starts to grow, so does the interest per week and per month, which isn’t surprising. The total for the year looks to be $6.09 using this method (assuming that the rate stays constant for the year). That said, an extra $6 won’t hurt when the end of the year arrives, will it?
Next week, I will look at the interest earned if you use the Reverse Method and how it compares to the Standard Method. What sort of rate are you getting from your bank? Do you have any tips on getting a better rate? Drop me a message on Twitter or leave a comment here.
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