Tag Archives: #Saver13

Money Challenge for 2013 – Week #6 – Standard Method Benefits

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.

Interest Calculations based on Standard Method of saving

Interest Calculations based on Standard Method of saving

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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Money Challenge for 2013 – Week #5 – Spend Wisely

Total Saved to date: $15
Balance in ING Savings Account: $15

How are your efforts going this week?  Have you kept up with saving? Week #5 ends this week, so that means that $5 has to go into the account.  That’s 1/2 of what you saved in all of January!  Now things are getting serious!

I guess that $15 doesn’t seem like much, but by next week, there will be interest added to our bank accounts and even though that won’t be much yet, it’s our reward for sticking with it!  My friends at ING always offer a decent rate on their savings accounts too, which is a nice perk!

Recently, I have been thinking a lot about the money we spend and the money we save.  Part of the reason is that I have ventured into this effort and part of it is because for most of January, I have been packing to move by the end of February.  One thing that has become clear during the clean-up/purge stage of my move; I have a lot of stuff that I no longer need.  As I was filling a bag for garbage collection and another for the Value Village, I started to think that I really should think twice before I spend money.  Balance off the wants and the needs.  Most of the things I was getting rid of, were things I wanted at some point.  Most of them didn’t address a need.  There were loads of impulse buys that seemed great at the time, but after a day or a week, the item ended up on a shelf or in the basement collecting dust.  Wouldn’t it have made more sense to take the money and put it into a savings account and let it collect interest?  I likely would have had more vacations in the last few years and less stuff to throw out or donate.

If we all thought twice (or maybe three times) before we bought some of the things we have in our basements and on our bookshelves, would we make the same decisions? If we equated the item to the percentage of a vacation, if we saved those funds would we make the same decision?  What do you think?  What can you stop buying to help you save a few dollars for a bigger goal?  Message me on Twitter or leave a comment here with your thoughts.

Money Challenge for 2013 – Week #4 – What method are you using?

Total Saved to date: $10
Balance in ING Savings Account: $10

We are now finishing week #4 for this challenge and things haven’t seemed too difficult, have they? Have you been able to keep up with putting the funds into your account?  This month was relatively easy, only $10 for an entire month; That’s less than a coffee a day.  February is going to be the first big challenge.  Four weeks and $26 in a month.  Not crazy, but almost a dollar each day needs to be saved.  Will you save the loose change you receive each day in a jar and put that into your account? Will you use another method?

Since I have started talking about this idea, I have heard and discussed a number of ways that you can implement this challenge into your life.  Here are some of the methods that I have heard about, so far:

Method #1The Standard Method – This method is pretty straight forward.  You follow the chart, as set out in my last two posts.  Week #1 is the first week of January and week #52 is the last week of the year.  Straightforward and easy to remember.  It does have flaws, as Justin pointed out.  This method has you saving $202 and just under 15% (14.6%) of the goal in December, when savings is not usually a priority.

Method #2The Reverse Method – This method is the same as Method #1, but instead of counting up the weeks, you count them down.  That means you start with week #52 in the first week of January and end with week #1 at the end of December.  This brings the heavy savings to the start of the year (and also gives you interest on a larger balance as the year progresses) and requires you to save a total of $10 or just less than 1% (0.72%) in December.  That’s seems more manageable around Christmas.  I really think this method holds a lot of merit given that January and February tend to be “quieter” social months due to the weather.

Method #3The Knock Out or Random Method – I tend to like this one too, although it does involve a bit of crystal ball thinking.  I feel it gives you the ultimate control to be successful.  In this method you list the weeks out and then select what you will save each week.  That way, if you get a bonus and have some extra money, get week #52 out-of-the-way.  If you have a sudden car repair and money is short, get one of the weeks between #1 and 10 out-of-the-way.  Knock them down so that the savings matches your life and what you have happening.  At the end of the day, just save each of the weeks.  The sooner the “Big” weeks are in the account the more interest you will earn, as well.  I really like this method and I may convert my attempt to this plan, just because it will help me be successful and that’s the key; To be successful in this effort.

Method #4The “What I Have” Method – Instead of letting the list tell you what to save each week, you can use a variation on Method #3, where you look at how much you have to save at the end of a week.  If the amount is $15, then you can either “check off” week #15 or week #7 & 8 or week #5, 4, 3, 2 & 1.  This way you are checking your wallet at the end of each week and instead of just blowing the money you have left at the end of the week, you are putting it into your goal for savings.

What method are you using and how is it going? Let me know on Twitter or leave me a comment below.  Please feel free to share these posts and ideas with your friends and encourage their comments.