Posted on August 6, 2015
Money In The Bank
In my first blog, I talked about the importance that my family has for me. And while my discussion about protecting them from harm at all costs alluded to a need for actual physical protection, there are many dangerous pitfalls out there that can be easily avoided with consistent, responsible action on your part today. Today, I will share some tips and tricks that Catherine, the kids, and I have adopted to protect our family’s finances.
Nothing Worth Having Ever Came Easy
Spoiler Alert: Families are expensive. My kids, as much as I love them, are just mooching off of Catherine and me for the next 15 and 17 years, respectively. For now, they contribute absolutely nothing for the many toys, clothes, and meals they require. (Though Anna has found that hugs and snuggles are accepted currency in our house.) So when there are multiple people under one roof, you have to get creative with how you save money.
The rage a couple of years ago was the 52-week Savings Challenge. The concept was that you would start the first week of January by placing $1 in a ‘savings jar’ and increase the amount by $1 each week until, at the end of the year, you have placed $52 into your savings jar, making your yearly savings equal to $1,378. I have two problems with this method, though.
First, I don’t know about you, but my money, especially my savings, has to be out-of-sight, out-of-mind. Placing money in a glass jar on a kitchen counter would make it too easy for me to justify the occasional withdrawal from time to time. To combat this urge, I much prefer to place the weekly savings into a savings account that is not linked to a checking account. In addition to your money being less accessible this way, a savings account actually pays you to keep your money there. Find me a kitchen counter that has as high a savings interest rate as the credit union our savings go into.
Secondly, (and much thanks to Carrie Rocha over at pocketyourdollars.com for this gem), following the 52-week Savings Challenge as it was originally conceived is harder to stick with than the method Rocha recommends. Rather than starting at $1 and increasing incrementally by $1 each week, Rocha’s suggests starting at $52 in week one and decreasing by $1 each week. This has you enjoying a substantial amount of savings by the end of week 4 ($202 vs. $10). If you are saving to a savings account rather than a glass jar, you also make substantially more in interest by reversing the method.
This challenge is not meant to set you on the path for making certain your kids college is paid for and that you’ll have comfort in your retirement. It is, however, a great way to save up for a rainy day, a vacation, or a big ticket item for the house. Plus, as your kids get older, it is a great lesson in being fiscally responsible. Anna loves going with me to make the deposit each week. If you have tried a variation of the 52-week Savings Challenge, share your success (or failure) in the comments below.