Looking for an easy way to save up money throughout the year? Try a weekly money savings challenge! Read how to set yours up today, and get your $5 savings challenge printable for free!
Once upon a time, we had very minimal savings. I’m talking minimal. Maybe there would be a few hundred in our account, but even that would get depleted quickly between expenses for grad school. Trying to save money over 52 weeks, let alone 5 weeks, was downright impossible.
Back then our car insurance was on a 6-month billing cycle, and every time it came, we had to finagle funds from the month to pay for it. It was never a surprise that the bill would come every 6 months, but we never prepared for it.
Every Christmas and birthday was the same story. We never prepared. We would move around funds from other expense areas for the month. And it sucked. We rarely had the budget balanced out for the month and wound up overspending every single time we had this situation occur.
The problem was that we knew when those expenses would be. Birthdays and Christmas don’t change here. Our insurance bill came every 6 months, like clockwork. But we neglected to prepare for them.
After we bought our house in 2014 and got serious about our finances and paying down debt, we started setting aside money for these types of expenses. Essentially, we set up sinking funds to help relieve our monthly budget. At first, I was skeptical about how much money we were taking out of our monthly budget to save up for these expenses. I mean, wouldn’t that money be better off in our budget to help pay down debt? But the reality is that I was not prepared for how that simple act would improve our finances and reduce strain on our monthly budget.
- How To Start Sinking Funds
- How To Create SMART Financial Goals
- Why You Should Review Your Budget
- How To Track Expenses
52-Week Savings Challenge
The idea behind the 52-week savings plan is simple. The idea is very similar to a sinking fund; you determine how much money you need to set aside throughout the year.
There is no right or wrong here. It’s your budget, your money. You need to determine the amounts, but he most common 52-week challenge is to save up $1000 over the year (roughly $20 per week).
But you could also utilize the savings challenge to:
- Save a set amount per week for a year; like $5 weekly savings challenge
- Save $3000 for a vacation the following year (about $58 per week)
- Save various amounts per week; $1 the first week, $2 the second week, etc.
Some other areas for a 52-week savings plan include holidays, birthdays, and savings goals.
How Do I Start to Save Up?
The first step is to determine what categories you’re going to save up for over the year. After that, look at your past bank statements to see how much you’ve spent in the past. If you still don’t know, estimate how much it will be, and adjust your savings goal as necessary. Finally, take the amount you want to save up over the year and divide it by the number of weeks in a year to determine the amount you need to save each week.
You could do differing amounts each week, but since Hubs is paid the same amount each week, I prefer to set aside the same amounts each week for simplicity.
For example, maybe you get a delivery of natural gas 4 times a year. While the cost of each delivery varies with the cost of natural gas and the amount that’s delivered each time, the cost from year to year is consistently around $1,000. To help save for each delivery, you’d want to put aside roughly $20 each week. So next time you get a delivery, you’re not stretching out that month’s budget to come up with the $250 natural gas bill.
But okay, what if you wanted to save up for a big vacation a year from now? You do the research and find out it is going to cost $5,000 to make that trip. Rather than going into debt, or trying to come up with the money right before the vacation, you start setting aside $96 each week throughout the next year. That way when your vacation time comes, all you need to worry about is relaxing and having fun.
How I Use the 52-Week Savings Plan?
For our expenses, I use this plan for a few different expense categories.
First, I use it for bills that come only once a year, or once every quarter. For us, that’s our propane delivery, trash bill, and AAA membership. This is how I save up our Non-Monthly Expenses sinking fund.
I also use a 52-week savings for prescriptions, medical, dental, and vision expenses. While 2017 was an off year for these expenses because our insurance changed, I kept track of how much we spent throughout the year, and I am anticipating I’ll be spending the same next year, and know how much I will need to put aside each week next year.
Sports expenses, such as registration, uniforms, and equipment, fall under this savings category.
Lastly, I use this method for anything birthday, holiday or gift-related expenses. Birthday presents, either for the kids, Hubs, or family members, and even for birthday parties we’ve been invited to, come out of this account. The same goes for Christmas presents, Mother’s/Father’s Day gifts and so on. The last two years I had to update what we spent annually for this account, and so far it’s worked. We’re coming up on Christmas with over $1,100 in the account, which is more than enough for everyone we will have to buy for.
You don’t have to stick to a 52-week plan either. Our septic is scheduled to be pumped again at the beginning of June. I don’t want to come up with $300 out of our June budget to cover the cost, so I am saving $10 each week over 30 weeks toward this cost.
How Do I Keep Track?
I use a printable I created in my budget binder. It was a fantastic way to keep track of how much money we were putting aside easily! The only problem with it was it was in the form of a lump sum savings.
Last year, I didn’t use a tracker at all. We would put the same savings amount each week, and I always put the money into savings. But the **problem** is that I didn’t have any idea how far we were towards our savings goals for the year. And honestly, what is the point of making a goal if you’re not going to track your progress on it?
So this year, I created a new printable. This time it has space for defining your savings goal, what you’re saving for, and a space for any notes at the bottom. This will undoubtedly help to stay on top of separate savings goals.