Sounds simple right? In theory, yes. But there is a little more to it than that. How the dollar a Week Savings Plan works is this. Note: It should be called Planned Spending, but a "Planned Spending Plan" sounds kinda weird.
Week One: Deposit $1 in savings account. Total saved = $1
Week Two: Deposit $2.00. Total saved = $3
Week Three: Deposit $3. Total saved = $6
Ok, get the idea? Where it gets interesting is in weeks 30 and up.
Week 30: Deposit $30. Total saved = $465
Week 31: Deposit $31. Total saved = $496
Let's skip forward a few more weeks.
Week 50: Deposit $50. Total saved = $1275
Week 51: Deposit $51. Total saved = $1326
Week 52: Deposit $52. Total saved = $1378
Now if you add in the measly interest that whatever bank you deal with gives you on your deposits, it's easy to imagine that this plan could give you a healthy amount for your Christmas spending (or goal of your choosing).
I think I'm going to adopt this plan for my Christmas Account. My goal is to have $1500 saved by December 2, 2011. If I use the Friday in any given week as my deposit day, and use Friday December 2nd as my goal date of week # 52, I should have $1378 in the account, ready for spending! I used a really scientific formula ( I used a calendar and counted backwards), I figure that this Friday, April 15th, I should be on week # 19.
Week 19: Deposit $19. Total Saved = $190
Obviously, I'm not there yet. But I will deposit at least $19 into the Christmas account by Friday. I'm aiming to be caught up with this account/deposit schedule by May 27th, Week # 25.
Week 25: Deposit $25. Total Saved = $325
When I get caught up and maintain this deposit schedule, I will be on track to have $1500 by December 2nd. The difference of $122 (between my goal amount and how much will have been saved using this method) should be relatively easy to come up with by that time.
Do you use any schedules or plans to save for things, other than just depositing a percentage of your pay into your savings accounts?
I LOVE this idea!! I think I might steal it from you. So simple, but look how it adds up. Thanks so much for sharing!
ReplyDeleteSarah
Sounds like a fun planned spending increaser!
ReplyDeleteSince I'm working towards debt free, I'll be watching you complete this one this year.
This is a great idea. I set up automatic transfers for our paydays. I hadn't been doing it and noticed that we hadn't really been saving any money because we never had leftover money. I think that I might try your idea.
ReplyDeleteLove this idea!! I may steal this idea also!!!
ReplyDeleteYes, I have planned savings for spending (that is a mouthful)and that's part of why I like ING because they have a goal-setting tool that shows you how much to save each month if you want such and such an amount by such and such a date and then shows you in percent how you are progressing. I'm saving for Christmas, property taxes, insurance, trailer fees etc. I set up automatic payments though so I can just forget about it, otherwise I might spend it too soon!!
ReplyDeleteThis is definitely a great idea! Like Jane I use the sub accounts at ING. Very easy way to save.
ReplyDeleteI love this idea and am going to steal it from you if you dont mind. I think I will use it for a CD at the end of the 52 weeks!!!!
ReplyDeleteWhat a great idea! Is it ok to link this to my blog so others can be sure to read it
Judy
Absolutely Judy! Link away! I'm glad you liked the idea. :)
ReplyDeleteSo wouldn't you get concerned that as you approach the later weeks that it will start to reach a critical mass of money that suddenly is very hard to save?
ReplyDelete