Saving money can feel daunting, especially if you haven’t developed the habit. But it doesn’t have to be and weekly savings may make the process more manageable. Instead of keeping your challenge dollars in a piggy bank or jar, try setting up an automated transfer to an interest-bearing savings account. Here are some reasons why weekly saving could be the way to go:
1. It’s Easier to Stick to
If you struggle to stick to monthly savings goals, weekly or bi-weekly savings might be more effective for you. If you get paid monthly but are aiming for a year-long goal like paying off debt or saving for retirement, it can feel intimidating to set up a savings plan that requires a larger number to save than you are used to seeing on a paycheck.
On the other hand, if you break down that annual figure into something more manageable, such as a percentage of your income, it can be easier to commit to. For instance, if you need to save 20% of your salary annually, saving that amount on a weekly basis can be easier than committing to it once per month.
Once you’ve gotten comfortable with weekly or bi-weekly savings, you can start to make bigger changes. You should always remember how many weeks are in a year. You may want to try a money challenge or learn how to budget your expenses around savings. This can be essential for reaching major financial goals, such as buying a home and retiring debt-free.
It’s also important to be mindful of lifestyle creep, which can occur when you start earning more but don’t adjust your spending habits accordingly. Having a weekly savings goal in place can help you keep track of your spending and prevent you from automatically spending any raises or windfalls.
2. It’s More Rewarding
Saving can be a hard habit to develop, and even if you have the best intentions, there may be some weeks where it’s difficult to find any extra money to put aside. But breaking up a savings goal by the week can make it easier to stick with, and it also allows you to see your progress over time.
One of the most popular ways to save on a weekly basis is to complete the 52-week money challenge, which requires you to deposit a little bit of cash into your savings account every week, increasing by $1 each week until you reach your final goal at the end of the year. This type of weekly savings plan is especially useful for those who get paid bi-weekly or monthly because you can divide up the money by how often you’re paid.
Another way to keep up with your weekly savings is to set up an automatic transfer into your savings from your checking account each payday. This is a great way to ensure your savings doesn’t get eaten up by unexpected expenses or impulse buys, and it can help you build up your savings faster because the money will be automatically accumulating through interest earnings each month. It’s also helpful if you’re working on a larger long-term goal like a down payment on a home, as it gives you the added motivation to get there sooner rather than later.
3. It’s Easier to Increase
If you find that your weekly savings are not growing, it may be time to consider a new strategy. One popular option is the 52-week money challenge, which aims to help you save over a year by increasing your deposit amount each week. This is a great way to see your progress on a regular basis, and it can also improve your self-discipline, encouraging you to stop spending so much.
Another simple idea is the “keep the change” savings challenge, which involves keeping any cash transaction receipts or loose change after each purchase and transferring them to your savings account. This can be especially helpful for people who make many small purchases that add up over the course of a month, such as lattes or takeout meals. Alternatively, you could simply keep track of your credit card and bank statements to identify any unnecessary payments (like subscriptions for video streaming or music platforms, software licenses, box subscriptions, or regularly delivered products) and ruthlessly cancel them.
Another option is to set up automatic transfers from your paycheck or other sources each week into a savings or investment account. This can be easy if you receive your salary on a biweekly schedule and can be even easier if you use direct deposit. You can also set up a reminder in your phone or a calendar application, so you don’t forget to transfer your savings each week.
4. It’s Easier to Compound
If you’re ready to shake up your savings, try the 52-week money challenge. This strategy allows you to gradually increase your weekly deposit each week, starting with $1 in week one, $2 in week two, and so on until you reach $52 in the final week of the year. It’s an easy and exciting way to see a big payoff without having to drastically cut back on expenses.
Saving regularly can also help you make more of your own money, thanks to compounding interest. Savings accounts often accrue interest on a daily, monthly, quarterly, or annual basis, depending on your bank and the type of account you choose. By allowing your savings to grow on their own, this process can help you earn extra cash, which you can then add to your current deposit amount.
Whether you want to use your weekly savings as an additional savings goal or to save for a specific purchase, you’ll need to find the right place to stash your money. While a piggy bank can be an effective tool, it may not be a good fit for everyone. A savings account can provide a safe and secure place to store your funds, while keeping them out of sight and mind to prevent impulsive spending. And if you’re not quite ready to commit to a full savings challenge, consider a more flexible weekly or biweekly plan instead, like the Weather Wednesday savings challenge, where you make your deposit based on the day’s high temperature.
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