Money Challenges

Here’s How to Use a Weekly Savings Plan to Improve Your Budget

June 9, 2020 By Kathryn Vercillo Leave a Comment

I recently attempted a no-spend month challenge. However, I didn’t succeed because I made several money planning mistakes. I considered trying it again for June. Then I changed my mind. Instead of doing a no-spend month, I’m trying something different. I’m using a weekly savings plan to improve my budget. This seems like a more practical approach for me given my current financial state.

What is a Weekly Savings Plan?

I should note that a weekly savings plan is very different from a no-spend challenge. However, in both instances, the point is to save money.

My goal with the no-spend challenge was essentially to spend as little as possible. Therefore, I would save as much as possible.

Similarly, a weekly savings plan is all about saving money each week. However, it may or may not be about “saving as much as possible.” Rather, it’s about setting a weekly savings goal and sticking to it.

This allows for more wiggle room than the no-spend challenge. After all, if I have $500 left at the end of the week, after paying bills, then with a no-spend challenge I wouldn’t spend any of that. If I’ve set a weekly savings goal of $300, I would have $200 left for spending. If it’s a struggle to not spend any money at all, that extra spending money can make things easier.

Benefits of a Weekly Savings Plan

Obviously, then, the benefit of a weekly savings plan as compared o a no-spend challenge is that you can still spend some money. Not having any frivolity throughout the course of an entire month can be daunting. It’s easy to fall off that horse, as I did last month.

In contrast, a weekly savings plan is a positive goal. “I’m trying to save this much” vs. “I’m not allowed to spend.” The positive twist makes it feel more doable. It is easier to stick with.

Of course, this would be true of any savings plan that’s framed as a goal. So what specifically makes the weekly savings plan a great idea? What’s most true for me, particularly as a freelancer, and particularly during pandemic time, is that it’s a very short-term goal that keeps resetting at the start of each new week. This is great because:

I don’t currently know exactly what I’m going to earn each month. Between changing jobs and clients making late payments due to their own COVID hardships, my income just isn’t clear. It’s a lot easier to see what I made last week or even to predict what I’ll make next week than it is to look at the entire month ahead. Therefore, a weekly savings plan makes a lot of sense right now.
I only have to meet a one-week goal. Therefore, the actual amount of savings could be tiny. It’s doable. And yet, it adds up. I get to save money for an emergency without feeling the pinch of setting aside too much at one time.
If I fall off course, I can easily reset the following week. Once I fell off course with my no-spend month, it felt like, “well, that didn’t work” and I kind of gave up. But this plan resets every single week. Hopefully, I’ll save the money each week. However, if I don’t, I can start again the next Monday.
The weekly reset also means that I can consistently recalibrate my goal. If it turns out that I’m not realistically able to save as much as I thought, I can review my budget. I can see where to make changes. And, if I’m lucky, and it turns out that I could save even more, then I can make a new plan in that direction as well.

How to Create a Weekly Savings Plan

So, does this sound good to you? Great. But how do you do it? Here’s my approach:

Where Do You Want to Put Your Savings?

What savings accounts do you already use? Is this where you want to put your money? I have two major savings accounts: a small one trough my regular bank and another high-interest savings account through WealthFront. I intend to put my weekly savings into the WealthFront account. But do what works for you, depending on how easily you do (or don’t) want to be able to access your savings.

Where Can You Pull Money From?

Before asking yourself how much you want to save each week, first ask: where could I stop spending? I combed through all of my subscriptions and spending habits to discover where it would be extra easy to cut back. For example, I was paying $19.99 per month for Lyft Pink. However, under quarantine, I’m not using Lyft as much. So, I can easily pause that account. Instead of spending that money elsewhere, I can put approximately $5 per week into my savings account.

Check to see if you can cancel the following things and redirect that money to savings:

Delivery service subscriptions including those associated with Amazon and Postmates
Streaming TV services such as Hulu or Netflix
Other monthly streaming services such as Audible or iTunes
Gym and spa memberships, especially if you aren’t attending during shelter-in-place
Online storage systems that you might not be using such as Dropbox or Google Drive

Similarly, it’s a great time to review where you might be able to reduce spending. For example, have you checked for discounts on your phone bill or cable bill recently? If you can save $10 or $20 per month, that’s money that can go into your weekly savings plan.

In other words, look at every single monthly subscription that you pay for. Cut out what you can. Divide the number you were paying monthly by four and add that to what you put into weekly savings.

Automate Your Weekly Savings Plan

As long as you aren’t on the brink of running out of money in your checking account, I highly recommend automating your savings. Once you’ve figured out how much you can save each week, set it up so that your checking account automatically transfers that amount weekly into savings. For example, if you can save $20 per week, change your account settings to automatically transfer $20 from checking to savings every Monday.

Do a Weekly Review

This part really helps. At the end of each week, review your money. Did you earn what you expected? Did you spend what you expected? As a result, did you save what you expected? If you have to adjust your weekly savings plan accordingly, do so.

Most importantly, check if you have any more money at the end of the week than you anticipated. If you do, set aside a portion of that as bonus savings for the week. You might want to create a rule. For example, “I will add 10% of any extra money for the week to my savings account.”

Can You Earn More In Order to Save More?

Whenever you create a savings plan, it’s important to also look at where you might earn more income. What could you do this week in order to have more money next week? Could you do a quick freelance gig? Maybe you could declutter and sell some items? You might put all of your extra income into your savings. Alternatively, you might put a percentage of what you earn aside each week.

Other Weekly Savings Plan Ideas

My approach is only one way to do a weekly savings plan. Here are a few other options:

Set a specific savings goal for the year, quarter, or month. Then divide that accordingly to figure out what your target weekly savings goal is. Plan your budget to accommodate this goal. This is especially helpful if you’re saving up for something specific such as a wedding or a vacation.
Try an incremental weekly savings plan. Save $5 in week one. Save $10 in week two. Then, save $20 in week three. You can keep adding it up throughout the year. Alternatively, you can start over at the beginning of each month. This is a low-key way to challenge yourself to save more. There are many variations on this. Check out the 26-week savings challenge and the bi-weekly savings challenge as two examples. The Daily Nickel Challenge is yet another variation on this.
You can also do the reverse of the incremental plan. You can start by setting aside a higher amount each week for one month and then a little bit less per week the following month. Here’s an example of this kind of plan.
Use a physical calendar to mark down what you get paid and what you “owe” yourself each week for savings. Here’s more info on that.

Do you prefer to budget by the week, the month, or the quarter? Why does it work for you?

5 Things I Did Wrong With My Challenge to Spend No Money in May

May 28, 2020 By Kathryn Vercillo Leave a Comment

Back at the end of April, I realized that I needed to save a lot of money really quickly. I decided to set myself a challenge to spend no money in May. Of course, I knew that I would have to pay certain things, such as rent. But I decided to try not to spend anything above and beyond the unavoidable costs of living. It seemed like a good idea. However, I failed at it. Here are the five things that I did wrong with my challenge to spend no money all month.

1. Failure to Set SMART Goals

If you want to make and stick to a budget, then one of your best bets is to use SMART goal setting. This would ave served me well with my challenge to spend no money. If I had been more specific, creating measurable goals for myself, then I might have stuck to the plan better. Instead, my plan was too vague.

My plan was simply not to spend money unnecessarily. I defined necessary as: “

2. Ignoring the Strength of My Cravings

The number one thing that I consistently spend too much money on is food. I spend money on farm food delivery, ordering takeout, getting stuff at the grocery store, shopping at the farmer’s market. I buy high-quality, local, small batch food. It’s not cheap.

I told myself that I was going to be able to just “shop the fridge” for the entire month of May. Technically, I have plenty of food in my pantry and my freezer. I got a big farm food delivery right at the start of the month. I should have been able to stick to my challenge to spend no money on food.

Nevertheless, I broke down within the first third of the month. I got bored of the food I had at my house. I developed stronger and stronger cravings. Tasty, satisfying food sounded too good to pass up. In this instance, I think I should have budgeted for a certain amount of treats. I didn’t, so I just let the entire plan fall by the wayside.

3. Giving Up Too Quickly

My big failure, truly, was not getting back up on the horse once I fell off. For example, once I ordered takeout once, I gave in. I didn’t try all that hard to stick to my challenge to spend no money all month. I let myself fall into that pattern of, “well, I already messed up, so I might as well not bother now.” I didn’t go crazy spending money on everything, but I did stop trying to restrain myself on food spending. Inevitably, that led to other slip-ups as well.

The lesson here is that as soon as you make a “mistake” in any plan, you should get right back to the plan. Don’t wait. If you’re on a diet, and you eat a bite of chocolate cake, that’s okay. Be gentle with yourself. However, don’t use it as an excuse to eat the whole slice, then the whole cake, then cake every day for a week. The same thing is true when it comes to money challenges. If you spend, it’s not a license just spend more. It should be incentive to start anew with the original plan.

4. I Let My Puppy Change My Plans

What can I say? I have an adorable young puppy who currently dictates a lot of the choices that I make. It’s hard raising a puppy! It’s also expensive.

Of course, I accounted for some of the puppy’s costs in my original challenge to spend no money in May. I spend a lot of money on my dogs’ food. I knew I wasn’t going to “shop my fridge” for the dogs. Therefore, their food costs were part of my “must spend” exceptions. That’s okay.

However, there were a lot of costs I didn’t anticipate. I could have resisted most of them, and yet I opted not to. For example, I decided that my puppy needs to start going out twice per week with a dog walking pack. I just can’t give him the exercise that he needs without compromising my own work flow. I did consider fee-free options. For example, I thought about partnering with another local pup owner, offering to take their dog twice a week if they would take mine twice per week. But ultimately I decided that the ease and convenience of an established pack made the most sense.

They don’t invoice me until the end of the month. Therefore, I technically didn’t break my challenge to spend no money. I won’t pay them until June. However, I’m aware I’m accruing unplanned costs. Moreover, it led to additional immediate spending. He didn’t have a good collar or a tag with his phone number on it. I didn’t want him going out without me if he didn’t have those things. So, off to the puppy store we went.

And we are actually going to have to go again, because I just realized today that this chews-everything puppy chewed his collar to the point that it won’t work anymore. Speaking of chewing things, I also paid to replace my phone charger cords because he chewed through those. Ah, the unexpected costs of a puppy.

5. Failure to Tie The Challenge to My Deeper Values

Ultimately, I think the real problem is that I wasn’t truly committed to my challenge to spend no money. I didn’t pay attention to the “R” part of SMART goal-setting, which is the rule that goals must be “relevant.” In other words, you are most likely to stick to a goal if you find that it ties in to your deeper core values. I do think saving money is important. But I hadn’t really done the deep work around this.

I wanted to save money because I was feeling the strain of financial changes. However, I suppose that deep inside, I resented those restrictions. Since I hadn’t tied the goal to things I believe in, it was easy to slide off track. Once I had, it was easy to just keep sliding.

So, I’ll have to rethink things. I do still need to save money. Should I try another challenge to spend no money in June? If I incorporate what I learned here, I might be able to make it work. But perhaps a stricter budget with some freedom to spend a little might work out better for me. I’ll have to think on it.

What most often holds you back from sticking to your financial goals?

How Should I Approach a No-Spend Month Challenge?

April 29, 2020 By Kathryn Vercillo 1 Comment

It has been a very long time since I took on a personal no-spend challenge. I’ve done well with budgeting and saving in recent years. Therefore, challenges like that have fallen by the wayside. However, due to a variety of financial challenges in the past year, including challenges associated with COVID-19, I am in the position where I would like to save as much money as possible. Therefore, I plan to make next month a no-spend month.

What is a No-Spend Month?

A no-spend month is one of the toughest money challenges. In fact, when you look at personal finance challenges, you’ll often see that they recommend a no-spend week or even just a single no-spend day. Can you go a single day without spending money? Usually, yes. But a whole month?

The idea behind a no-spend challenge is, obviously, not to spend any money. Of course, the reality of my life is that I can’t spend zero dollars in a whole month. There are certain bills that I absolutely have to pay. For example, I can’t just fail to pay my rent this month. So no-spend in this case really means “no unnecessary spending.”

What Spending is Truly Necessary?

In order to actually maximizing my savings from this personal finance challenge, it’s important for me to get really clear on what I mean by “unnecessary spending.” After all, it’s easy to justify expenses as “necessary” when you really want to purchase something. That can quickly defeat the purpose of the challenge.

Here is how I have chosen to define what spending is necessary during this challenge:

Spending is necessary this month only if failure to spend would incur objectively negative repercussions.

For example, if I don’t pay my rent, then I upset my landlord and incur a late fee, which is a negative repercussion by objective standards. If I had no food in my house at all and didn’t spend money on groceries then there would be health repercussions. However, since I have food in my house, I can use what I already have. Therefore, spending on extra food is unnecessary.

Where to Make Spending Cuts This Month

It will be necessary to spend money this month on rent, utilities, and credit card minimum payments. Next I need to go through the following items and see if I have enough of them to last all month:

Food for myself
Food for the dogs
Household supplies (such as trash bags)
Personal care supplies (such as shampoo)

Those items are necessary. However, if I have enough to last the month, then I want to use what I already have instead of purchasing anything new. If that means eating rice and things-previously-frozen for a whole month, so be it.

I’m pretty sure that I actually have enough of all of those things to last the month, except the dog food. The dog food is already slated for automated delivery.

What About Monthly Subscriptions?

Speaking of automated delivery, there are a lot of things I’m automatically signed up for each month. I use delivery systems to get weekly produce deliveries, bi-weekly complete meals, the dog’s food and meds, my own meds, my contacts and shaving supplies and so many other things. I can go through and pause some of those subscriptions for the month.

For example, I have plenty of razors so I can pause the shaving goods delivery. I do not have enough contacts to last the month, though, so I have to decide – does a no-spend month mean that I just wear glasses all month long? In this case, yes. I want to save as much money as possible. I return to my rule: Spending is necessary this month only if failure to spend would incur objectively negative repercussions. Wearing glasses instead of contacts for one month isn’t objectively negative. Therefore, I’ll pause that subscription.

Dealing with Shared Subscriptions

What about the other things that I subscribe to, though? For example, I have Netflix, Hulu, and Philo subscriptions for watching television. Should I cancel those? Is it worth the hassles of canceling them for only one month and then resuming them? After all, they aren’t that pricey. And yet, taking a month off of them would not objectively incur negative repercussions. If I’m going to be ruthless about saving absolutely as much as possible, then I need to cut those out.

There might be a loophole here, though. I share some of my subscriptions with my family members. For example, I pay for Netflix and Hulu accounts that allow multiple users. My parents and siblings utilize my account. I have never asked them to chip in because I would pay for those things anyway. But perhaps now is the time to ask them if they want to pay for a month of service or if I should cancel it completely during my no-spend month. If they chip in, I don’t have to spend anything and can still enjoy the entertainment. If they don’t think it’s worth it, then I’ll go ahead and cut it off.

The Purpose and Benefits of a No Spend Month Challenge

There are multiple benefits to attempting a no-spend challenge like this one. First and foremost, it cuts out all unnecessary spending, which means saving a lot of money. That’s the key reason that I’m doing this. I want my finances back on track and eliminating all possible spending is critical to that.

However, this is also a great chance to reset financial priorities. It’s so easy to get in the habit of routine spending. I eat out a lot through Postmates. I flip frequently between the three different streaming television apps that I use. These things are nice, and on their own they are not that expensive, but those little costs add up. By cutting everything out for a month, I can get a better sense of what I truly want to spend money on each month. Perhaps I’ll discover that I don’t want to resume any streaming television. Or maybe I’ll pick just one of the three to resume after the no-spend month is up.

Finally, this type of money challenge helps me really tune in to my impulse spending. It’s so easy to stop into a coffee shop and pick something up (even in these socially distanced days!) That’s why even a single no-spend day or week can be beneficial; it shows you clearly where you’re just throwing money away. A full month of this attention to spending always helps me get back on track. I’ll keep you posted on how it goes.

Have you ever done a no-spend money challenge? For how long? What were the best and worst parts of it?

$1 A Day Savings Challenge

December 31, 2019 By Jeffrey Strain 4 Comments

If you’re looking to save a bit more money this year, an easy way to accomplish this is to do a $1 a day savings challenge. There are a lot of different challenges out there that try to catch your attention but even when they aren’t that complicated, they still aren’t nearly as simple as the $1 a day savings challenge. The concept is easy and straightforward. All you need to do is put away one dollar a day and at the end of the year, you’ll have an extra $365 in the bank. That’s all there is to it.

In fact, the hard part of this challenge is figuring out where to get an extra dollar a day. This shouldn’t be too difficult to figure out for most, but if you’re having trouble, using a random making money idea generator can help you come up with ideas to create that extra dollar a day.

This challenge is actually too simple for a lot of people. It’s so straightforward and easy that they don’t see a challenge in it. There are certainly a number of different ways to adapt this challenge to make it seem more complicated, but we hope you can learn how to embrace the simplicity that comes with this savings plan. Learning to relish the simple ways to save will make saving money a lot easier for every aspect of your life in the long run. In fact, while saving money is important, far more important is getting into the habit of saving a little bit (in this case, $1 a day) and forming that habit.

How Dollars Can Add Up

If you want to save more money, you can adjust the daily amount saved to increase your overall savings. If you opt for a $2 a day savings challenge you’ll end up with $730 at the end of the year. Still not
enough? The $3 a day savings challenge will net you $1,095 at the end of the year and the $4 a day savings challenge will put an extra $1,460 into the bank after a year. You can even try the $5 a day savings challenge to end the year $1,825 richer. There’s no need to stop there if you want to save even more money.

As mentioned above, while this truly is the easiest fashion to save money, there are some people who need a little something extra or some type of twist to make saving money more of a challenge. A couple of
good examples are the 365 penny a day challenge that will save you nearly $668 at the end of
the year and the classic 52 week money challenge that will help you save $1,378. If you’re looking for a $1 a day savings challenge more along these lines, that’s certainly possible as well.

$1 A Day Savings 52 Week Money Challenge

If you want to save approximately $2,000 for the year, there’s a simple way to accomplish this by combining the $1 a day savings challenge and the 52-week money challenge together. In this case, you would save $1 a day for 5 weeks, $2 a day for 5 weeks, $3 a day for 5 weeks, $4 a day for 5 weeks, $5 a day for 5 weeks, $6 a day for 5 weeks, $7 a day for 5 weeks, $8 a day for 5 weeks, $9 a day for 5
weeks and $10 a week for 5 weeks. Those 50 weeks will help you save $1,925 and then you can determine how much you want to save for the final two weeks of the year ($5 a week for the final two weeks will get you to $1,995 and $6 a week for the final two weeks will make your yearly savings $2,014).

This $1 a day savings 52-week money challenge is far more complicated than the $1 a day money challenge, but as we mentioned, there are some who find having to save different amounts each week more of a
challenge. This is when it’s important to understand what motivates you most when saving money. Both of these are year-long challenges which means you’ll need a lot of dedication and motivation to see them
through. Choosing the challenge option that can best appeal to what motivates you most will be essential to successfully complete either challenge.

Savings Tip: Cutting Down on Monthly Spending

October 16, 2019 By Susan Paige Leave a Comment

Without a proper budget and financial plan, it’s easy to spend out of your means monthly and find yourself in debt without even realizing it. Expenses can add up quickly, and you may end up spending more than you are making.

There are plenty of great methods to cutting down monthly spending that may be worth looking into when you find yourself needing to save money.

Get Some Extra Income

If you found that after creating your budget you do not have extra money to cut down on, another viable option is to get another part time job. This can be reselling clothes on a resell platform, or driving for a ridesharing app.

If you find yourself with some extra hours on the weekend, you can make some extra money to cover extra expenses! Getting a part time job bartending or waiting tables on the weekends could really potentially supplement your income, even if it is just a few extra hours during the week.

Another excellent option for getting an extra influx of cash is taking out a loan, specifically a title loan. This type of loan can let you keep driving your car while you pay off the loan and have some extra money for your budget.

Calculate What Your Spending Habits

Most people love to drink coffee in the morning. Whether it be from a big coffee chain like Starbucks or a tiny little café on your way to work, coffee expenses can add up quickly, and you can be spending over $185 a month on espressos alone! This can be an example of spending outside of your means.

One of the ways to manage your spending habits can be tracking your spending habits. An easy way to do this can be keeping a spreadsheet in your phone and recording what you spend, as well as tracking your automatic debits for more accuracy. Every time you go out to eat, or pay a credit card bill, mark it in your expenses category that matches what type of expense it is!

Create a Realistic Budget

When you find yourself in a financial pinch, sometimes one of the best steps can be creating a budget to understand your financial situation. The first step to creating a realistic budget it to start tracking your monthly expenses. Then, you can separate the expenses into two categories:

Fixed Expenses-These are expenses that do not change from month to month. They can be items like mortgage payments, rent, car payments, or utility bills.
Variable Expenses– These are expenses that will change from month to month. These are generally items like gas, eating at a restaurant, groceries, and entertainment.

By separating your monthly expenses into two categories, you are able to track what money you can save by seeing where you are overspending. If you are spending too much in your fixed expenses, consolidating bills or debt may be your answer.

If you are spending too much in the variable expenses, you may be eating out too much and need to start taking your lunch to work.

Get Control of Your Finances

With the right financial plan, you can get in control of your finances and help cut down on your extra spending!

For more on this consider reading our articles on:

The 52 Week Money Challenge

The 365 Day Money Challenge

The 52 Week Mega Money Challenge

Image source: Pixabay.

Savings Challenge: $1000 by Black Friday

October 2, 2019 By Flanice Lewis Leave a Comment

There are eight Fridays between now and Black Friday. Those are eight opportunities to save up for holiday shopping, especially if you budget or get paid weekly. If you get paid biweekly, you have four or five paydays to save up. If you don’t think you have room in the budget to save, then you’ll need to get creative to reach $1,000 by Black Friday.

Reaching your goal will be easier if you break it up into small chunks. Here are five ways to save $125 per week.

Easy ways to start saving are to cook more of your meals at home and use coupons for groceries. Also, bike, walk, or take public transportation instead of driving if it is more affordable. Skip happy hour and try potlucks at home to spend time with friends. Additionally, review your subscriptions and services you may not use. Cancel Netflix and sign up for free with a new email address for 30 days. You will have saved $12.99 already. If you don’t think that’s a lot, keep in mind that everything will be on sale for Black Friday so that $12.99 plus any interest earned can buy a toy, doll, action figure, coloring book, or pair of kids’ shoes. Dig deep into your budget to see where you can save.
Now is a good time to shop around for new car insurance, cell phone plans, or bank promotions. You can make hundreds of dollars by lowering your monthly expenses and putting the savings into a new account. If you decide to have $125 per week or $250 every two weeks direct deposited, you could have an extra $100 or $200 in your account by the end of November.
Sell items to earn $1000 without having to change your lifestyle. If you’re going to purchase the latest gadget, then sell your old one. You’re probably going to buy clothes and shoes, so make room by selling items on Poshmark. Additionally, You should sell things that still have tags because you will get more. Do you have any watches or other jewelry collecting dust? You can sell them on eBay. If you handmake items, sell them on Etsy. Some brick and mortar consignment shops will buy unused products from Bath and Body Works and Victoria’s Secret.
Extra Work. Side hustles are old faithful for extra money towards a goal. Wash cars, mow lawns. If you’re in the northwest where it’s already snowing, plow driveways and sidewalks. If your job offers overtime, take advantage.
Get a seasonal job. Many businesses hire seasonal workers. Some start earlier than others. Know that it will be two to three weeks before you receive your first paycheck. Plan to set all of the money earned aside for holiday shopping. If you know you want to purchase items at a particular store, try to get a seasonal position there. Many offer employee discounts, even during the holidays. I worked as an associate at Coach after college during the holidays. I started as a seasonal employee and became eligible for the discount and other perks in time for Christmas.

If you’re not into holiday shopping, this plan is an easy way to beef up your emergency fund or save towards a goal. These tips are useful for any dollar figure or event you’re planning. If you have an anniversary trip six months from now, you could have $3,000 saved by following the same plan.

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