emergency fund

52 Week Money Challenge

December 6, 2017 By Alexa Mason 53 Comments

If you’re looking for a great way to start saving money right now that will net you over $1300 in 1 year, we’ve put together an easy system which offers a good amount of flexibility to give you the greatest chance of success. This is a hybrid of the original 52-week money challenge putting more control in your hands to deal with the inevitable financial challenges which come with daily life.

How the 52 Week Money Challenge Works

In a lot of ways, the 52 Week Money Challenge is similar to a game of Yahtzee. There are 52 weeks in the year with a dollar amount corresponding to all 52 weeks. Each week your goal is to try to save the highest amount that is still available from the bottom numbers. While the highest dollar amount is the goal, there will certainly be weeks when you aren’t able to save the full amount. Whatever amount you are able to save each week, that is the number that you write and then cross that number off the bottom.

Click image to enlarge or print here (pdf)Your goal for the first week is to save $52, but even if you aren’t able to reach that amount, you haven’t failed. In this way, it is similar to Yahtzee. Whenever you roll the dice, your ultimate goal is to try to get a Yahtzee, but depending on how things are going with the rolls, you attempt to get the best number you can from the still open hands on your card. In this challenge, you’re doing the same thing, but just with the dollar amounts, you’re able to save each week.

For example, say that you are able to save $42 the first week you begin the challenge. You would X out the $42 at the bottom of the chart and place it in the deposit line for week one and that would also be your balance since it is the first week. In week two you are able to save $18. You X out the $18 at the bottom of the chart and place $18 in the deposit line. You then would place $60 as the balance ($42 + $18) for week two. In week three you’re able to save $52 which you cross off, add and come away with a balance of $112. In week four, you have a tough week and are only able to save a single dollar. You cross it off, deposit the $1 and up your balance to $113.

Because you choose the amount to save each week in relation to your finances (always with the goal to try to save the top dollar amount still available at the bottom of the chart), you don’t fail the challenge just because you have a few rough weeks where you aren’t able to save a lot of money. We all have good weeks and we all have bad weeks and they don’t come about uniformly. By trying to save the most you can each week which takes into account the financial realities of that week, it gives you much-needed flexibility and a better chance of success compared to having a set dollar amount you must save each week that corresponds to that specific week.

Another advantage is that there is no need to begin this challenge at the beginning of the year, but you can start at any time. Week one is the first week you begin (as opposed to the first week of the calendar year). That means that if you come across this challenge in the summer, there is no need to wait half a year to begin. You can start today. Simply designate one day of the week when you will make the deposit and you are ready to go for an entire year from that point.

Get Started, Get in the Habit of Saving

The most important aspect of this challenge is that you simply begin doing it. Even if the first few weeks your saving amount is low, you are getting yourself into the habit of saving. As you become comfortable with that habit, you should find more ways to save that will help you knock off those bigger numbers always knowing that you have some small numbers there as well if finances get tight some weeks. Once in the habit, you may find it easy to save even more. There are also now kids versions of this challenge which replace the dollar amount with quarters, dimes, nickels or pennies depending on how old your child is and the amount that he wants to save.

Print the 52 Week Money Challenge by clicking here. Before you get started, also check out the 52 Week Money Challenge forum group where you can share how your challenge is going with others and both receive and provide support for others participating in the challenge.

Saving Tips to Handle Financial Emergencies

January 10, 2017 By Alexa Mason Leave a Comment

A financial emergency can be a highly stressful situation, if you’re not prepared for it. Those unexpected financial problems are one of those situations that prove the adage “An ounce of preparation is worth a pound of cure.” But what constitutes a financial emergency, and how do you adequately prepare for it?

What Is a Financial Emergency?

Most people realize that it’s wise to have an emergency fund, but their actual definition of what constitutes a financial emergency differs. It’s important to realize what a financial emergency really is so you know when you should and shouldn’t dip into that emergency fund.

A financial emergency is when you have a loss of income, or an unexpected and necessary expense. Common examples include:

Job Loss
Medical Emergencies
Car Accidents

Obviously, you shouldn’t use your emergency fund just to buy something you want, whether that’s a plane ticket, a new car, or something else entirely. Also, you shouldn’t plan to use your emergency fund on expected expenses. For example, your car needing a timing belt replacement at 180,000 miles isn’t an emergency; it’s an expense that you should plan for in advance.

So, you need an emergency fund in case of financial emergencies. While the right amount to save varies based on your specific circumstances, financial experts typically recommend at least 3 to 6 months of expenses. How can you save and build up that emergency fund?

Reduce Your Debt

It’s typically smarter to pay down your debt before you start saving money, because the interest you pay on the debt will cost you more in the long run if you wait to pay it off. However, the type of debt also plays a part in whether you should pay it off before you save. Long-term loans with lower interest rates, including mortgages and auto loans, are too large to pay off right away. You’d be waiting years to start your emergency fund if you wanted to pay off your mortgage first. Short-term loans (for example, car title loans and payday loans) and credit card debt carry higher interest rates, so pay those off as soon as you can.

Set Up Your Budget

The main reason people are unable to build up an emergency fund is because they either don’t make a budget, or they don’t stick to their budget. Make a list of all your expenses compared to your current income. Then, set aside a portion of your monthly income towards your emergency fund.

What if you don’t have extra income after you pay all your expenses? That means you’re barely living within your means, and any financial emergency will put you in a bind. You have to either find a way to reduce your monthly expenses or increase your income to avoid a difficult situation in the future.

No Impulse Buys

Retailers love to lure in customers for the impulse buys. Some people get lured in by the smaller impulse buys – those magazines at the checkout lines, for example. Others see that big “Sale! 20% Off” sticker and decide they just have to have that now-$800 mattress.

Adopt the mindset that if it’s worth having, it’s worth waiting to buy. When you’re out and you see something you want, sleep on it. Buying a $5 magazine every time you go to the store adds up and takes away money you could have been sticking in your emergency fund. That comfortable mattress may be $200-off, but if you already had a decent bed, then you’re really just spending $800 for no good reason.

Don’t Buy Anything You Can’t Afford Immediately

One of the main ways people get into financial trouble is by spending money they don’t have. The most common solution to this is not using credit cards, and if you aren’t able to control your spending, that may be the way to go. However, credit cards have their benefits – almost all of them earn reward points, which are a great way to get a return on your spending. They also protect you better than debit cards if you need to dispute a charge.

Instead of locking up those credit cards, just treat them like your debit card. If you don’t have the money for something, don’t buy it. Pay your credit card off in full every month to avoid credit card debt.

Financial emergencies are a fact of life. You probably won’t be able to avoid them entirely, but you can minimize their impact on your life by keeping an emergency fund ready when you need it.

Photo: Tax Credits

Why Should You Save?

January 8, 2016 By Amanda Stewart 1 Comment

There has always been importance placed on saving money, but why? If you have enough money to pay for what you need, then why do you need “excess” money to put aside? Well, everyone saves for different reasons, and if you are still looking for one, here are a few reasons you should be saving right now.

Vacation

What better reason to save than for a vacation? If you’ve wanted to go away for a while, go on a cruise or visit a city you’ve never been to, it takes some planning (and saving). You can have fun with your money, but you have to save to be able to do that.

Retirement

Even if you are young, it is never too early to start saving for retirement. No one wants to work forever, and most people aren’t able to work once they get older. Putting aside money so that you’re able to retire is important. This is often hard because you won’t see this money for many years, but it will be well worth it.

Emergency Fund

Everyone needs to have a savings account where they set aside money for emergencies. Whether it is an unexpected flat tire, car repair, medical bill or even unexpected charge on your bank account, you should always have some extra money set aside for emergencies. If you do not, many people use their credit cards if they do not have an emergency savings account, which leads to more debt, which is not ideal. Usually, you’ll want to have about $1,000 set aside in this account just in case. This will cover most car repairs and many other emergency situations. Once you use it, you need to work to save it back up.

Buying a House

Another reason to save is so that you can buy a house. Renting a home or an apartment is practically like throwing money out of the window. Sometimes, renting is all someone can afford or all they can get with their current situation, which is fine. However, if you are able to, you should save for a down payment on a home. Owning a home will pay off in the long run, so your saving efforts and the amount you spend on a home will be well worth it.

New Car

Just like a house, you can save to buy a new car, or save to pay off your car. If you currently have a car payment, your budget can become a lot more free if you set aside some money to pay off your car (or buy a car in full if you don’t have one yet). Usually, if you have the full amount to put on the car, the dealership will also strike you a deal, which is another great reason to save.

These five reasons to save are only a few. Everyone has their own reasons for saving, so it is important to discover what means the most to you. Whether it is having an emergency fund, buying a car or saving for retirement, savings is extremely important when it comes to how you are able to spend your time (and your money).

Gas Price Fall Is Helping Put Money into the Pockets of the Working Poor

January 18, 2015 By Jeffrey Strain 2 Comments

Lower gas prices will save average US family $750

While Wall Street may not take kindly to the falling price of oil and the effects it has on the stock market, falling gas prices have been a bonanza for working families across the US. This is the same segment of the population who has benefited the least from the economic recovery over the last five years. For may families, it’s a welcome trend which has allowed them to loosen their budget a bit after having to severely tighten it as gas prices rose a year ago.

It wasn’t too long ago that there were predictions that the falling oil prices would save the average American family about $550 a year. That savings estimate has continued to grow as oil prices continue to fall. The US Energy Information Administration (EIA) is now predicting the average US household will save as much as $750 this year due to lower gas prices. For families who live in areas of the US where propane and heating oil are used to stay warm during the winter months, they may benefit from an extra $750 in savings on these costs. That means that some families will save as much as $1500 simply due to the lower cost of fuel.

Even better for the family budget is that this is after-tax money saved. It’s much more beneficial to a family than if a person within the family had received a $1500 raise, because there’s no need to pay any taxes on it. This money can be saved, or supplement other parts of the family budget which had to be cut in order to balance the budget when gas prices were high.

While this may not seem like a lot to some families, it is a huge amount to the working poor, and those living paycheck to paycheck. It gives them a little budget breathing room, and the opportunity to pay off debt and begin building savings. The best course of action is for those families who have been on tight budgets to save some of this unexpected windfall for the future. It’s an excellent time to use some of the saved money to build an emergency fund for those who don’t currently have one. This can easily be accomplished with a gas savings challenge.

Another important reason to put away some of this savings is because these low prices aren’t likely to last forever. In fact, while prices are expected to stay low for the near future, they are predicted to rise as the year goes on. As the EIA report notes that retail gas prices averaged $2.14 a gallon on January 12, which was the lowest price since May 2009. They expect these prices to stay in this range for the first quarter of 2015 ($2.16), but then will begin to rise. The report predicts gas prices for 2016 will average $2.72 a gallon. While still well under their all time highs, it’s still a significant increase over what prices are today.

(Photo courtesy of Zepfanman)

How to Save $100 in One Month with Quarters

January 8, 2015 By Jeffrey Strain 4 Comments

Many people are looking for ways to increase their savings or create an emergency fund as part of their New Year’s resolutions. The 52 week money saving challenge (along with all of its variations or even the 365 day penny challenge) have become a popular way to do this over the past few years. One issue some people have with the challenge is the length of time it takes to complete. It takes a huge commitment to do a challenge for an entire year, and it can be difficult to do when the inevitable crisis in life unexpectedly happen. For that reason, some people would prefer to focus on a shorter period of time.

One good way of doing that is to do a 30 day challenge instead of a 52 week challenge. It’s a shorter period of time, which makes it easier for some to stay focused, and it can easily be repeated month after month for those who find it’s helping them save money. When doing a 30 day dollar challenge, a person can save nearly $500 in a month, but that amount may not be realistic for someone who are currently living paycheck to paycheck. They are looking for a way to put that first $100 away into savings so they can build from there. For those people looking for a way to save $100 in one month, the 30 day quarter challenge may be the perfect option (click on the image above to print out the challenge).

For this challenge to be successful, it’s important to have a container (an old mason jar works great, but any container which can hold money will work). Place this container and the printed challenge sheet someplace in your house you’ll see it multiple times a day. You want to be reminded you need to make that deposit, and then to physically do it each day.

The challenge works by adding the number of quarters which correspond to each day you’re doing the challenge. On day one, you simply deposit $0.25 into your challenge jar. On day two, you deposit two quarters into the jar, day three you deposit 3 quarters and on day four you deposit 4 quarters, or a dollar. You continue this for thirty days, and when you deposit 30 quarters ($7.50) on the last day, you will have saved over $100 ($116.25 to be exact) in a month.

While saving more than $100 is one great aspect of this challenge, the most important aspect of the challenge is it will help develop the habit of saving a small amount of money everyday. This is the reason creating the jar and placing it someplace noticeable so you physically add the amount each day is so important. Creating this habit (experts say it takes about 21 days to form a new habit) will be one which will help your finances immensely in the months and years to come. Once the habit is formed, you can continue doing the 30 day money challenge month after month, adjusting it to where your finances happen to be each month. Before long, you will have a fully funded emergency fund in place which will give you some breathing room when the unexpected does happen.

Set It And Forget It Savings

Another option that might be easier is using a savings app like digit.co. This app basically analyzes your account, and puts away small amounts (that you likely won’t notice). This can either accompany the savings you’re building with the quarter challenge, or it can be a great alternative. You can sign up for digit.co here.

The 52 Week Cheap Gas Challenge

January 2, 2015 By Jeffrey Strain 2 Comments

One of the biggest problems many people face with the 52 week money challenge (or any of the many alternative versions) is trying to figure out a way to create extra money within their budget to put toward the challenge. While a dollar or two doesn’t sound like much to begin with, the challenge requires finding $200 in the last month. If a person is living paycheck to paycheck, how are they going to find money to put toward the 52 week money challenge if they haven’t been able to up to this point? The truth is, most people have a number places where they can find some extra money to put toward savings, but even if you believe you don’t have any extra room in your budget to save for the challenge, there’s still an easy solution to your problem.

It wasn’t too long ago when gas prices were well above $3.00 a gallon, and in some places, more than $4.00 a gallon. That’s no longer the case, with a large oil glut which has significantly brought down the price of a barrel of oil (and as a result, gas prices) in the last six months. According to AAA, the average price of gas across the US at the beginning of 2015 is $2.23. It was more than $0.50 more a gallon a month ago (the average price then was $2.76 a gallon), and more than $1.00 a gallon more a year ago, when the average price was $3.33 a gallon.

The 52-week cheap gas challenge simply takes into account that you’re spending a lot less on gas today than you were in the recent past. You managed to survive paying a higher price for gas, so you should be able to continue to survive by paying that amount even today. The goal of this challenge is to take the difference between the two prices and use that to create yourself an emergency fund. It simply works like this.

Step One: Pick a price per gallon as your baseline. A good baseline for most people would be $3.00 a gallon, a price most people were paying just a few months ago. An even better baseline would be $4.00 a gallon. You can choose an amount which works best for you knowing the higher the amount, the better it will be for building your emergency fund. Whatever amount you choose for your baseline, that’s the amount that you will pay every time you put gas into your car.

Step Two: Whenever you go to fill up your car, be sure to note the number of gallons of gas you put into it. Also note the price you pay per gallon (or keep your receipt). The key for this challenge is to always try to buy the least expensive gas you can find in your area, because the lower the price you pay at the pump, the more money that will go toward your cheap gas challenge fund.

Step Three: Subtract the price that you paid at the gas station from your determined gas baseline, then multiply it by the number of gallons you put into your car each week. For example, if you have a baseline of $3.00 per gallon, and you paid $2.23 per gallon when you filled up your car, and it took 15 gallons of gas to fill up your car, the deposit you would make for the first week would be $11.55 ($3.00 – $2.23 = $0.77 x 15 = $11.55). All things staying the same, that would be over $600 put into your challenge account during the year. If your baseline was $4.00 a gallon, your challenge deposit would be $26.55, and all things staying the same, a deposit of over $1,380 at the end of the year. By simply keeping track of the number of gallons you put into your car each week and the price you paid for gas, you will have an easy way to put aside money each and every week of the year.

You can use this printable worksheet for your challenge (click on image to print pdf):

The actual amount of money you save will depend a lot on gas prices throughout the year. If gas prices continue to fall, you will save more money than if gas prices begin to rise again. An added benefit of this challenge is the amount you budget for gas will be constant and not fluctuate during the year. When gas prices rise from their current level toward $3.00 a gallon again, you won’t find yourself in a situation where it’s a squeeze on your budget. You’ve already allocated the amount for every time you fill up the car. We all know gas prices will eventually go up again. This makes the cheap gas challenge a great way to take advantage of the lower prices we’re all currently enjoying, while also realizing these prices aren’t going to stay this low forever.

(Photo courtesy of Zepfanman)