This was originally published on Monday, January 2, 2017, in the Pacific Daily News. Click here to subscribe to the PDN.
Through the years I have stressed how important it is to have some sort of savings account. If you are still searching for a New Year’s resolution, think about starting a savings account or adding to the one you already have. There are several ways you can make savings easier and less imposing.
Here are a few to consider:
- 52-Week Challenge. This is a popular challenge because it requires you to put some money aside weekly and, depending how much you put in, by the end of the year you can have a sizable amount set aside. On the first week of the year, put a dollar aside. Week two, put $2 aside. Week three, put $3 aside and so on, until the final week of the year you will add $52. By the end of the year you will have saved $1,378. If $10 in the first month doesn’t motivate you enough, try starting with $52 the first week, $51 the second week, and keep adding less each week. In the first month you would save $202, and you can open a savings account with that money and start earning interest for the rest of the year. It is also a good idea to save more at the beginning of the year so that you have enough money to spend on the holidays. Pick an amount, any amount. Choose any amount you want to save for the week, from $1 to $52. As you save each amount, scratch it off the list. This way gives you more flexibility and you are more likely to stick to the challenge.
- Bi-Weekly Challenge. If you get paid every other week, this may be easier to save money. Just add the denomination of the two weeks together. For example week one plus week two will equal to $3. Next pay period add week three plus week four for $7. By the end of the year you will have saved the same amount as the weekly challenge.
- Double the Challenge. Double the amount saved every week. Week 1 save $2, Week 2 save $4 — by the end of the year you will have saved $2,756.
- Five times the challenge. If you are really ambitious, try multiplying the corresponding week by five. Week one save $5, week 2 save $10, week 3 save $15 and so on. By the end of the year you will have saved $6,890.
- The “No Spend” Challenge. This challenge really forces you to be conscious of where your money is spent. For a month, spend money only on necessities such as rent, fuel and groceries. Don’t spend money to eat out (even for lunch), coffee, movies or even a pack of gum. At the end of the month you will be surprised just how much money you save.
- Spare Change Challenge. How many times have you gone to the store and received coins? Many of us at the end of the day place it in a jar and forget about it. This challenge includes not only the coins but dollar bills as well. At the end of every day, place your coins and dollar bills into a jar. At the end of the month, take the jar to your bank and deposit it into your savings account. Get the whole family involved to really make an impact.
- Declutter Savings Challenge. The holidays have passed and we probably are playing with our new toys or gadgets while the old ones sit around the house gathering dust. The new year is a perfect time to declutter your home. Go room-to-room, including the kitchen, and look for items that you haven’t used in the last six months. The kids’ rooms are a gold mine of shoes, clothes, toy, and books that they have outgrown. Once you have all the items gathered, sell them at a yard sale. I heard the new Dededo flea market takes one-time vendors. Take the money you make from the sale and put it in your savings account. Do this every six months.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at firstname.lastname@example.org and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.