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Which of These 3 Money Saving Challenges is Right for You?Stick to a money saving challenge for a whole year and be amazed at how much you can save up!by SmartParenting Staff .
Photo from dailyregister.net
One of your New Year’s Resolutions might be to save more money this year, because everyone could use a little more padding in their bank account, right? Let’s face the facts though; it’s easier (and way more fun) to spend than to save. However, let’s not forget that it’s even more difficult to earn money which, in turn, makes saving money an even more important task.
To help you with this, we’ve listed 3 money saving schemes you can start at the beginning of the year. Pick one that you’re most comfortable with and stick to it!
1. Daily Fixed Savings Challenge
This is the simplest and easiest scheme on this list. It only requires that you drop a fixed specified amount of money into a jar (or any savings container or bank account of your choice) everyday. Let’s say you pick P50 as your fixed amount. The year 2016 has 366 calendar days. As long as you don’t miss “paying yourself” (a.k.a. saving) everyday, by December 31 you would have saved up P18,300. Choose to commit to P100 a day and end up with P36,600 by the end of the year.
2. 52-Week Money Saving Challenge
Here’s a classic that you might already be familiar with. The original version of the 52-Week Money Saving scheme involves starting with $1 on week 1. You progress into the year by multiplying that $1 by the number of week you’re in. For Week 2 you’d be saving $2, Week 3 is $3 and for the last week, Week 52, you’ll be saving $52. Add all your weekly savings up and you get $1,378 by the end of it.
Let’s put that into a Filipino context. We’ll convert $1 into P50. That’s P50 on Week 1, P100 on Week 2, P150 on Week 3 and so on. By the time Week 30 rolls around you’ll be required to save an upwards of P1,500 a week. Add all your weekly saving up and you get P68,900 by the end of it.
If you want to see all the weeks and amounts to save tabulated, this spreadsheet by Kuripotpinay.com is very helpful. Plus, it even includes tables for other increments like P20 (P27,560 by year end) and P100 (P137, 800 by year end).
3. 12-Month Saving Challenge
A creation of Filipino personal finance coach and registered financial planner Alvin T. Tabañag, this scheme uses a formula based on your monthly earnings, making sure that your scheme is tailored to you. He shared his scheme on Rappler and says that it’s “a more practical, realistic, and sustainable alternative to building your savings.”
His saving challenge requires you to set aside an increasing amount per month depending on a formula that uses your monthly income and a chosen base amount as variables. The formula is:
Base Amount + (Month % X monthly income) = Savings for the month.
It only looks a bit complicated but it’s fairly simple. Let’s say your monthly income is P20k. Your chosen base amount is P0 (or zero Pesos).
“Month % refers to the applicable percentage corresponding to the month number. For January, the month % is equal to 1%, for February, it is 2%, for March, 3%, and so on,” wrote Tabañag.
So your formula for January would look like this 0 + (1% x P20k) equaling a P200 saving for January. By February the 1% in the formula prior would change to 2% and you would have to save P400. By the end of the year you would have saved P15,600. Here’s the whole year tabulated:ADVERTISEMENT - CONTINUE READING BELOW
Here’s what it would look like if your income was P50,000 a month and your base amount was P3,000. You would have saved up P75,000 by following this one.ADVERTISEMENT - CONTINUE READING BELOW
Images from Rappler.com
Which scheme would you follow? Tell us in the comments below!