We all know we should save more of our money to prepare for coming events, so learning how to make a savings plan is essential. That said, a weekly or bi-weekly savings plan can help you reach goals.
Saving on a monthly basis is great, but maybe you need to adjust your thinking about setting money aside. Could you jumpstart your savings by setting aside cash more frequently?
A weekly savings plan or bi-weekly savings plan (saving every two weeks) helps you break down your goals. It may help you keep your financial plans at the top of your mind.
So here are several tips for how to create a savings plan; either a weekly or bi-weekly savings plan, to help you succeed!
How a savings plan can benefit you
Even though many savings guidelines indicate that you should set aside a fixed amount each month, that’s not the only timeline that works.
A weekly savings plan may be more beneficial and help you to reach your goals more efficiently. Or perhaps a bi-weekly savings plan (twice a month) is more up your alley.
For some people, a monthly savings plan is fine, but here are some ways that weekly or biweekly plans may work best.
Shorter time frames help you save
Let’s talk about how a weekly or bi-weekly savings plan differs from yearly or other frequencies.
When you have a plan to just “save 20% of your income annually,” that’s a great goal. However, it feels too big to tackle from that angle.
A weekly or bi-weekly savings plan enables you to focus on mid-term or short-term goals. You may need to save for an event that’s six months down the line or several years. You can do this by saving money in smaller amounts.
For example, let’s say your plan is to save $6,000 this year. Could you instead break that total down into weekly or biweekly increments? $6,000 would mean saving $500 monthly, but you could make that even smaller.
On a bi-weekly savings plan, you could save $230.77 every two weeks. If you took it to a weekly savings plan, you’d need to save $115.38 every week.
It makes your goals more manageable
One of the reasons some savers prefer a more frequent savings plan is to break down their goals into smaller pieces.
When you're wondering how to create a savings plan, the task may seem too big and difficult. But when you consider the goal in terms of baby steps, it makes everything seem more manageable.
Even when you’re technically saving the exact same dollar amount, breaking down your savings plan this way might be a motivating tool.
A weekly savings plan ensures you avoid lifestyle creep
Another reason to think about saving on a weekly or biweekly basis is this: you may increase your spending as you earn more.
That’s called lifestyle creep or lifestyle inflation. When you automatically spend every raise or windfall you receive, you miss out on major benefits.
Even though there’s nothing wrong with spending your money on things you enjoy, lifestyle creep makes it tough to get ahead.
Your bi-weekly savings plan, or weekly savings plan, keeps you focused on your end goals. Strive to not only increase your income but also to use those raises effectively. Upping your savings rate is one great way to allocate additional income.
How to create a successful weekly savings plan or bi-weekly savings plan
A recent study by Northwestern Mutual stated that the average American’s personal savings dropped by 15%. Based on their polls, personal savings declined from $73,000 to $62,000.
Basically, making a weekly savings plan (or bi-weekly savings plan) can assist you in the way you think about saving. There are benefits to saving automatically every week or every two weeks.
Whether you’re looking to add to your overall savings or you have specific goals, you won’t regret learning how to make a savings plan. Here's how to get started.
1. Determine your savings goals
The first step when wondering how to create a savings plan is to determine your savings goals. After all, it can be really tough to forgo that vacation or handbag (or whatever your luxury items are) without strong reasons to do so.
Often, I think people run into problems with saving or investing money because they are unsure why they should do it. So they spend their entire paycheck and bemoan the fact they just can’t make certain choices down the line.
Some people might criticize you for following an aggressive savings plan. But the key here is that whatever your savings goals are, no matter how large or small, you need a solid Why to hold your motivation.
What are you saving for?
Ask yourself this crucial question when making a bi-weekly savings plan: What am I saving for? For some of us, this may seem super-obvious. But most of us need to think about it—in part because we have multiple savings goals at once.
Take some time to think about all of the reasons you might want or need to save money. (This can also refer to investments, although saving and investing have different meanings. Both are essential, but for this article we'll focus on saving.)
Write down all of the future spending you’ll need to do. This might include anything from your family vacation next summer to your child’s college education to a future vehicle. You could want to save enough to quit your job and spend a year launching a small business.
It’s definitely possible that you’d pick more than one of these savings goals to focus on. You might choose to create multiple savings buckets for different purposes, some of them as sinking funds and others as retirement income.
And remember, your income may not support saving as much as you’d like in each of these accounts.
Don’t get discouraged if you can’t squeeze enough from your budget right now to save for every single thing. The important thing is to start somewhere.
Estimate how much you need to save
How your budget breaks down will depend on a lot of factors, of course. Your next step in building a weekly savings plan is to estimate an endpoint. What’s the total dollar amount you anticipate needing to reach this particular savings goal?
Don’t fret about how long it’ll take to save this money right now. Just focus on coming up with a solid total estimate for how much to save.
Get a ballpark idea of how much things will cost.
For example, hoping to pay cash for your next vehicle? Look up the going rates for vehicles you like in your area. Get an idea of whether you’ll need $8,000 or $15,000 or more, and that can guide your savings goal.
These numbers won’t be exact, as they’re subject to changes in the economy and other factors. But they provide a rough plan, which you’ll need when deciding how much to save weekly or biweekly.
2. Figure out a timeline for saving
Next up, after arriving at a total dollar amount, you can decide the timeline. What’s the end game? If you have a set day by which you need to have the total amount saved, go with that.
You might also have to shift your timeline based on how much you are able to save each week.
Determine different endpoints for different goals
When you’re deciding how to make a savings plan, you’ll probably have at least a couple of different things to save for.
As you look back at your list of all your savings goals, note your expected timeline. You may need some amounts within a few months, others in a year or two, and others could be forty years away.
Knowing how much you need in each savings account leads to setting a deadline for each one. And remember, most of these figures aren’t carved in stone, so you’ll want to be flexible.
Give yourself some grace if you don’t have exactly the dollar amount you planned by the perfect date in the future.
Break down savings into weekly or biweekly amounts
Since you’re working on a weekly savings plan or bi-weekly savings plan, the next step is to do that math. Take your total amount and divide it by the length of time you’re allotting to that savings goal.
Say you’re aiming to save $10,000 within 24 months for an epic vacation with extended family. In a bi-weekly savings plan, you would divide the $10,000 by either 48 or 52. (This depends on whether you focus on a literal bi-weekly plan or a twice-per-month plan.)
You might use the number 52 if you actually get paid biweekly and not just twice a month. That works out to $192.30 every two weeks. If using 48 because your employer pays twice monthly, the number is slightly different: $208.33 per pay period for two years.
However, if you want a weekly savings plan, you need to save $96.15 every week for 24 months in order to reach your goal.
Now repeat this process with each one of your goals. It really can be eye-opening, because you may discover your savings goals are more reachable than you ever thought.
Base your savings schedule on your payment schedule
For any weekly or bi-weekly savings plans, you can build your savings based on how often you get paid. Even if you get paid monthly, you can still elect to save weekly or biweekly.
If you already are paid on a biweekly basis, that can be a very easy way to divide up your savings. Receiving salary via direct deposit can simplify the process—just set up an automatic amount from each paycheck to be deposited into savings.
Similarly, being paid weekly for your job may mean you can easily set up weekly savings plans. Direct deposit is a great way to do so, but you can also adjust amounts if need be.
3. Design your budget for weekly or bi-weekly savings plans
Your next step in creating an effective weekly savings plan or bi-weekly savings plan: iron out your budget. This involves noting which goals are most important to save for now, finding a savings account, and automating your savings.
Prioritize savings goals
Whatever your savings goals, decide which one(s) take precedence. If you’re able to save in multiple “buckets” simultaneously, that’s great.
Perhaps you’ll save $200 per month in your top priority savings account, $100 in another, and smaller amounts in others.
But many of us can’t easily divide up savings, especially if our income is limited. You can then pick which savings goal to focus on first. After reaching one saving milestone, you can shift focus to #2 on the list, and so on.
By determining your top financial priorities, you can decide how your income should be allocated. Also, you can feel good about your savings decisions, knowing that your weekly and bi-weekly savings plans are logical.
Find the best savings accounts
As far as where to stash your cash, you can look for a high-yield savings account. That’s a vehicle that pays a half-decent APY on your deposits, but you can access the money anytime.
High yield savings accounts don’t earn you huge returns, but that’s part of what you lose in exchange for liquidity. Your savings need to be liquid—easily accessible for you in cash form.
An interest-bearing checking account is another way to go or a no-penalty CD. An FDIC-insured financial institution is best for protecting your funds.
Each of these savings vehicles, or liquid investments, can enable you to reach your savings goals faster. Rather than hiding your money under the mattress, your money can earn you more money.
Search online for reviews of the top interest-bearing savings or checking accounts you might use. Then you can set up deposits to get you on your way to reaching savings goals.
Automate your savings
After determining your budget and opening an account, the best way to ensure success in weekly savings plans is automation. Make your savings automatic, whether it’s weekly or part of bi-weekly savings plans.
By automating your savings, you’re taking the decision about saving out of your hands. You only have to make the choice to save once, set up automatic deposits, and let your money grow.
Many of us struggle if we think about how to make a savings plan too much. You might see things you want to buy, and you'll buy if the money is available in checking or via credit. But by immediately funneling money into savings, you can remove that temptation.
Make a weekly or bi-weekly savings plan to reach your goals!
A weekly savings plan is a great way to jumpstart your progress toward financial goals. Bi-weekly savings plans are solid options as well.
Whatever you’re saving for, estimate how much you’ll need and automate savings in an account that pays interest. This will help your money to compound, giving you greater buying power in the future!