The Countdown Fund: Savings with a Purpose
Many of us are guilty of saving money for a rainy day or stocking money away without a purpose. While it is good to have money in case of emergencies, it is even better to have a plan when it comes to saving money. Do you want to get a newer, more reliable car? Do you want to save money to replace your tube TV made in 1991? Maybe you want to take your spouse on a trip to Hawaii? Here is the best way to make that happen:
The Countdown Fund
Much like the countdown on New Years Eve, you can have a goal in mind and create a savings fund that you countdown to. Here is how it works:
Step 1
Create an envelope with the name of what you are “Counting down” to.
Step 2
Write the total amount on the envelope that you need.
Step 3
Determine the timeframe you need the money by.
Step 4
Determine where the money is going to come from out of your Financial Gameplan aka your budget.
Step 5
Put that amount of money aside every month and countdown until the goal is fully funded.
Here is an example:
Goal: Go to Hawaii
Cost: $2000
Monthly Amount available: $200
Months until Fully Funded: 10 Months
So if there was your scenario, you would create an envelope called “Hawaii Countdown Fund,” write the total of $2000 on it, and every month put $200 in it every month. In only 10 months you would have enough for you and your spouse to go to Hawaii. There is no need to borrow money or put the trip on credit cards if you plan in advance for it.
Where do I get $200 a month to do this?
Here are two ways to make this a reality:
1. Increase your income – 10 Ways to Earn Extra Cash
2. Decrease your expenses – 10 Ways to Trim Your Budget
What could you use a Countdown Fund for?
8 Responses to “The Countdown Fund: Savings with a Purpose”
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That’s a great idea Deacon for people who feel comfortable leaving that kind of money in the home ( well if it was a big ticket item they were saving for). I actually just did a post on places people hide money in their home lol. We simply set aside money in our budget for projected expenses and each month this money goes into a separate bank account. When the bill or expense comes due the money will be there.
I also think it’s a great idea for those that have a hard time keeping money in the bank or may spend it. If you simply put it aside and forget it, then it should be there when you need it. Great Tips mate! Mr.CBB
Thanks! I think if someone wanted to create a separate bank account for the Countdown Fund as well, that is fine. The challenge is making sure that the money is not touched and that it is earmarked for just that particular goal. I appreciate your feedback!
Exactly, some people struggle to keep the money in the bank when they see it. I posted it on my Facebook page and others use an envelope as well as that helps them save. Cheers!
I think that is a great idea as well. As we have become more financially responsible, we are able to simply earmark the money in our budget and keep it in our bank account. However, I realize that many people do not have that level of discipline – which makes this idea very accessible. Either way, the key is having enough self-control to seperate the moeny either physically or mentally from the rest of your money. Then, don’t dip into it!
Great post as always my friend!