This is a fun and simple way to challenge yourself to save money, and with the way I do it, you can accomplish this without even knowing it’s happening. Here is how I do it.
You may have read my previous post about how we “bucket” money in our household and we do it automatically. We do this through Capital One 360, although there are plenty of other banks where you can setup the same thing. We take a set amount of money on a regular set frequency and setup an automatic withdrawal from our primary checking account to a savings account at Capital One 360.
Here is my challenge to you. Setup one of these account and setup one new savings account and call it “My $20 Challenge“. Setup the connection between your primary checking account where you paycheck goes and this new savings account. Then setup an automatic withdrawal of $20 to occur every Friday (Before the weekend happens!). Set it and forget it.
You will be amazed that over time as you forget you even did this, the money will just build automatically in an interest bearing savings account. In a years time, when you return to this account you will have over $1000 saved. How simple is that!?!
If you wanted to ever build an emergency fund, this is a really simple way to do it.
Here is where things get really fun. Let’s say you set up this $20 withdrawal when you turned 18 and completely forgot about it until you were ready for retirement at 65. You would have gathered $117,391 if invested in a mutual fund earning on average of 8%. You could earn much more as I earned 22% last year on my mutual funds.
The power of saving money can really pay dividends if you are patient. Go take the $20 challenge today!