It’s a new year (and a new decade!), and calendar changes are a great time to work on your finances. Setting aside money for an emergency can be a daunting task, but if you take small steps now, the pay off long term can be fantastic! At Astra, our goal is to help automate your finances, and our goal for 2020 is to help all of our users establish an emergency fund – $500 stashed away for when you need it most and funded without drastic changes to behavior. With that in mind, we are happy to announce the addition of our 52 Week Savings plan Routine, offered to all current and new users, as always completely free.
The idea is simple – you start by saving $1 at the end of week 1, $2 at the end of week 2, and so on until the end of the year, and by then you will have amassed $1,378! Best of all is that the process is entirely automated – pick the incremental amount that you want to save weekly, and our automation Routine will do the rest. Each week you will receive a notification about your upcoming scheduled transfer (issued the night before) so that you can see how much money is moving into your savings account and offer the opportunity to pause or cancel the transaction if you so choose. No spreadsheets or calendar reminders – just a few clicks, and you are off!
Let’s look at how impactful $1,378 could be to your overall finances:
• If you used $1,378 to pay down a credit card balance, assuming the national average of 15.09%1 APR you would save $200 in interest charges.
• If you put the total amount of $1,378 into a high yield savings account (1.95%)2 and left it there for 5 years, you would earn $135 in interest.
• If you used that savings as an emergency fund and lent yourself $375 one time, instead of using a payday lender for an unanticipated expense, you could save yourself an estimated $5203 in loan fees.
An extra $1,378 stashed away in an emergency fund, earning interest, could have a meaningful impact on your financial health.
Starting is the easiest part. Just set aside your first savings amount – as little as one dollar. The hard part is remembering to set aside EVERY week for the year and saving the correct amount to take advantage of the exponential nature of the challenge. Oh, and there’s that tricky part about making sure your checking account balance has enough money to accommodate the weekly savings. Let’s look at three tools to get through all 52 weeks – from more manual to fully automatic:
Option 1: Use Your Calendar
The 52-week challenge is defined by time, so what better tool to use than your calendar? This approach is all about the reminder to set aside your funds weekly. If you prefer a physical calendar, mark the 52 days in the year that you want to be reminded to save. If you use an app like Google Calendar, you can create a weekly recurring event so that you are notified with the saving reminder. To stay on track and encourage the habit, we recommend doing your saving on the same day every week.
Pro tip: Add Week Numbers to your Google Calendar to easily keep track of which week is this week in the sequence.
Option 2: Use a Routine Calculator or Spreadsheet
Knowing how much to save each week is the other half of the battle. If you are starting right on the first week of the year and using the standard increment of increasing $1 each week, this may not seem like a big deal. Starting on Wednesday, January 22nd and want to increment by $2 or $5 instead? The math can make the process less than fun. To make this easy, use a tool! And it’s even better in combination with Option 1!! Here are a few good options to try:
Pro tip: Seeing the final amount saved can be motivating (so we made a Sheet that dynamically calculates the amount for you)
Option 3: Automate it all
If you are successful in building the savings habit through the challenge, great! But life happens and making sure you actually put the savings somewhere can be time-consuming. Enter automation.
Using an app to coordinate your savings gives you the best of all worlds – habit forming, setting your cash aside, and time savings to boot. You get to sit back, relax, and watch your savings grow. The Astra app just so happens to have the 52-week challenge as a built-in Routine.
How does this differ from other applications which offer similar functions?
Great question: two-part answer:
1. We use the financial accounts you already have – you already have a checking account and a savings account – use them instead of setting up a new one!
2. Flexibility – Want to save $5 X week number per week? No problem. Only save $1 per week – done. Savings on your terms.
The 52-week challenge at its core is about the power of compound growth. You start small, saving $1 the first week, $2 the second week, etc. which are small amounts for sure, but you can quickly see how things scale. Every week the amount that you save will increase by the interval amount you select. If you keep up with the 52-week challenge for the whole year, you would put away $1,378. Even more impressive is that you would save $250 of that in just the last month of the year!
How do I set up the 52 Week Savings Challenge with Astra?
Getting started with your automated 52-week savings challenge with Astra is fast and won’t cost you a thing.
• First, locate the Astra app in the google play or Apple app store and download it.
• Next, you will need to set up an Astra account and link whichever banks you would like to use for the Routine to your Astra profile. (For instance, if you want to pull funds from your Chase checking account and have them deposited in your Marcus savings account, you would use your credentials with those institutions to link them to your Astra profile).
• In the Astra app, you will now see all of the connected accounts that you have on your profile, as well as the current balances on those accounts. Navigate to the Routines page and select the “+” to set up a new Routine.
• Of the Routine types available, you will want to choose the 52 Week Savings Challenge option, which will then prompt you to select a “Source” account, which is where the funds will come from, a “Destination” account where the funds are deposited, and an internal amount. If you want to save $1 week 1, $2 week 2, and so on, you would select “$1” for your interval amount. If you wanted to save $3 week 1, $6 week, and so on, you would select “$3” for your interval amount.
• With all of those selections made, you can now preview the schedule of transfers by selecting the “preview” button at the bottom of the Routine setup screen. If you are happy with your selections, hit the “Create Routine,” and you are all set to save! Before each weekly transfer, you will get a notification about the transfer and the amount of the transfer, which allows you to cancel the transfer before it occurs.
We hope that you can join us in our efforts to help people establish an emergency fund in 2020 using the 52-week challenge, or any of our other intelligent savings routines. Here is to a happy and healthy new year for all from your friends at Astra!