Take Advantage of the 13th Month

The 13th Month Savings Trick is a simple way to build that six-month reserve. In fact, it will boost your annual savings by 8%!

Here’s how it works:

• Set an annual savings goal. Let’s use $6,000 as an example.
• Divide that number by 12. That breaks your annual savings goal into a monthly goal. $6,000 divided by 12 is $500 per month.
• Now divide your monthly savings goal by 4. $500 divided by 4 = $125.
• Work with your bank to set up an automatic debit in that amount, moving funds from your checking to your savings account each week. This smaller amount is less noticeable and, therefore, more doable than a monthly debit.

At the end of the year, you’ll discover something fantastic — you got an 8% bonus over the amount you would’ve saved if you set the money aside monthly. Why? Because there are 52 weeks in a year, not 48.

So, in our example, saving $125 a week weeks yields $6,500 at the end of the year — 8% more than your goal!

The final hint? Setting up an auto-debit on a weekly basis means you don’t have to worry about remembering to transfer the money. At the end of the year, you can celebrate achieving your savings goal!