Money expert Clark Howard is challenging you to save $10 a week until you have $500 in the bank.
The reality is that a lot of people can’t handle a $500 emergency expense like a medical bill or a car repair, so they end up going into credit card debt as a result.
How to Save $500 Starting With $10 a Week
That’s why Clark introduced this savings challenge on his radio show:
“What I’d like you to think about is saving $10 a week until you get to $500,” Clark says. “For most of us, there are little things we can do with the spending we have now that can get us those $10.”
Listen below: Clark introduces the $500 savings challenge
Saving three to six months of expenses is a great long-term goal, but it’s not practical if you’re living paycheck to paycheck. Start with $500 and you can go from there.
Follow the three steps below to get started with Clark’s $500 challenge…
1. Create a Budget
Creating a monthly budget will help you see where your money is going. Using the CLARK Method and our free budget worksheet, you can easily identify areas where you may be able to cut costs.
If you prefer to use an app, see this roundup of the best free and low-cost budgeting tools that have been tested by Team Clark.
2. Reduce Expenses and/or Increase Income
Once you’ve put together a budget, you have to decide how you’ll come up with that $10 a week. You can either reduce expenses, increase your income or a do a combination of both.
My suggestion is to start with what’s easiest for your life and go from there. Here are a few options:
|Reduce Expenses||Increase Income|
3. Put Your Money in the Bank
After you start reducing your expenses and/or increasing your income, hopefully you’ll have at least $10 a week to save. One good place to store the cash is in a high-interest savings account from an online bank.
Then, just transfer money from your checking account to your savings account every week until you reach $500.
Once you’ve successfully completed the $500 challenge, keep going! Follow the same process that we’ve outlined in this article to build a larger emergency fund over time.