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 of a Countdown Fund:

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?