Will this savings plan work??

Question

Check my math.
I'm trying to find ways to save money. I think by doing this, I can actually put money into my savings account without doing too much work. It's very hard for me to put money into my savings account each week by myself. If I do direct deposit, that should make it easier on me. My theory is as follows....my mortgage payment is $555/mo, if I direct deposit $150/wk into my savings account, every 4 weeks I deposit $600. At the end of the month, when the mortgage is due, I transfer the $555 to the mortgage account. I checked, the bank will let me do that without penalty. Which would leave a total $1140 ($150/wk X 52 wks - $555/mo x 12mo) in my savings account per year, plus interest.

Does this sound right? Or, can you see a flaw that I don't?

Answer 1

No flaws! Your math is correct and you are to be commended for your efforts. You won't miss the $150 per week if you don't see it on your paycheck. You'll learn to adjust. Having the mortgage taken out is a good plan, too. You'll have an extra $45 per month, plus an extra $150 on top of that when there are five pay days: $1140 plus interest.

Great job! I hope it all works out. Good luck!

Answer 2

Sounds like it works, and you won't really miss the $150 a week since most of that now goes to the mortgage payment. You'll have the extra $45 a month in savings, plus since you put money in for 52 weeks, which is 13 4-week periods, but only pay the mortgage 12 times a year, that's where the extra $555 comes from.

Good luck.

Answer 3

They might let you do it, but how will it be applied to your account? Did the bank know your intnetions? I make payments to principle through out the month, but still am obligated to make the regular payment.

Just stick to making your deposit and then withdrawing monthly and saving that way. Its easier and you wont get bit.