MADISON, Wis. (4/9/14)--A savings competition coordinated by a Wisconsin-based credit union was pegged this week by an ABC News consumer correspondent as a great example of how consumers can achieve their savings goals.
Summit CU, Madison, Wis., with $1.96 billion in assets, for several years has been running "Project Money," a competition that pushes members to find out how much they can pare down debt and pump up savings.
A financial coach at Summit encouraged a couple participating in the seven-month competition to separate out their individual savings goals, rather than lumping them all together, to reach their desired levels of savings, and the author of the April 8 ABC News piece found the idea quite familiar.
"When I was a kid, my parents both carried wallets that had multiple compartments," said Elisabeth Leamy, ABC News' consumer correspondent. "The cash in each compartment was for a different expense ... The idea was to budget a maximum amount for each category and never borrow from one category to pay for another. This simple, methodical strategy helped them become the financially sound people they are today."
Summit's financial coach suggested a similar strategy to the couple, to drop money into different "buckets" and keep each individual savings goals separate, and the plan paid off.
By opening up 10 different savings accounts--which they managed on the credit union's website, slipping set amounts of cash into the different "buckets"--the couple tamped down their debts by nearly $30,000 and inflated their savings by $14,400.
"In the past, our biggest challenge wasn't developing a budget, it was sticking to it," Stacey Steinmetz, one of the participants, told ABC News, adding, "No going back to the old ways of making a budget and falling off the horse."
Leamy, a 20-year consumer advocate for ABC, added that credit unions often provide a variety of free financial coaching and included a link to aSmarterChoice.org to help consumers find a credit union to join.