A money pool is a simple way to build up savings with a group of people. You and your friends can pool in a contribution for a specified time period until you receive the total amount of money you need.
For instance, if you’re going on a holiday abroad and wish to collect sufficient funds for your trips, you’d have to divide the total balance by the number of members, and each one would need to contribute a fixed amount until you have enough money to book.
In this article, we share how you can make a money pool with your friends.
The idea of a money pool is simple: every individual contributes a fixed sum of money every month. When the month ends, one individual gets the total amount in the pool pot i.e., the payout. The process continues until each person has received their payout.
In a lot of money pools, every member contributes equally. This way, it’s easier to manage payouts and contributions. The amount can be as much as you like. However, generally, every member contributes between $50 and $500 every month.
You should have a clear idea of what you need the money for. For instance, if you need a large sum of money to buy a car or house, you might want to increase the size of the contributions. For daily savings, smaller contributions might be more appropriate.
Be careful that each group member is going to have a different financial position. Therefore, you should aim to create a balance between making significant savings and affordability.
Once you know how many friends are willing to participate in the money pool and the amount they will contribute every month, you can work out the monthly payout. For instance, $100 contribution x 5 members = $500 payout.
Each pool member is going to get this amount every month until all the members have received their share.
It’s an excellent idea if each friend pays their contribution on time each month. However, there are times when this might not be possible. Thus, when you make a money pool with friends, it’s important to ensure that the monthly pool amounts are manageable for everyone. Also, don’t name and shame someone if they aren’t able to contribute on time.
Money pools generally increase slowly in size. However, you can come up with creative ways to grow your money pool proactively! For instance, if you are all out for dinner and deciding if you want dessert, you can all put the money you would otherwise spend on that item into your money pool.
A money pool is an excellent way to save money and make your dream of going on a vacation or buying a house come to life. At iDreamers, we help you reach your dreams no matter how big or small they are! Download the iDreamers app from the Apple App Store or Google Play Store and start your journey of bringing your dreams to life.
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