Among the different ways to trick yourself into saving, money-saving challenges are some of the most engaging.
They can help you feel connected to finances by requiring frequent check-ins and debunking feelings of inadequacy when it comes to saving. For Cristina Brown, a self-described savings-challenge designer and founder of the blog Happy Savings Co, money-saving challenges helped her go from spending to saving.
“I recognized the need to save money, and I thought that this would be a good way to kind of gamify it,” Brown says.
If saving for tomorrow seems out of reach, the right money challenge can generate excitement, push competitive buttons and potentially increase savings.
Viral challenges that can add up
Before starting a savings challenge, review your budget to trim unnecessary expenses. The amount of breathing room in your budget will determine the level of difficulty that’s possible for a challenge.
Assigning a goal to a challenge may also keep you motivated and consistent, whether it be saving for an emergency fund, a vacation or something else.
A few popular challenges to consider include:
Keep the change challenges
Beginner-friendly $1 and $5 savings challenges allow for passive saving, which takes less effort and adopts an out-of-sight approach. For a designated amount of time, both challenges involve putting aside denominations of these bills that are left over from cash transactions.
Ezekiel Waisel, a certified financial planner at SHP Financial, a financial planning firm, tried the $5 challenge in 2016 and saved about $300 in a year for a round-trip flight. “I don’t use a lot of cash, so the fact that I even saved that much was pretty surprising to me,” he says.
The 52-week challenge
This challenge hikes up the savings by $1 weekly and requires you to actively save by budgeting for each week. In the first week you save $1, in the second week $2, and so on until the 52nd week. The challenge can also be reversed to start saving $52 in the first week and work downward, as is Brown’s preference in 2022. Either way, the challenge can save $1,378 in a year, enough to cover an emergency or a large purchase.
“At the end of the year with holidays — even with all of our best efforts of setting up sinking funds for the holidays and stuff like that — things can still get pretty tight, so I reversed the order to save the bigger amounts at the beginning of the year,” says Brown. A sinking fund holds money that’s earmarked for a specific goal or expense.</…….