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, money-saving challenges helped her to transition from spending to saving.
“I recognised the need to save money and I thought that this would be a good way to kind of gamify it,” Ms 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 holiday, a wedding or something else.
A few popular challenges to consider include:
1. 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.
financial planner at SHP Financial
Ezekiel Waisel, a certified financial planner at SHP Financial, 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.
2. The 52-week challenge
This challenge ramps 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 downwards, as is Ms 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 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 Ms Brown.
A sinking fund holds money that is earmarked for a specific goal or expense.
3. The 100 envelope challenge
This potentially lucrative and difficult money-saving challenge requires numbering 100 envelopes from one to 100, shuffling them and drawing one randomly every day.
The number on the envelope drawn determines the amount of cash that must be saved. Drawing high numbers consecutively can prove difficult, so this challenge is ideal for those with more cash flow.
If completed, it saves up to $5,050, but don’t hold money in envelopes too long. Keep it safe by designating a day every other week or monthly to deposit savings into a high-interest bank account.
4. The weather Wednesday challenge
For thrill-seekers with enough cash flow, this challenge can offer big savings with less predictability.
On every Wednesday, for a year, save cash or make a deposit into a savings account based on the temperature in your city. If it’s 30° Celsius, for instance, save $30.
The challenge gets harder as it gets warmer, so it’s best to start in the winter when it’s more manageable.
5. No spend challenge
It’s as straightforward as it sounds: You commit to only spend on essentials over a certain period to save big.
Some people even clean out their pantries to lower their grocery bills. The level of difficulty is subjective for this challenge, but it’s probably more sustainable over a short term rather than a year, which some people also commit to doing.
6. Customise your own challenge
Modify a popular challenge to fit your needs by shortening or extending deadlines or the cadence of saving.
For instance, you could stretch the 100 envelope challenge over 100 weeks — about two years — instead of days, if that’s more achievable.
Ms Brown also creates her own challenges. In one such challenge, she seeks discounts at the grocery store to stash savings for future goals. She saved a total of $3,560.58 in 2021 by juggling multiple challenges each month, she says.
Learn what motivates you
Mastering a savings challenge involves understanding your motivations. Consider whether you’re motivated by big or small deposits, randomness or predictability, cash or electronic deposits, or active versus passive saving.
If you’re unsure, try a few money-saving challenges to learn what works for you. Passive savings challenges such as keep the change can lay a solid foundation for bigger challenges and savings.
“I think passive is a great starting point and once you get comfortable and consistent with passive saving, you can then add or switch to an active savings model,” Mr Waisel says.
Finding the right challenge may require trial and error, but even as you experiment you’re likely to save money in the process.
