A Viral Savings Challenge that Pays

Among the various ways to trick yourself into saving, the challenges of saving money are some of the most interesting.

They can help you feel connected to your finances by requiring frequent check-ins and eliminating feelings of inadequacy when it comes to saving. For Cristina Brown, a savings challenge designer and founder of the Happy Savings Co blog, the challenge of saving money helped her transition from spending to saving.

“I realized the need to save money, and I thought this would be a good way to make the game,” said Brown.

If saving for tomorrow seems out of reach, the right money challenge can generate excitement, push the competitive button and potentially increase savings.

Viral challenges that can add up

Before starting a savings challenge, review your budget to cut unnecessary expenses. The amount of breathing room in your budget will determine the possible difficulty level for a challenge.

Setting goals for a challenge can also keep you motivated and consistent, whether that’s saving for an emergency fund, vacation, or something else.

Some popular challenges to consider include:

Keep up the challenge of change

The beginner-friendly $1 and $5 savings challenges allow for passive savings, requiring less effort and adopting an invisible approach. For a set period of time, both challenges involve removing the remaining cash from cash transactions.

Ezekiel Waisel, a certified financial planner at SHP Financial, a financial planning firm, attempted the $5 challenge in 2016 and saved about $300 a year on round-trip flights. “I don’t use a lot of cash, so the fact that I even saved that much was quite a shock to me,” he said.

52 week challenge

This challenge increases savings by $1 per week and requires you to actively save by creating a budget for each week. In the first week you save $1, in the second week $2, and so on until week 52. The challenge can also be reversed to start saving $52 in the first week and work your way down, as Brown prefers in 2022. Either way, the challenge could save $1,378 in a year, enough to cover an emergency or major purchase.

“At the end of a year with holidays — even with all our best efforts to set up an allowance for holidays and stuff like that — things can still get pretty tight, so I reversed the order to save the bigger amount up front. this year,” said Brown. Settlement funds hold money that is allocated for a specific purpose or expense.

100 envelope challenge

This potentially lucrative and difficult money-saving challenge requires numbering 100 envelopes from one to 100, shuffling them and drawing one at random each day. The number on the drawn envelope determines the amount of cash to be deposited. Drawing high numbers consecutively can prove difficult, so this challenge is ideal for those with more cash flow. When done, this saves you up to $5,050, but don’t keep the money in the envelope for too long. Stay safe by setting a day each week or month to deposit your savings into a high-interest bank account.

Wednesday weather challenge

For thrill seekers with ample cash flow, this challenge can offer huge savings with little predictability. On every Wednesday, for the year, save cash or deposit it into a savings account based on the temperature in your city. If the temperature is 50 degrees, for example, save $50. The challenge gets harder as it gets warmer, so it’s best to start in winter when it’s more manageable.

Challenge without spending

It’s as simple as it sounds: you commit to spending only on the essentials during a certain period to save big. Some people even clean their kitchens to lower their grocery bill. The degree of difficulty is subjective for this challenge, but is likely to be more sustainable in the short term.

Customize your own challenge

Modify popular challenges to suit your needs by shortening or extending deadlines or saving rhythms. For example, you could extend the 100 envelope challenge for 100 weeks (about 2 years) instead of days, if that’s more achievable. Brown also created his own challenges. In one such challenge, he looked for discounts at the grocery store to save some for future purposes. He says he saves a total of $3,560.58 in 2021 by juggling multiple challenges each month.

Learn what motivates you

Mastering the savings challenge involves understanding your motivations. Consider whether you are motivated by large or small savings, randomness or predictability, cash or electronic deposits, or active versus passive savings. If you’re not sure, try some money-saving challenges to learn what works. Passive savings challenges such as saving change can lay a solid foundation for greater challenges and savings.

“I think passive is a great starting point, and once you’re comfortable and consistent with passive saving, you can add or switch to an active saving model,” says Waisel.

Finding the right challenge may take trial and error, but even as you experiment, you may end up saving money in the process.

This article was written by NerdWallet and originally published by The Associated Press.