Money Savings Challenges
We all understand the importance of saving money. Building up your savings gives you a financial cushion for when the unexpected happens. Saving money is also essential for reaching big financial goals like buying a home or car.
Of course, knowing you should be saving money doesn’t make doing it easy — especially if you’re living paycheck to paycheck.
If you’ve ever tried a weekly savings plan but failed to make saving money a habit, consider a money-saving challenge! Money-saving challenges are a creative approach to saving money that helps you set and work toward specific financial goals. They can also be fun!
Read on to learn how money-saving challenges work, the importance of saving money, and how to choose the right challenge for you.
How saving money works
Your savings is any income you set aside and don’t spend — at least not right away.
Saving money might involve allocating a certain percentage from each paycheck, stuffing envelopes with extra cash, or depositing any windfalls (such as a tax refund) into a dedicated savings account.
Why is saving money important?
Saving money is crucial for many reasons. Not only can it help you reach financial goals, but having a robust savings account increases your financial security.
What would you do if your washing machine malfunctioned? Or your HVAC system needed replacing? What if you had to buy a new transmission for your car?
Many households don’t have enough money in savings to cover these kinds of everyday emergencies. But, depending on your credit, you might be able to finance a large emergency purchase or repair. For example, getting an online loan for bad credit is an option you might consider. Still, you may have more peace of mind with a healthy savings account.
When should I start saving money?
Regardless of your short-term or long-term financial goals, the best time to start saving money is now. The sooner you start saving money, the more time you’ll have to build up your savings account.
Even if you haven’t yet been successful with saving money, it’s a good habit to develop at any age. The key is getting started. That’s where money-saving challenges come in.
Money-saving challenges to try
No matter where you are on your financial journey, implementing a money-saving challenge into your routine can be a fun, effective means of reaching monetary goals and building an emergency fund.
Here are a few challenges that can help you save money:
52-week savings challenge
The 52-week savings plan is a weekly money-saving challenge that’s easy to follow.
The first week, you’ll deposit $1 in savings. The second week, $2 . . . and so on, until you deposit $52 the last week of the challenge. By this point, you’ll have $1,378 saved!
Download our printable 52-week savings chart to help you keep track of the challenge.
Save $5,000 in one year
Another version of the 52-week savings challenge helps you focus on saving $5,000 in one year. Like with the regular 52-week challenge, you’ll set aside a certain amount of money each week until the end of the year. The difference is the amount.
During the first month, you’ll deposit $50 each week. The second month: $100 per week. The third month: $200 per week. The amounts start to fluctuate after that, ranging from $50 to $150 a week. Although you’ll definitely need to use our handy chart for this one, this weekly savings plan is a straightforward way of developing a savings habit.
3-month savings challenge
If committing to a year-long “save money challenge” seems daunting, try the 3-month savings challenge!
The great thing about the 3-month money-saving challenge is that you save the same amount ($84) each week for 12 weeks. That’s it! By the end of Week 12, you’ll have saved $1,008.
If you never seem to know where all your money has gone at the end of the month, consider doing a no-spend challenge. The no-spend challenge is exactly what it sounds like — you don’t spend any money on nonessentials. You still need to pay your bills and eat, of course, but you don’t need to dine out, buy new clothes, or splurge on entertainment during the challenge.
Since you pledge not to spend money during a pre-determined timeframe, the no-spend challenge can help you get a handle on impulse buying. This can help your savings efforts in the long run because you can better assess your spending habits and identify how much money you’ve spent on unnecessary expenses over the years.
Spare change challenge
Do you tend to pay for things in cash? If so, you probably end up with some spare change at the end of the day.
The spare change challenge is all about saving those pennies with intention. Whether you use a piggy bank, an automated coin bank, or a sophisticated change jar, the idea of this money-saving challenge is to collect all your spare change in one place.
No dining out challenge
Eating outside your own kitchen can easily lead to overspending. Whether you hit the coffeehouse drive-thru every morning, order food delivery for lunch, or grab takeout on your evening commute, you might be surprised to learn how much money goes to dining out.
For this money-saving challenge, avoid dine-in or takeout purchases for a full month.
Financial goals to save money for
Setting a financial goal to work toward is a great incentive for starting (and sticking to!) a money-saving challenge.
Here are some long-term financial goals that can help keep you motivated:
Buying a house
Qualifying for a mortgage tends to be easier if you come to the table with a hefty down payment. Many finance experts recommend offering 20% of a home’s purchase price as a down payment, which is no insignificant chunk of change.
For instance, 20% of a $320,000 home is $64,000. Even if you find a home priced for much less, you’d still need to save tens of thousands of dollars, which can take years of dedicated savings. Sticking with a money-saving challenge year after year can help you get there.
Buying a car
Coming up with an auto loan down payment may sound easier than saving for a home, but it still requires consistent savings habits.
Once again, finance experts recommend paying 20% of the purchase price upfront. For a $30,000 vehicle, that’s $6,000. When you think of it as only saving $500 a month for a full year — or $116 each week for 52 weeks — saving money for that car seems more manageable.
Saving for retirement is an important financial goal to ensure you have enough income to live on after leaving the workforce. While you may already have a retirement plan through work, such as a 401(k), it’s always a smart idea to supplement your retirement with additional savings.
Sending children to college
If you have kids or grandchildren, one of your financial goals might be to cover the costs of their education. Consider opening a 529 plan or Roth IRA for each individual child’s college fund.
How much you need to deposit in the college fund depends on the child’s age. The younger your kids are, the more time you have to save — and the easier it will be to budget for a monthly money-saving challenge.
Getting out of debt
Ask anyone what’s the first thing they’d do if they won the lottery and chances are they’ll say, “pay off debts.”
Getting out of debt is a crucial step for anyone working toward a major financial goal. That’s because the more debt you have, the more money goes toward paying bills and excess interest, which is money not going into your savings account.
Consolidating debt with an installment loan can help reduce your monthly bills and make it easier to budget until you’re out of debt.
What to do if you don’t have money saved up
Facing an emergency expense without enough money in savings is a stressful experience. Fortunately, Advance America offers emergency loans with fast approval decisions and same-day or next-day funding. Whatever the emergency, you may be able to get the cash you need to cover it.
Try a money-saving challenge today
If you’ve struggled to stick to a budget and grow your savings, consider a money-saving challenge! Whether you try a weeklong no-spend challenge, a short 3-month challenge, or a year-long savings challenge, you’ll save more money than if you hadn’t tried.