This is by no means an advanced money concept. Still, I think it’s a good thing for anyone to do, no matter where you are in your financial journey. We all should have some money set aside for emergencies. And the 52 Week Money Challenge is an easy way to keep that emergency fund topped off each year. A lot of people start a new money challenge at the beginning of the new year. Typically, this is tied into their new year’s resolutions and the optimism around the beginning of a new year. However, you can start a money challenge at any time. There’s no rule that states when you can start working on your financial goals. So really, the best time to start a new challenge is whenever you are ready to get started.
That being said, the beginning of a new week or new month, is a great time to start. This is because psychologically, starting with a new week or new month gives you the sense of having a fresh start. The 52-Week Money Challenge itself is pretty straightforward. Save a little bit of money each week and gradually increase the amount saved by one dollar every week. The idea is that by the end of the year, you’ll have a decent stash of money saved away without even trying and you can start any time of the year!
The great thing is that the 52-Week Money Challenge can be totally automated. All you need to do is take a few minutes to set it up once, and then you don’t have to think about it. The computers take care of it all for you! I love seeing my emergency fund slowly grow each year without me even realizing it.
The Normal 52-Week Money Challenge
The normal way to do the 52-Week Money Challenge is through what you could call a gradual build-up. In week 1, you save $1. In week 2, you save $2. Week 3, you save $3. And so on and so on. By the time you get to week 52, you’ll be putting away $52 for the week. When you add it all up, that’s $1,378 over the course of a year. You can really play with the number and add more- why not?! But take a look at the below to see the 52-Week Money Challenge in action.
If you want to do it the normal way, that’s totally fine. I’m personally not a big fan of doing it this way though. It seems to take way too long and doesn’t seem all that efficient. Why save only $10 in the first month when you can definitely save much more? Plus, doing it this way puts unnecessary strain on yourself as the year progresses. I prefer balancing things out over the year. I feel like I notice the money disappearing even less if it’s the same amount being deducted, every week, without fail.
Another Way to Do The 52-Week Money Challenge
Instead of doing the 52-Week Money Challenge in the normal way, instead divide $1,378 by 26. The number 26 represents the number of paychecks we usually receive in a year. Most of you probably get paid in the same bi-weekly manner. $1,378 divided by 26 means you need to save $53 every two weeks in order to complete the challenge. That’s only $3.78 per day! I think every person reading this has the ability to save $53 every two weeks without even thinking about it. Would you even notice if your paycheck was $53 less each time? Setting up the 52-Week Money Challenge is a simple thing to do. Take whatever savings account you use and automate it to deduct $53 every two weeks from your checking account.
Set It Up Once And Do It Forever
Obviously, the 52-Week Money Challenge isn’t going to make you rich. But what it does do is set a floor for what you’ll save each year. We all need that emergency fund. If you’re still building it up, then putting away money automatically is a good way to get started. Even if you have a full emergency fund, saving extra isn’t a bad idea. We all have emergencies and my guess is that, over the years, you’ll start dipping into that emergency fund. Isn’t it much easier to keep that emergency fund slowly growing, with minimal work, instead of having to scramble to refill it if something happens? If you really don’t want to store that extra money away in an emergency fund, that’s fine too. Just find something else to put that money into. The point is to keep it doing this challenge forever, automatically.
And of course, if you’re saving more money, keep doing that too! The point is that the 52-Week Money Challenge sets a floor. No matter what happens, you’ll automatically save money.
If you’re looking for ways to save more money, check out some additional apps that help squeeze a little bit more into savings every month:
- Dobot is a free app that monitors your checking account and automatically saves small amounts each week that it thinks I can afford to spare. It’s a great way to save more money without thinking about it.
- Peak is another free app that monitors daily transactions and rounds transactions to the nearest dollar. It then saves the spare change in a separate savings account.
Tips to Free Up More Cash for the 52-week Savings Challenge
Here are some key tips to be successful when you start this 52-week challenge!
1. Build it into Your Budget
When it comes to saving money, it’s all about doing it strategically. Your budget is essentially you creating a plan and telling your money what to do without you overthinking it. Building your savings plans into your monthly budget ensures you have an actionable plan to actually save rather than just winging it. Create a line item specifically for this challenge and break it down according to how you are paid. i.e. weekly, bi-weekly, or monthly.
Don’t like the name “budget”? Call it something else! There’s nothing that says you have to call your budget a budget. Call it something fun that will inspire you to use it towards achieving your financial goals.
2. Sell Things You Don’t Need
So many of us have things sitting around our homes that we don’t need. Kitchen cabinets. closets and kids’ toys are a great place to start decluttering and getting rid of things you don’t need.
Places like eBay, Etsy, Facebook marketplace and Poshmark are great places to offload these things for some extra cash. You can then take this extra money and use it to amplify your savings contributions.
3. Find Expenses You Can Cut Back On
Cutting back on expenses tied to things you don’t need or use can free up additional funds that you can put towards saving more. Ask yourself, what are you paying for that is not essential? Is it the gym membership that you hardly use? Can you work out at home instead? Is it going out to eat multiple times a week with friends and co-workers? Can you cut it back to just a couple of days? Or, is that streaming service you haven’t logged into for months? Maybe it’s time to cancel it and repurpose the funds?
Start by taking a look at your last 3 months of bank and credit card statements to find areas you can cut back. Also, review your recurring bills. The idea here is to get creative in the ways in which you can cut back. When you do this exercise, you might very likely find a few areas where you were spending money you didn’t really need to spend.
Benefits of the 52-Week Savings Challenge
1. You’ll Become a Consistent Saver
This money savings challenge is a great way to get into the habit of saving consistently, especially if saving money is something that you struggle to do. You get to watch your balance grow over time and build a neat little sum of money as well.
2. You’ll be Challenged to Save Even More Money
For extra credit and to save more, once you get into the swing of things, challenge yourself to double or triple up your weekly deposits. Alternatively, anytime you have some money to spare, you can put it towards your savings challenge.
3. You’ll Get Motivated to Achieve Even Bigger Financial Goals
The progress you make will motivate you to want to do bigger and better as you pick up steam with this savings challenge. Sometimes a small boost from doing a money challenge can cascade into all sorts of different avenues in which you can improve your personal finances.
The 52-week challenge is a great way to start saving money. You have the opportunity to improve your money mindset, build good money management habits, and set the foundation for how quickly you accomplish your financial goals. Over time and with commitment, your bank account balance will grow and you’ll gain financial peace of mind. It becomes a win-win experience for you!
Consider trying the 52-Week Money Challenge.
Article Credit: https://financialpanther.com/52-week-money-challenge-2017/ https://www.clevergirlfinance.com/blog/the-52-week-savings-challenge/