Try a 6-Month Savings Challenge to Reach Your Financial Goals
Our six-month savings challenge can help jump-start your savings plan, putting you on the road toward financial freedom.
Contributing Writer at Tally
January 5, 2022
When it comes to saving money, there are numerous tips, tricks and "challenges" available online designed to help you jump-start the savings process and reach your financial goals. Not every savings challenge is suitable for everyone, though, and it's important to find one that matches your style.
One option is the six-month savings challenge. If you can stick to this weekly savings plan, you'll end up with more than $2,100 in savings after six months. You can use this money to improve your personal finances and reach your savings goals. Let's take a closer look at how this money-saving challenge works and strategies to improve your chances of success.
What is the 6-month savings challenge?
The six-month savings challenge can be an excellent option for beginners just learning how to save money. It can also be useful for more experienced savers looking for ways to save more money or to make saving more fun.
Under the six-month money-saving challenge, you'll increase your savings rate by $6 per week for six months. By the end of the challenge, your total savings amount will be $2,106.
To elaborate, you’ll save $6 in your first week. In the second week, you’ll save $12. In the third week, you’ll save $18. This pattern continues for 26 weeks.
Here’s a complete week-by-week breakdown:
So, why consider this six-month savings challenge? For one, it can turn saving money into a game. You can create a chart of weekly goals and color it in as you achieve each step. Perhaps you make a mini-game board with 26 spaces and move a game piece along the board as you meet each goal.
You could even find a friend to do the challenge with you, turning it into a bit of a competition. Help each other save by committing to finding free ways to spend time together throughout the challenge or even find creative, free ways to celebrate your savings milestones together.
Another reason to consider the challenge is that you start small and slowly build the amount you're saving. Telling yourself you need to save $2,100 might feel daunting. But achieving small wins early in the challenge will give you a sense of accomplishment and motivate you to keep going.
What are some things I can do to help save money?
If saving money were easy, everyone would be doing it. "Life" often gets in the way, as we have expenses for things such as homes, cars and student loans.
If you need a bit of help getting started on your journey to financial freedom, consider implementing a few of these money-saving tips.
Determine your expenses and set a budget
Understanding your cash flow and setting a budget can help you stick to your savings goals. You’ll need to determine how much you make per week and your typical living expenses to set a budget. Then, you’ll need to add in your savings figure. The money you’re saving during your challenge should be considered "necessary" and not "optional."
If you don't think you have the money in your budget to hit your savings goals, you may need to re-evaluate a few things. Perhaps you are spending too much on discretionary expenses, like coffee at your local cafe or weekends out with friends. Consider frugal living options, like making coffee at home or hosting a game night at your place.
You can also consider taking on a side hustle to help supplement your income.
Store your savings separately
When you set aside money during your savings challenge, you may be tempted to spend it if you leave it in a checking account. Consider setting aside your money in a savings account so that it’s easy to keep track of spending money vs. saved money.
You might even consider making automatic deposits, which can help save money more habitual — though this may be a bit difficult if you increase your savings rate by $6 per week.
You can also set aside a cash envelope or piggy bank to make your weekly deposits in. Once you complete the six-month savings challenge, you can make a lump-sum deposit into a savings or investment account.
Pay down debt
Once you’re debt-free, you'll find that saving money is much easier. If you have debt, you’re likely making at least the minimum payments each month, which cuts into your budget. Debt also comes with interest, which costs more money in the long run. For this reason, you may want to prioritize paying down debt before taking on a savings challenge.
After you pay down high-interest debt, you should work to maintain your debt-free status. This is one of the reasons why a rainy day or emergency fund is so beneficial. Should an unexpected expense arise, like medical bills, you’ll have cash on hand to pay for the expense — instead of needing to put the expense on a credit card or take out a personal loan.
Set your goals
Knowing the "why" behind saving can be a great motivator to hold yourself accountable. Before you start a savings challenge, set financial goals for yourself. Is this extra money for a rainy day or emergency fund? Is it for a down payment on a home? Perhaps you'd like to set aside money for retirement. Whatever your personal goal is, understanding what you're working toward can help you stay on track.
Are there other savings challenges available?
Committing to a fun savings challenge can help you reach your savings goals. When browsing the internet, you'll find many different savings challenges to choose from.
Unfortunately, saving money can be hard. Perhaps that's why 39% of Americans don't have the cash on hand to cover a $400 emergency. The best money savings challenge isn't the one that promises to save you the most money. Instead, the best challenge is the one that you'll stick to.
Some other include:
52-week money-saving challenge: With this weekly savings plan, you start by saving $1 the first week and then save an additional dollar each week. So, $2 in week 2, $3 in week 3, etc. By the end of the year, you'll have saved nearly $1,400.
$5 challenge: Every time you come across a $5 bill, save it.
No-spend challenge: You can set up no-spend days, no-spend weeks or even no-spend months. If you elect for a no-spend day, you commit to not spending any money that day. If you choose a no-spend month, you may determine that you can buy essentials, but you can’t make any extraneous purchases.
Saving any amount of money is better than saving none at all. The more you save, the more comfortable you’ll become and the closer you’ll be to reaching financial freedom. So, find a savings challenge that you’re likely to stick to.
Start saving money today to improve your financial situation
Saving money can be difficult (and maybe even stressful), but it doesn't have to be. In fact, putting money aside can be fun, especially if you take on a savings challenge.
Savings challenges are excellent ways to get started on your path to financial freedom. While there are different plans available, one that we like is the six-month savings challenge. If you can adhere to the plan, you'll have more than $2,100 set aside within half a year.
When saving, setting a budget and sticking to it can be very helpful. Additionally, you should consider putting your savings in a separate account so that it’s not as accessible. Setting goals and paying down debt are two other tricks to help you put away a lot of money.
If you're looking for help paying down debt, be sure to consider Tally†. Tally is an app designed specifically to help you manage due dates and pay down credit card debt quickly and efficiently. Take time to learn more about how Tally can help you reach your savings goals.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.