If hindsight is, well, 2020, and you didn’t meet your financial goals this past year, you’re not alone. But, with a still relatively new year comes new opportunities for saving more money. Whether you’d like to start an emergency fund, pay for a vacation (vaccine willing), focus on your retirement savings, or save for a down payment on a home, putting thought into it earlier in the year is the right way to go.
To kickstart your savings efforts and make the most of your financial journey this year, consider taking part in a money challenge or adopting a year-long savings strategy. These approaches to putting your money away are not only proactive, but they can be fun and exciting as well.
There’s a variety of money challenges out there, each with its own benefits and drawbacks. If you know you want to save money but aren’t quite sure how to go about doing so, the 52-week challenge is a great option—and it’s still early enough in the year to put this into action. Here’s what you need to know about the money-saving strategy, as well as other methods to consider.
What is the 52-week money challenge?
Sometimes called the new year savings plan, the 52-week challenge is an easy-to-follow year-long method. The first week, you save $1, the second week you save $2, the third week you save $3, and so on through all 52 weeks of the year.
This simple savings technique is relatively easy to implement. Not only that, but its straightforward structure and clear-cut weekly amounts can help you build good financial habits and get used to saving money more regularly.
In the first few months, you’re only saving a few dollars a week, but by the end, it’s a couple hundred dollars a month. Starting out small and gradually increasing savings amounts throughout the year works really well for some people.
How much do you save doing the 52-week challenge?
When you reach the end of the new year savings challenge, you’ll have $1,378 in the bank. If you want to up the ante, you might consider doubling your weekly savings amounts, starting at $10 in week one instead of $1, or bumping up your savings by increments of $5 instead of $1.
The 52-week savings challenge in reverse
There are several variations of the 52-week savings plan, one being to do it in reverse. You’d save $52 the first week, $51 the second, $50 the third, and so on until you’re down to saving just $1 during the last week of the year.
While you’d have the same amount by the end of the year, this method might be better for those who may be unsure how much they can save later on. With an uncertain economy, you might be more confident about putting larger amounts aside now than months down the road.
Plus, unlike the traditional 52-week plan, it gets easier along the way. Some might feel like they’re being rewarded for making larger contributions over the first few months, which can be motivating. Others may be inspired by the initial momentum and encouraged to continue with larger amounts through the rest of the year.
How about a bi-weekly challenge?
Another option is to combine two weeks at a time and save on a bi-weekly basis. The first time would be $3 (combining weeks one and two), the second would be $7 (combining weeks three and four), and so on. Again, the year-end total will be the same ($1,378), but this approach might be easier for those who receive bi-weekly paychecks.
Other new year savings plans
The year-long theme makes the 52-Week money challenge appealing to those who are looking to save money in the new year. That said, it’s certainly not the only money-saving strategy out there.
As we mentioned earlier, there are lots of ways to save money — and it’s a good idea to consider various methods to figure out which one will work for your unique situation. Some of our favorites include the $5 challenge, weather Wednesdays, no-spend days, the penny-pinching plan, the latte challenge, the receipt challenge, and the daily-savings plan.
What is the $5 challenge?
The $5 new year savings challenge is simple. Every time a $5 bill comes into your possession this year, you save it. You can either keep the cash in a piggy bank (or another secure spot in your home) or deposit it into a savings account.
This saving strategy is easy and can result in a substantial amount of money by year’s end. However, since you can’t be sure how many $5 bills you’ll actually come across—especially if you don’t use cash often—it might not result in a substantial sum.
Are Weather Wednesdays right for you?
If you want to save a bit more money, Weather Wednesdays could be an ideal option. Every Wednesday, you’ll check the weather and save the dollar amount of the daily high temperature in your current location.
So, on super-chilly winter weeks, you might only have to save around $30. Spring and fall could be more in the middle. And in the heat of summer, you might be saving close to $100 a week. Depending on where you live, you could have $3,000 or $4,000 in the bank by the end of the year.
Are you up for a no-spend day or week?
Another option is to plan for no-spend days or even weeks. This means you won’t buy anything for an entire day or week.
If you plan ahead with groceries, living expenses, and other essentials, you can probably avoid making any purchases. Keep track of spending opportunities that come up, and transfer that amount into your savings account.
What is the penny-pinching new year savings plan?
The penny-pinching new year savings plan is similar to the 52-week challenge. On the first day of the year, you save just one cent. The next day, you’ll save two cents, three cents on the third day, and four cents on the fourth day.
You increase your daily savings amount by one penny each day, and on the final day of the year, you’ll save $3.65. This might not seem like much, but it’ll actually come out to $667 after 365 days.
How much will you save by making your own coffee?
With the latte challenge, you’ll avoid buying coffee while out for an entire year. Instead, you’ll make it at home or drink the free coffee from your place of work.
Beyond that, you should actually save the amount you’d be spending on coffee. If you typically buy $4 lattes five days a week, you’ll save over $1,000 by the end of 2021.
What is the envelope challenge all about?
For the envelope challenge, you take 100 envelopes and mark them with dollar amounts from $1 to $100. Each week, you’ll pick two at random and save the amounts marked.
This new year money saving challenge can be done with cash, in which case you’ll place the money inside each envelope. However, you can also just transfer the funds from your checking account into your savings account.
A penny saved is… a penny saved?
The receipt challenge calls for actively saving the amount of money you “save” on discounted purchases. For instance, your grocery receipt might say “You saved $15.50,” in which case you’d transfer $15.50 to your savings account.
It can also work when buying clothes or other merchandise. If you purchase a $100 item that’s 25% off, you’d put $25 toward your savings.
Can you save a few dollars a day?
With the daily-savings plan, you’ll check in with yourself every single day to see if you’re able to transfer a few dollars to your savings account. Start by setting an alarm or a daily reminder on your phone. When you get the notification, consider whether you can afford to save $5, $10, or even $15 that day.
Saving $5 a day for an entire year would come out to $1,825. $10 a day would be $3,650, and $15 a day would be $5,475. If you’re not able to swing it every single day, no sweat. The point is to check your account daily to see what you’re able to save. Little bits really add up!
How Tally can help with your new year savings plan
These year-long savings plans can provide you with the structure and guidance you need to meet your savings goals and make good on your financial resolutions. With that said, paying off debt can make saving money a lot easier.
Carrying credit card debt makes many people feel like they can’t save for retirement or build an emergency fund. Tally is here to show you how to pay off credit card debt while still making progress toward your financial goals.
Tally provides user-friendly guidance on how to pay off debt with as little interest as possible. The app recommends an amount to pay toward your balances each month based on your spending and the details of each account. Plus, it simplifies debt repayment into one monthly payment. Download the app to get started.