With New Year’s just ahead, many of us are thinking about our resolutions to improve certain aspects of our lives. Therefore, it makes sense that every year there is also a resurgence of money challenges, fitness challenges, and other gimmicks to motivate people to stick with them. Some of these money-saving challenges have seen an enormous amount of success. After the 52-Week Money Challenge came out, it helped a large number of people save more than $1,300 in a year. Naturally, people began looking for more ways to challenge themselves to save. Enter: The $5 bill money challenge.
What is the $5 Bill Money Challenge?
The $5 bill money challenge is a bit simpler than the 365-Day challenge or any of the 52-week challenges. This challenge focuses on saving the change you receive from shopping and all your other cash transactions. But instead of pinching pennies, you’re putting away small bills. Any time you pay in cash and receive a $5 bill back with your change, you put that $5 into savings.
Unlike other money challenges, the $5 bill money challenge doesn’t have any set format for week-to-week savings. You choose how much and how frequently you contribute to your savings account. If your total at the grocery store comes to $11, and you hand the cashier a $20 bill, you’ll likely get a five to add to your savings jar (or piggy bank). If you do this regularly and don’t touch this fund for the next 12 months, you could have a good amount stashed away by this time next year.
But because it doesn’t have any set guidelines, it does make it harder to decipher how much you can actually save with this challenge. So, how much have other people saved?
How Much Can You Save?
The amount of money people have saved with the $5 bill money challenge varies. It all depends on how committed you are to your savings goals. The more often you put money into your account, the more you save. If you want to see real results, you need to make a conscious effort to contribute to your fund. Setting alarms or reminders are great ways to keep you on track.
All in all, if you have the mindset that you are going to stash every $5 bill you receive away, it can wrack up to some serious savings. One woman saved $40,000 by stashing away her fives. Others have been able to save hundreds in a fairly short period of time as well.
How to Track the $5 Money Challenge?
What has made so many other money challenges so successful is that most of them have some sort of tracking system. Having a visible way to see your progress is an excellent motivator. The 52-week money challenge, for instance, has a chart that allows you to log how much you saved each week of the year. So, how do you go about tracking the $5 bill challenge?
First, you can put all of the $5 bills in a piggy bank, envelope, or jar. Once a week, remove the $5 bills and count them. Record the amount of money you were able to save that week and enter it in this spreadsheet. Then, put that cash into a separate savings account or another place where you won’t be tempted to dip into it.
If you know your way around spreadsheets, you can also create your own graphs tracking your progress. Not only will you have a tangible way to see how much you save, but it may actually excite you to continue adding to it throughout the year.
What Are the Drawbacks of Cash Savings Challenges?
Restricting yourself to cash-only transactions is a tried-and-true budgeting tactic. However, there are a few drawbacks to this particular money challenge. If you don’t spend much cash, it will be hard to accrue $5 bills. Many people are not comfortable having that much cash around the house, or simply prefer to use debit and credit cards. If this sounds like you, then you can easily adapt this challenge to your lifestyle. Instead, transfer those $5 into your savings account every time you spend a set amount of cash. For example, for every $50 you spend, put $5 into savings. That way, you can still reap the benefits of the $5 bill challenge without having to deal with physical currency.
Also, if you are struggling to cover all your monthly expenses, your stash of $5 bills can become rather enticing. Sometimes, it is better to keep it completely out of reach. As the old adage goes, “Out of sight, out of mind.” For those who find it impossible to resist spending their spare cash, there may be other savings methods better suited to you.
What Digital Tools Can Help You Save More?
Mobile banking has made saving money easy and convenient. You can automate regular deposits into your savings account, scheduling it just like you would other payments.
Or, you can use mobile apps to help you reach your savings goal. Several savings apps like Acorns will round up your balances and deposit the change into a dedicated account. Mobile apps are perfect for people who forget to make saving money a priority or have to manage several financial goals at the same time. No matter which money challenge you choose, they all have the potential for success. The best one is the one that keeps you motivated to keep saving.
Have you tried this money challenge or any other? What were your results?
- Take the 2019 Debt Payoff Challenge
- The All-Cash Diet – Are You Up to the Challenge?
- 365-Day Dime Challenge