Participating in a money challenge is a great way to bolster your savings account. However, the popular 52-Week Savings Challenge can be intimidating, mainly because some of the weekly amounts can feel pretty high when you look at them on a chart. But, by breaking it down and starting small, you can accomplish the same thing without some of the stress. All you need to do is take it one nickel at a time.
The Origin of the 365 Day Money Challenge
Back in 2014, we decided to look for ways to make the 52-Week Savings Challenge a bit more accessible. Instead of large weekly deposits, participants only need to focus on small amounts each day.
This approach made the 365 Day Money Challenge a massive hit, especially since it’s relatively simple to adjust. If you want to save up more than $3,300 in a year, complete the challenge with nickels. If you don’t have that much to spare, you can use pennies and still save about $668.
How the Money Challenge Works
The premise of the 365 Day Money Challenge is simple. If you are using nickels, on day one you deposit $0.05 into your savings account. Then, you add $0.05 to your deposit on day two, making that deposit worth $0.10, bringing your total savings to $0.15.
On each subsequent day, you add a nickel to the previous day’s deposit. That means, on day 10, you deposit $0.50. On day 100, your deposit is $5.00. On the last day, number 365, your deposit is $18.40.
While the daily amounts seem small, they add up fast. At the end of the year, if you participate every single day, you’ll have a whopping $3,339.75 in your savings.
What Could You Do with $3,300?
Think about what you could do with over $3,300 each year. You could replace your living room furniture, buy a high-end computer, head out on a great vacation, or simply make Christmas shopping incredibly affordable.
Using the challenge to create or build your emergency fund is also a great decision. Similarly, $3,300 is a nice down payment on a vehicle or could make saving 20 percent down for the purchase of a home easier to manage.
If you want to help your child pay for college, $3,300 a year for a full 18 years is $59,400, not including interest. If you put the money into a 529 plan, the value will be much higher when it is time for your child to head to school.
Make It a Family Affair
While saving using the nickel strategy might be too much for your children, many kids can use the same plan and substitute pennies for nickels. With this approach, the largest deposit is just $3.65, which can be more manageable for youngsters. But, they still get to save up a decent amount of cash, having around $668 when the challenge is over.
If you want to instill good savings habits in your children, consider having them start with the penny challenge or another money challenge for kids. Then, as they get older, they can transition to the nickel challenge.
Additionally, there is nothing to say that you can’t increase the level of challenge yourself. If your income can support it, consider using dimes instead of nickels. You’ll be happy you did.
Using a Money-Saving App as an Alternative
If you prefer to try to save money with an app, you might want to consider using one like Digit. All you have to do is install Digit and it’ll analyze your savings account balances. It will automatically place small withdrawals into a savings account for you – money you probably won’t even notice. Once you activate the app, it requires almost no effort and you’ll be on your way to building your savings account. Check it out at Digit.
Do you have a favorite money challenge? Share it in the comments below.
Read More:
- Alternatives to the 52 Week Money Challenge
- Save Nearly $500 with the 30 Day Money Challenge
- Try the No Spending Challenge
