365 day savings challenge Archives - SavingAdvice.com Blog

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 Empower. All you have to do is install Empower, 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 Empower.

Do you have a favorite money challenge? Share it in the comments below.

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365 Day Penny Challenge (click on image to print)

The penny challenge is one of the easier challenges to understand. Each year has 365 days, and on each of these days you need to pay yourself first. It can be as little as a penny, and as much as $3.65. Once you have paid the amount, you cross it off the challenge sheet, and the next day pay one of the remaining amounts still available on the chart. At the end of 365 days, you will have saved just under $668.

Another important part of this challenge is that you should physically place the amount you’re saving each day into a jar (or other container). So you don’t accidentally forget, the jar should be in a place you’ll see each day. You can then place the accumulated money into a dedicated bank account every week or so. This way you have your savings all in a single place where you know it’ll be each day, and it will help ensure that you make the savings payments daily.

The big advantage of this challenge over the 52 week savings challenge is that it requires you to make a payment to your savings each and everyday. The goal is not only to get you to save the $668, but also to instill the habit of saving money, even small amounts, so that it becomes a part of your daily routine. Once the habit is formed, you should be able to continue it with even bigger challenges in the future.

Aut0mate Your Savings

Savings apps like digit.co are great alternatives or supplements to money challenges. Basically, the app analyzes your account, and puts small amounts into savings for you. Automating your savings account can make it a lot easier to build that emergency fund or vacation fund you’ve been planning to start. You can sign up for digit.co here.

So what are you waiting for? The day to begin is today, and there really is no excuse not to. If you started another challenge this year but have already stopped for some reason, it’s time to begin again. If you know someone who procrastinates, tell them to try this challenge. You have nothing to lose except the fear of not having an emergency savings account. And for those of you who are saying to yourself that you like the idea, but don’t know where you would begin to find the savings, you can’t even give that as an excuse. Here are thirty-one savings tips that will ensure that you’re able to make it through the first month of the penny challenge.

(Photo courtesy of Sh4rp_i)

Save an Extra $3,339.75 This Year With the 365 Day Nickel Challenge