Among the different ways to trick yourself into saving, money-saving challenges are some of the most engaging.
They can help you feel connected to finances by requiring frequent check-ins and debunking feelings of inadequacy when it comes to saving. For Cristina Brown, a self-described savings-challenge designer and founder of the blog Happy Savings Co, money-saving challenges helped her go from spending to saving.
“I recognised the need to save money, and I thought that this would be a good way to kind of gamify it,” Brown said.
If saving for tomorrow seems out of reach, the right money challenge can generate excitement, push competitive buttons and potentially increase savings.
Viral challenges that can add up
Before starting a savings challenge, review your budget to trim unnecessary expenses. The amount of breathing room in your budget will determine the level of difficulty that's possible for a challenge.
Assigning a goal to a challenge may also keep you motivated and consistent, whether it be saving for an emergency fund, a vacation or something else.
A few popular challenges to consider include:
• ‘Keep the change’ challenge
Beginner-friendly savings challenges allow for passive saving, which takes less effort and adopts an out-of-sight approach. For a designated amount of time, these challenges involve putting aside denominations of these bills that are left over from cash transactions.
Ezekiel Waisel, a certified financial planner at US-based financial planning firm, tried one such ‘keep the change’ challenge in 2016 and saved about enough in a year for a round-trip flight. “I don't use a lot of cash, so the fact that I even saved that much was pretty surprising to me,” he said.
• The ‘52-week’ challenge
This challenge hikes up the savings by a single amount weekly (be it $1 or Dh1) and requires you to actively save by budgeting for each week.
For instance, in the first week you save Dh1, in the second week Dh2, and so on until the 52nd week. The challenge can also be reversed to start saving Dh52 in the first week and work downward, as is the preferred method among financial planners in 2022.
Either way, the challenge can save Dh1,378 in a year, enough to cover an emergency or a large purchase.
At the end of the year with holidays – even with all of our best efforts of setting up sinking funds for the holidays and stuff like that – things can still get pretty tight, so I reversed the order to save the bigger amounts at the beginning of the year,” said Brown. A sinking fund holds money that's earmarked for a specific goal or expense.
• The ‘100 envelope’ challenge
This potentially lucrative and difficult money-saving challenge requires numbering 100 envelopes from one to 100, shuffling them and drawing one randomly every day. The number on the envelope drawn determines the amount of cash that must be saved.
Drawing high numbers consecutively can prove difficult, so this challenge is ideal for those with more cash flow. If completed, it saves you a huge chunk of change, but don't hold money in envelopes too long, money experts opine.
Keep it safe by designating a day every other week or monthly to deposit savings into a high-interest bank account.
• The ‘weather Wednesday’ challenge
For thrill-seekers with enough cash flow, this challenge can offer big savings with less predictability. On every Wednesday, for a year, save cash or make a deposit into a savings account based on the temperature in your city.
If it’s 50 degrees outside, for instance, save $50 or Dh50. The challenge gets harder as it gets warmer, so it's best to start in the winter when it's more manageable.
• ‘No spend’ challenge
It's as straightforward as it sounds: You commit to only spend on essentials over a certain period to save big.
Some people even clean out their pantries to lower their grocery bills. The level of difficulty is subjective for this challenge, but it's likely more sustainable over a short term.
• ‘Customise your own challenge’ challenge
Modify a popular challenge to fit your needs by shortening or extending deadlines or the cadence of saving.
For instance, you could stretch the 100 envelope challenge over 100 weeks (about 2 years) instead of days, if that's more achievable.
Brown also creates her own challenges. In one such challenge, she seeks discounts at the grocery store to stash savings for future goals. A survey showed that one in every two people worldwide saved about half of their monthly earnings-worth in 2021 by juggling multiple challenges each month.
Learn what motivates you
Mastering a savings challenge involves understanding your motivations. Consider whether you're motivated by big or small deposits, randomness or predictability, cash or electronic deposits, or active versus passive saving.
If you're unsure, try a few money-saving challenges to learn what works. Passive savings challenges like keep the change can lay a solid foundation for bigger challenges and savings.
“I think passive is a great starting point, and once you get comfortable and consistent with passive saving, you can then add or switch to an active savings model,” Waisel added.
Finding the right challenge may require trial and error, but even as you experiment you'll likely save money in the process.
