There are several saving categories that you should monitor while enhancing your financial stability. You should aim to have three to six months of living expenses in your emergency fund. Additionally, making retirement savings a priority is essential. Depending on your circumstances, you might also need to allocate funds for a down payment on a home, college expenses, or caring for elderly parents.
For many people, getting started is the hardest part of saving. If you’re unsure where to begin saving, or if you’re struggling to allocate funds, you can start building a saving habit with the 52-week money-saving challenge.
Principles of the 52-Week Money-Saving Challenge
The principles of the 52-week money-saving challenge are based on simplicity. You start by saving just one dollar in the first week of the challenge. In the following week, set aside 2 dollars, and in the next week, 3 dollars. Continue to increase your savings by one dollar every week. By the end of the challenge, you will be saving more than 50 dollars a week, resulting in a total saved amount of less than 1400 dollars by the end of the year. By starting with something small and creating a weekly habit, the 52-week money-saving challenge can help you build a habit that doesn’t feel overwhelming while accumulating a significant amount of savings by the end of the year.
Benefits of the 52-Week Money-Saving Challenge
There are many small strategies embedded in the 52-week money-saving challenge that work together to make saving money easier.
- Start small: It’s easier to find one dollar to save for a week than to say you’ll save 100 dollars a month. If you feel anxious about the idea of saving, the challenge helps you start with smaller amounts by beginning with something small.
- Build momentum: The more you work towards a financial goal, the more momentum you build, and the more results you see each week. This can motivate you to keep saving and help you establish a long-term habit.
- Save as you go: To reach the same saving goal, you would need to save approximately 114 dollars a month. Setting aside a few dollars a week is often more manageable than finding 100 dollars at the end of the month after paying all your bills.
- Flexibility: If you’re struggling to save, it may be due to other pressing financial obligations, such as debt repayment. Since you’re only allocating a small amount each week, the 52-week money-saving challenge keeps your finances flexible, rather than tying up hundreds or thousands of dollars at once.
- Make it a game: Participating in a challenge, especially if you’re doing it with a friend or group, can help make saving more enjoyable. Instead of being a difficult task you have to do, it becomes a game you want to win.
Anyone can use these strategies to save money, even without the 52-week money-saving challenge. However, the benefit of the challenge is that it integrates these strategies, making saving more attainable and manageable from the start.
Challenges of the 52-Week Money-Saving Challenge
It’s relatively easy for anyone to set aside just one dollar a week, especially with a visual reminder like a jar filled with money sitting on your shelf. However, as the challenge progresses, you may face difficulties.
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It is fortunate that there are strategies you can use to overcome these challenges and reach the end of 52 weeks with full savings in your account.
Reaching the End
By the end of the year, it becomes tough. Saving $50 a week in December can be challenging, especially considering holiday spending on gifts, travel, office gift exchanges, and holiday meals.
Note: If you’re starting at the beginning of the year, consider taking the challenge in reverse: place $52 in the first week, $51 in the second week, and increase the amount weekly. This way, you’ll only need to save a few dollars a week during the expensive holiday months.
Remember to Allocate Money Each Week
Additionally, since one dollar a week, two dollars a week, or three dollars a week are very small amounts, it might be hard to remember to allocate that money every week with everything else you have going on.
Note: Create a visual reminder or set a regular appointment in your calendar to help you remember. You can also do the challenge with a friend to keep an eye on each other.
Strict Self-Control
Practicing self-control can be tough, especially if you are doing the challenge with cash or in an easily accessible checking account. When you find yourself in need of small amounts of money, it can be tempting to just take a few dollars from your savings.
Note: If you put the money in a checking account, remove your debit card to make it harder to spend. You can also place the money in a savings account that earns interest. Knowing that money is earning money just by sitting can make it less tempting to spend.
Final Conclusions
When it comes to saving, many people struggle to start and stick to the plan. Others are unsure how to allocate savings while keeping up with their other financial commitments.
If you need to do any of the following, the 52-week money saving challenge can provide a clear path to get started:
- Start saving money
- Begin building an emergency fund
- Make saving a financial habit for you
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Sources:
- Washington State Department of Financial Institutions. “Developing an Emergency Savings Account.”
Source: https://www.thebalancemoney.com/what-is-the-52-week-money-challenge-4158288
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