Try the 52-Week Money Challenge and See How It Can Help Amplify Your Savings
Whether you're saving money for a cash cushion, emergency savings, or a long-term goal like buying your own home, it all requires financial planning. But when we adhere to a strict budget, the thought of putting money aside may seem implausible. "Having money in a savings account can provide a certain amount of financial security," says Jill Gonzalez, analyst at WalletHub. "When you have money saved, your life can become easier, because you'll be able to maintain your lifestyle even in the event of an emergency or in the case of an unexpected large expense."
The good news is that most of us can find ways to save, and the 52-Week Money Challenge makes it fun. Here's how it works.
What is the challenge and how does it work?
A year has 52 weeks in which we can put money aside for the future; the challenge is to save money in a regimented way that gets results. "What you have to do is set aside an increasing amount of money each week, by matching the savings amount with the number of the week in your challenge," explains Gonzalez. "Basically, you'll be saving $1 in the first week, $2 in the second week, and so on. If you're able to stick to this for the whole year, you'll end up with $1,378 in savings." It's best to put this money into a high-yield savings account so that you can also earn interest on it; it also helps you to avoid impulse spending.
Make sure to have a clear goal in mind: What are you saving for? This goal can motivate you to continue with the challenge even when you see something that you want to buy right now. Keeping the money in a separate savings account (maybe even in a different bank that doesn't have as many ATMs in your area) can help you to stay on track and work toward your savings goals.
How does it help you save money?
People like challenges. It gives us something to work toward, and we enjoy meeting a goal. Building a savings account is an achievable goal. The challenge helps to break it down into smaller steps that make it easier for us to stick to the plan. "You can customize the way you save to fit your needs. For example, you can save more by starting with $2 in the first week, then $4 and so on, or you can set a certain goal you want to reach at the end of the year, divide that amount by 52, and set aside a fixed amount each week," says Gonzalez. "If you think you'll be able to save less towards the end of the year because of holiday spending, you can also do the challenge reversed. Start off with $52 in the first week, and progressively lower the amount until the end of the year."
Plus, we have the benefit of seeing the results at the end of the year. Since savings accounts are easy to liquidate, you will have the money available when you need it depending on your end goal.