Let's admit it, saving money can be a challenge especially when you’re already working so hard just to pay the bills. Wouldn’t it be nice to have some extra cash sitting in your bank account to protect you against life's unexpected events or to invest in a wealth-producing asset? Whatever your financial goals are, this money-saving challenge can get you there faster.
Imagine having $5,000 sitting in your bank account by this time next year.
I found the perfect challenge on Dollar Sprouts to help us save $5,000 in 52-weeks and a printable template to stay on track.
This 52-week challenge is very simple. Your goal is to put away a bit of money each week, increasing the amount as you go along, then decreasing, then increasing again. You can put the money in a jar or deposit it into your bank account — it’s up to you.
The goal of the money-saving challenge is to help you develop better money behaviors and get in the habit of saving money — something that will benefit you for the rest of your life.
Benefits of the 52-Week Money Challenge
Everyone can benefit from saving some extra money, whether it’s for an emergency fund or a vacation. If you have big financial goals in mind, this challenge can help you save the money you need faster.
Do you want to take your family on a week-long trip to the Bahamas? How about investing your money to start an online business? Goals like these often require a large chunk of money that might seem out of reach, but, with a $5,000 savings challenge, are doable.
Here are other major savings goals that get easier to achieve with a challenge like this one:
Saving up for a car
Saving for a down payment on a house
Going back to school
Accelerating your debt payoff
If you are in the process of paying off debt, using a savings plan like this one — but then immediately applying your savings to your debt balances — is a great way to chip away at your debt faster than just paying the minimums each month.
Money-Saving Ideas to Help You “Win” the Challenge
As things become a little tougher throughout the challenge, it’s imperative that you follow some of the guiding principles in saving money. Here are some money-saving ideas that can help you achieve your $5,000 goal by year-end.
Create a budget
Contrary to popular belief, sticking to a budget does not need to be restrictive. The trick is to make your budget work for you, not the other way around.
Creating a budget doesn’t have to be difficult. You can use pen and paper, an Excel sheet, or a budgeting app — whatever system works for you. The important thing is that you make a plan for your money, then check in frequently to make sure you’re sticking to it.
Start a side hustle
There are countless ways to make money if you know where to look.
They won’t make you a millionaire overnight; but if you can find the gigs that work for you and stick to them, you can bring in extra money to put toward your savings goals. To figure out which side hustle you should pursue, take inventory of your skills. What can you offer that someone will pay you for? From there, it’s all about creating your offer and finding the right people who need what you’re selling.
Increase Insurance Deductible
One way to save money is to lower your spending. An easy way to save $5000 this year is to increase your insurance deductibles. For example, consider your home and auto insurance deductibles. A recent study reported that homeowner's insurance premiums hover around $1,200 a year. If you bump up your deductible, for example, from $500 to $1,000, you could save as much as 25% on your premiums. Remember, a higher deductible means the insurer will have a lower risk, and as a result, offer you a lower premium.
If you consider this strategy, speak with your insurance agent. They will tell you how much you’ll save after increasing the deductible. You can also use this option for auto insurance. A study reported that you could save up to $30 per month after increasing the deductibles, from $250 to $1,000.
Potential Savings: $600 a year.
Cancel Unnecessary Subscription Services
A study reported that you might spend $200+ on monthly subscriptions. Think video streaming, photo editing apps, and more.
The money you pay for these subscriptions may seem minimal, but it adds up. $20/mo for one, $50/mo for a subscription box, and so on. Spend the time and review all your subscriptions and identify those you will cut. Some subscriptions have alternatives, which are free or low cost. For example, you may subscribe to Audible for $20/mo, an audiobook service. Audible may be popular, but there are free alternatives.
Potential Savings: $2400 a year.
Sell Items You No Longer Use
No doubt, you have stuff you don’t need to use at home or the office anymore. So, such things might seem like junk, but I bet some will have value among them.
The quickest way you can make extra money is to gather up all the items you no longer need and sell them. And, if you have enough stuff, you can host a yard sale and get rid of them fast. A yard sale is an excellent way to get rid of your items within a day or two. If you have more valuable items, they will likely fetch more money online. For example, you might consider Facebook marketplace or Craigslist. I like Craigslist due to its wider audience but be mindful and cautious when meeting buyers in person.
Potential savings: $1,000Cut out wasteful spending
Where to store your savings
While you are plugging away at your savings challenge, you’ll need a safe place to store your money throughout the year. If you want easy access to your money, opening a high-yield online savings account is a smart choice. Before opening an account anywhere, make sure you are getting a competitive interest rate.
If you don’t plan to touch your savings for several years (or longer), consider investing it in the market. Investments can go up and down in value, so only choose this option if you are comfortable with taking on some extra risk. The benefit of investing your money in the market is that, over the long term, stocks have returned an average of about 10% each year. This investing app is best for beginner investors.
Go ahead and reduce spending with these tips. And at the end of the challenge, I have no doubt you’ll save $5,000 this year. It's important to remember, you don’t have to deprive yourself! Cut your spending from various activities, and your savings will add up with time.
Join OASIS Financial Wellness community to connect with like-minded people on a mission to create financial freedom and generational wealth. You can also find an accountability partner to ensure success in this 52-Week Money Challenge.
What would saving $5,000 do for you?