If you have ever struggled to save money or stay consistent with a New Year’s savings challenge, I know exactly how you feel. Over the years, I’ve personally tried and tested various money-saving challenges, and I’ve seen firsthand how transformative they can be. These challenges have not only helped me reach my financial goals but have also improved my spending habits.
As we step into the new year, many of us are eager to set goals, and saving money is often included in those resolutions. However, I understand how daunting it can be to start saving right after the expenses of Christmas and the festive season. That’s why I’ve compiled this guide to share proven money-saving challenges that have worked for me. Let’s dive in.
What Is A New Year Savings Challenge?
A New Year savings challenge is a structured, often fun approach to saving money over a specific period, typically over the course of a year. These challenges are designed to make saving money manageable, flexible, and even enjoyable.
The ultimate goal of a savings challenge is to help you develop financial discipline while achieving a specific objective, such as saving for a vacation, paying off debt, or growing your emergency fund. Whether you’re new to saving or looking to refine your financial habits, these challenges provide a practical and customizable pathway.
Why Should You Embark On A New Year Savings Challenge?
Starting a savings challenge in the new year isn’t just timely, it’s strategic. Contrary to popular belief, the new year is actually one of the best times to start a savings challenge. Here are four compelling reasons why a New Year money-saving challenge could be the best financial move you make this year.
Helps You Achieve Your Financial Goals
A savings challenge offers a clear roadmap for reaching specific financial goals. Whether it’s buying a home, starting a business, or simply growing your savings.
Makes You Smarter About Money
A savings challenge compels you to evaluate your spending habits, helping you identify areas where you can cut back and save more. It’s a powerful tool for gaining better control of your money.
It Is Customizable
Savings challenges are not a one-size-fits-all. The beauty of a New Year savings challenge is that you can easily tweak it to suit your income and lifestyle. Whether you save weekly, biweekly, or monthly, you can adjust it to make it work better for you.
Builds Saving Habits
Watching your savings grow week by week is incredibly rewarding. It’s a tangible reminder of your progress and a motivator to keep going.
13 Money Saving Challenges To Try In The New Year
Ready to crush your savings goals this new year? Here are 13 New Year money savings challenges to help you meet your financial goals this year:
1. Digital Detox Challenge
The Digital Detox challenge is a powerful way to not only save money but also put the time spent on social media in check.
For this challenge, commit to reducing your time on social media and other digital platforms which often exposes you to tempting sponsored ads or content. To make this work, you will need to cut back on impulse buying, limit streaming services, and cancel or pause online subscriptions and paid apps you rarely use.
2. No-Spend Challenge
Commit to a specific period – such as a week or month – where you only spend money on essentials. This challenge not only curbs unnecessary expenses but also encourages mindfulness about your spending habits and can be a great way to reset after the holiday season.
3. 52-Week Money Challenge
The 52-Week Saving Challenge is one of the most common New Year savings challenge. It works by saving incrementally each week over the course of 52 weeks (a year).
For example, you start with as little as $1 on week 1, then $2 on week 2, you keep progressing continuously each week till the end of the year. If you are committed to it, you will have saved a total of $1,378.
4. 26-Week Saving Challenge
This challenge works perfectly well for people who receive payment biweekly.
You begin by saving $3 in the first week, gradually increasing the amount by $3 every other week. For example, in two weeks, you should have saved $6, and $9 in three weeks, $12 on the fourth, and so on.
5. 5p Money-Saving Challenge
The 5p money-saving challenge is a simple strategy where you increase the amount you save every day by 5p. You begin by saving 5p on the first day, increasing the amount by 5p daily. If you are consistent, you’ll have saved approximately $3,400 by the end of the year.
6. Reverse 52-Week Money Challenge
The reverse 52-week challenge is an alternative method that modifies the original 52-week money saving challenge. Instead of starting with a little amount, like ($1), you begin with the largest amount ($52) in the first week. As the year progresses, the amount you deposit keeps dropping until the 52nd week when you deposit $1.
This strategy is perfect for those who want to front-load their savings when motivation is at its peak.
7. Penny Challenge
This is typically another fun and simple money saving challenge you want to consider.
In this challenge, you save a penny on day one, two pennies on day two, and so on. By the end of the year, you’ll have accumulated $667.95.
8. No-Dining Out Challenge
If you have been looking for a way to stop eating out, then this challenge is for you.
The No-Dining Out Challenge is one that helps you cut down expenses by committing to cooking all your meals at home and avoid unnecessary takeout, dining out, or snacks on the go for at least a month or more.
9. Round-Up Saving Challenge
The round-up saving challenge is pretty easy to follow. It works by rounding up your purchases to the nearest whole number and saving the difference.
Anytime you make a purchase, check the total price, round it up to the nearest dollar, and save the difference. The amount saved is the difference between the rounded-up total and the actual price.
This challenge is effective because the savings are small and often go unnoticed in your daily transactions, but over time these small amounts add up to something tangible.
10. Money Mistake Jar
I call this challenge a self-accountability exercise because it is designed to help you become more cautious about your spending habits while saving money.
For every time you make a money mistake – impulse buying, eating out, or going off budget – you put a small amount of money into your savings jar. This way you are not only taking consequences for your spending misstep, but also growing savings for yourself.
11. Cancelation Challenge
Many of us unknowingly pay for subscriptions we don’t use or even need. The cancellation challenge is about canceling unwanted services.
Go through your phone’s settings, streaming apps, bank credit statements, or even online shopping apps to discover all recurring deductions. If you don’t have the courage to do a manual cancellation, you can use apps like Rocket Money or AskTrim.
12. Nickel-Based Savings Challenge
The Nickel-based challenges focus on starting with as little as $0.05 (a nickel) and increasing your savings over time. This challenge is ideal if you want to save consistently without feeling overwhelmed.
The daily nickel challenge, nickel jar challenge, nickel round-up challenge, and 365-day nickel saving challenge are some common types of Nickel-based saving challenges. Each of these challenges is designed to ultimately help you grow your savings at a much more suitable pace.
13. 100 Envelop Challenge
The envelop challenge is a fun and effective way to save money by using an envelope. Wondering how it works? Label 100 envelopes with numbers 1 to 100. Each day, pick an envelope at random and save the amount written on it.
For example, if you pick envelope #6, it means you will transfer $6 to your savings account for that day.
How To Stay Motivated During A New Year Money-Saving Challenge
Staying motivated can be tough. Most people often start a challenge and give up a few weeks into the challenge. But here are some useful tips to help you stay motivated and achieve your savings goal.
1. Start With A Short-Term Goal
If saving feels overwhelming, it is best to consider starting with a short-term goal or with a small amount. Begin with manageable goals to build momentum.
2. Involve Friends And Family For Accountability
It’s common to see people start a challenge and quit along the way. To avoid this, find an accountability buddy. Share your challenge with a close friend or family member for added accountability.
3. Remind Yourself Of The “Why”
As you progress on your journey, it is important to always remind yourself of why you’re saving.
Take a moment to reflect on why you started the challenge in the first place. It could be to treat yourself to a dream vacation, pay off debt, afford college fees, or build an emergency fund. Write down your goal and remind yourself of it whenever you feel unmotivated to continue.
4. Celebrate Your Small Wins
It’s okay to reward yourself after hitting a milestone. A small treat or fun activity can help you stay motivated to take on further milestones.
Common Mistakes To Avoid During Money Saving Challenges
While saving money is a great feat to achieve, there are a few mistakes that can harm your progress. By avoiding them, you will make the most of your new year savings challenge:
1. Setting Unrealistic Goals
There is absolutely nothing wrong with setting high targets for yourself. However, this can lead to early frustration or burnout. It is advisable to start with a goal that is both challenging and doable, especially if you are new to saving.
2. Starting A Saving Challenge Without A Clear Budget
Diving into a savings challenge without any budget or spare money is one mistake you need to avoid. Create a budget that caters to your essential expenditures, discretionary spending, and savings as well.
3. Failing To Track Progress
It is easy to lose momentum or even forget about the challenge if you don’t keep tabs on your savings. With tools like Mint, a simple spreadsheet or even a physical jar can help you monitor your savings. Seeing progress is a powerful motivator.
4. Not Planning For Emergencies
Life happens, and unexpected expenses can pop up at any time. For example, a medical bill, a car repair, or a last-minute purchase. If you do not have an emergency fund set aside, these surprises can affect your savings. And most cases, you might struggle to regain momentum.
To avoid this mistake, set aside a small amount of money before you begin any savings challenge.
5. Not Automating Your Savings
If you manually transfer money to your savings account, there are chances that you might skip some days. Automating your savings is one way to ensure consistency.
Set up automatic transfer through your account manager or savings app to deduct a set amount from on an agreed date. This way, you’re growing your savings without even thinking about it.
Final Thoughts On New Year Money-Saving Challenge
Starting a new year savings challenge is more than just a financial exercise. It’s a way to prove to yourself that you can prioritize savings, develop new spending habits, and take control of your finances.
It is important to note that you can combine two or more challenges to increase your savings. Also, embarking on a new year money-saving challenge requires you to start spending less and living on a budget.
Finally, do not focus solely on a challenge. You can try out other financial strategies to help you achieve your savings goals for the year.
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