Beginning a money saving challenge is a great way to kickstart any of your financial goals. Whether your emergency fund needs pumped up, it’s vacation time, or one of the kids needs braces, having a padded savings fund is key to avoiding any new debt.
Can you imagine coming back from a weeklong vacation in Maui? Now, can you imagine coming back from a weeklong vacation in Maui…without credit card debt?
Have you ever been able to take a vacation without having to throw it all on a credit card? If not, do you have any idea how much you’ve paid in interest for that vacation, long after your tan (or burn, if you’re me) is gone?
This is why it’s important to set money savings goals. Without them, we’d be paying for those vacations (or braces, or emergencies) ten times over before everthing’s said and done. Having savings goals means never having to say, “Charge it!”
The best thing you can do is learn how to save money the right way, so that you can break the cycle of debt once and for all. Next, I’ll cover four types of money saving challenges and how each can help you acheive your financial goals.
The Four Major Types of Money Savings Challenges
In my research, I’ve found that there are four major types of money saving challenges. Some are more passive ways to save that will slowly build up and that change will be less likely to be miss.
Others are much more aggressive savings strategies that require being very proactive with your money. While these are more difficult, they also reap a much bigger reward.
Money Savings Challenge #1: Save by Type of Cash or a Percentage of Your Income
These types of challenges are smaller and tend to be easier. A popular one is to put aside 10% of your income every paycheck, prior to paying your bills. This is often referred to as “paying yourself first”.
If you use and spend cash, there are a lot that involve saving different types of currency, such as saving all your $5 bills for the year. Keeping all your dimes. These savings methods are easy to do and the outcome can vary wildly depending upon what type of change you receive throughout the year.
Some additional examples include:
- Save any $5 bills received
- Save all of your dimes in a two liter soda bottle, which equals approximately $700
- A year long penny challenge, in which you save one penny on day one, two pennies on day two, etc. You’ll have saved $667.95 at the end of the year.
- Automatically move 10% of every paycheck into savings before you pay any bills
And so on. You get the drift. There’s a ton of different money saving challenges on Pinterest for easy, small money challenges such as these. Check out 37 Easy Money Challenges to Help Smash your Financial Goals for even more ideas.
Money Savings Challenge #2: Save by Using a Financial App
There are several great financial apps that can help you round up your spare change on purchases to put money aside. Heck, even some credit card companies offer these services as well.
The key is that once again you’re passively saving by pushing very small amounts into an account without realizing they’re gone. You’re not feeling the sting, since it’s always less then 5 or 6 dollars.
Acorns is a very well known and trusted financial app that can help you easily shuffle your extra cash around. Spare change can be rounded up from purchases and recurring investments set up. You can easily set up an IRA and Acorns handles all the investing and rebalancing of your funds.
Even better, you can earn as you shop. Acorns has partnered with over 200 Found Money partners that will automatically invest in your Acorns account every time you shop there. It really doesn’t get much easier than that! Learn more about the Acorns investing app here.
Money Savings Challenge #3: Do a No Spend Challenge
Here’s where the challenges stop being passive, and start to become very hands on. A no spend challenge is a period of time – say a week, two or a month – in which you proactively decide not to spend money.
For your no spend challenge, you set up rules and exceptions, such as you can purchase gas, but not groceries and much use this time to clean out the fridge and pantry.
At the end of the challenge, all of the money you would have spent goes into your savings. It’s another quick way to jumpstart your savings or create breathing room when you’re living paycheck to paycheck.
For more no spend challenge ideas, check out:
- 10 Simple Rules for a No Spend Challenge
- No Spend Challenge Printable Worksheets
- 50 Free Things to Do on a No Spend Weekend
Money Savings Challenge #4: Creating an Intentional Money Savings Challenge
What do I mean by an intentional money savings challenge? I mean that you set specifics and define a goal.
Do you want to do a 30 day money saving challenge? Is it biweekly? Is your goal to save $5,000 or $10,000 in 52 weeks? Or is that too long, and you prefer a save $5,000 in 26 weeks?
Whether you want to save $10 or $10,000, you need to set solid, achievable goals. Without details like an end date or an amount to strive for, that money can easily blow away and get spent on small, throw away items that aren’t helping you reach the next step.
This money saving challenge is the most aggressive of the four. But with the hard work and sweat of pushing yourself, you earn the greatest reward.
Money Saving Challenge Printables
I’ve created some free money saving challenge printables to help you not only plan your savings challenge, but to help you execute it.
While these money saving challenge printables are geared towards helping you save $1,000 in 12 weeks, it can easily be changed to match any time period or amount of savings. Some other popular money saving challenges are:
- 52 week money saving challenge, saving anywhere from $3,000 to $10,000
- 26 week money saving challenge, usually geared towards saving $5,000
- 90 day / 3 month / 12 weeks savings challenge to save $1,000 – $3,000
Once again, this is all dependent on what your needs are and what your timeline is like. Download your free money saving challenge printables here:
A Step-By-Step Walkthrough of a 3 Month / $1,000 Money Saving Challenge
The first step to breaking the debt cycle is to build up a $1000 emergency fund. It’s also very important to learn to cash flow, or save for, other expenses such as vacations, medical costs, or car repairs before you need it.
While your personal money saving goals will vary, we’ll be using a 12 week, $1,000 saving example to walk through setting up your challenge.
Why You Need to Have at Least $1,000 Savings
We can plan all we want, but there are always unexpected expenses that pop up. Whether it’s medical, a wedding we’ve been invited to, or car issues, you can bet they’re going to show up at the worst times.
It’s not a matter of IF financial roadbumps come up, it’s a matter of WHEN.
The easiest way to stay out of debt when these roadblocks hit is to have some savings in place. I suggest having a $1000 emergency fund. $1000 is enough to cover your deductible for house issues as well as most medical issues.
Getting Started Saving Money
Now that you have your printables to help you learn how to save money, it’s time to get started saving!
Step 1: Find your motivation to Save.
It’s important to know your motivations for saving. Is your ultimate goal to be debt free, but you’re lacking an emergency fund? Do you want to take your family on vacation this year? Are you expecting a baby, or think you’ll need dental work?
No matter what the reason, take the time to figure out why you’re doing this. It’ll help you to stay motivated when things get tough.
Visual reminders are great as well – so make sure to use the saving tracker, as well as pictures of what you’re working toward to help with motivation.
Without figuring out why you’re doing the challenge, you’re much more likely to fall off the financial wagon and whip out that credit card at the next big sale you walk past.
Having a specific goal, amount and timeline really help to motivate and create drive. Which in turns makes it much, much more likely that you hit your financial target!
Step 2: Set Your SMART Goal.
As you decide on what you’d like your goal to be, remember to use the SMART method:
- Action Oriented
- Time Bound
To build a $1000 savings in 12 weeks, you’ll need to save $83 a week. That’s just shy of $12 a day.
Let’s create an example goal. Rather than, I want to save $1000, let’s make it SMART:
I want to create a $1000 emergency fund by saving $83 a week for the next 12 weeks.
This goal is very specific: it has a measurement of time and debt amount, it includes an action, and it’s realistic and has a time limit.
You’re much more likely to be successful at saving $1000 if you break your goals down into smaller sprints, such as one or two weeks chunks, or even a month.
Decide how you want to break your savings up and write it down on your worksheet.
Step 3: Track Your Current Spending.
In order to get started saving you need to know where your money is currently going.
I know – a lot of people think tracking spending is a bore and a snore. I get it. But unless you can see where the money is most likely to leak out of your account (I’m looking at you, coffeeshops!), then you can stop the flow.
Saving money is going to take identifying needs and wants, and seeing where you can trim back.
If you don’t already use an expenses tracking software like ynab.com or mint.com, now’s a great time to start. It can help you look back over the past 2 – 3 months and gauge your spending.
Step 4: Create a budget.
Now that you see where your money is going, you need to make some decisions on where to make cuts. This is where a budget comes in handy. It’s an easy way to play with the numbers and see where it makes the most sense to trim your spending.
I can recommend this zero based budget that we’ve used to pay off more than $26,619+ in the past 19 months!
You want to trim your spending so that you’re able to hit that SMART goal that you created in the previous step. Next, I’ll give you some ideas on how to do just that.
The Best Ways to save Money
Now that you have your goal and budget in hand, this is where you need to get creative! There are only two ways to find money:
Spend less or earn more.
Sounds simple, I know, but it’s not always easy to keep consistent with it. I’ve written a lot of in-depth articles about each. I prefer to do a little of both, so that I don’t feel like I’m being deprived by cutting too much, and I’m still able to meet my SMART financial goals.
How to Trim Expenses:
- How we saved $240 in minutes with Trim
- 13 Quick & Easy Ways to Save Money that Freed Up $700 a Month!
- How to Quickly Save More Money: 10 Simple Rules for a No Spend Challenge
- How to Easily Triple Stacking your Savings on ANY Purchase!
- How to Stop Overspending Immediately with One Easy Trick
- 37 Easy Money Challenges to Help Smash Your Financial Goals
- Beginner Couponing Mistakes and How to Avoid Them
- How to Stop Eating Out: Super Simple Ways to Save Your Food Budget
How to Earn More Money:
- How to Make Money Fast: Finding the Perfect Side Hustle
- The Ultimate List of the Best Side Hustles that Aren’t MLMs
- How to Make Money Online: 50+ Brilliant Ways to Make Money Before Christmas
What to Do with Your Savings
Now that you’ve started your savings, how do you keep from accidentally spending it?
The best approach is to create a separate savings account. This new account can be linked to your regular accounts, but I really suggest keeping them in a place where it’s not as easy to access.
I also highly recommend automating the transfers to the savings account, so that you don’t forget and spend it.
For example, we have a savings account for my quarterly tax payments. Our checking is with a local bank, and this particular savings account is with CapitalOne. The monthly payments are automated so that they get taken out of checking at the beginning of every month.
If I need to access that money, it takes a couple of days to transfer back to my checking. It’s easy to set it and forget it – which means there’s no chance of accidentally spending it!
I highly recommend setting up your budget at the beginning of the month and immediately moving whatever extra you have into savings. If you don’t pay yourself first by putting your savings into a separate account, it will get bites taken out of it until it’s half of what it should be.
I’ve Hit my Savings Goal – Now What?
Saving for 12 weeks is long enough to have created a new “normal” for yourself and for your spending. You’ve adjusted to the new budget, and you’ve hit your goal. Now what?
The absolute best idea is to keep riding your momentum and continue your money saving challenge! Either keep saving, or begin paying off your debt, depending on where you’re at on the path to financial freedom.
Saving up $1000 is pretty easy if you have a plan and break it into manageable chunks. These tips to save money and printable worksheets will help to get your savings on schedule. Once you’re on track, you’ll find it easier every day to keep going until you hit your goal!
Bonus: When Should I use my Emergency Fund?
One of the biggest questions I get is “what’s the difference between an emergency fund and sinking funds?” (Don’t worry – I had no idea what sinking funds were a couple of years ago!)
Knowing the difference between sinking funds and an emergency fund will help you to understand when it’s actually a legit reason to break into your emergency fund.
The short explanation is that an emergency fund is for actual emergencies, like medical issues or an unscheduled car issue. Basically, anything you can’t really plan ahead for.
Sinking funds are a savings account that’s for those irregular expenses that you know are coming: yearly HOA fees, quarterly tax payments, or your car registration. Items that don’t happen monthly, but you know they’re coming.
Once you’ve saved up your emergency fund, begin to save your sinking funds next so you aren’t spending your emergency fund by accident. Learn more about emergency funds versus sinking funds, and why you need both.
What amount and length of time are you thinking of using for your money saving challenge? Are you going big and tackling a 52 week money challenge, or starting out a bit smaller? Let me know in the comments below!