New Years means new resolutions and we are pretty certain that most people have monetary management on their list. After all, the urge to buy random items we see through shop windows is at an all time high (those smart shopkeepers playing with our minds!). Saving that valuable paper or virtual paper (Bitcoin?!) is an ever increasing trend and being honest, it ain’t easy saving. Well, let us introduce you to the 52 week savings challenge. A simple personal finance challenge to get you on the economic path to goodies, sustainment and self-satisfaction.
What is the 52 week savings challenge?
The 52 week savings challenge is a neat little personal strategy for saving large through small amounts. The overall savings amount is a resultant of consistent efforts and gradual growth over 52 weeks. The concept is utterly simple, start with a small amount and put it in savings in week one. The second week, increment the amount by $1 and keep it going for the entirety of the 52 weeks. For example, if we started with addings $1 on week one, we would add $2 on the second and by week 52 we should be putting in $52. Like we said, UTTERLY SIMPLE!
When is the best time to start a money saving challenge?
A maximum number of people start money saving challenges at the beginning of the new year as it implies new beginnings and make for a rather easy way to keep track of timelines. One can always start in the middle of the year as well with the help of scheduling and planning apps. After all, there is never a good time to start saving up on funds.
A personal tip is to start at the beginning of any week or month to make it easier on you to work on the whole challenge, a fresh start is a win in anyone's books. You can always take the help of a family member or friend to join you in the process where you can keep accountability and provide motivation for each other as you make headway into this venture.
Types of the 52 week money challenge
Everything has variety to cater for a variety of the people and the 52 week savings challenge comes included. With 3 variations of the challenge, you can choose what makes you comfortable and will be most effective according to you. Bear in mind consistency is key to the 52 week savings challenge. Now that we have that sorted, let's dive into the 3 types.
Forward money challenge
The most basic and common approach, the 52 week savings challenge of the forward type implies incrementing the amount on a weekly basis. You start with a certain amount (try $1 if you are completely new to the idea) and increase the amount by $1 every week. If you want to know why this basic type is such a popular idea, think about the fact that starting with $1 and increasing it till $52 at the end of the challenge gives you $1,378 at the end. QUITE A GAIN!
Why is this method good: It's the ideal way for students trying to start money building habits to get into the game as it slowly forms up a habit over a period of time and as funds increase so does your confidence. Easy to start, and with practice, a difficult ending becomes child's play.
Reverse money challenge
Time to turn it around and give the challenge a twist (Shutter Island? Best plot twist ever!). Instead of starting with (let’s say) $1 and incrementing, how about we start with $52 and subtract a dollar from the weekly investment. The results are still the same, you end up with $1,378 on the last week.
Why is this method good: it’s rather simple, its human tendency to start strong and finish slow as we get tired over time and lose focus. Moreover, it allows you to invest more when you are fresh and comes down to small amounts towards the end, letting you focus on other things as well.
Constant money challenge
By far one of the easiest yet difficult methods, the 52 weeks savings challenge the constant way implies investing a set amount of money every week to have the same effect as the previous two methods. For example, if you put in $26.50 each week, you end up with $1,378 at the end of 52 weeks.
Why is this method good: it becomes super convenient as you can set up automatic transfers for each week and allows you to focus on other work while the challenge pretty much becomes a no-brainer.
Tips to free up funds
Embarking on any endeavor requires one to be prepared, in this case, having adequate income or funds to carry out the challenge. So how do we become successful during the 52 week savings challenge?
Build into your budget
The basic step to starting money saving is budgeting. Budgeting is essentially a plan for your money and how each amount needs to be utilized. A savings challenge gives you an actionable plan to implement into your budgeting plans instead of just winging it with just plain old money plans. You can alter your budget and allocation of funds for the challenge on the basis of how you are paid, be it , weekly, bi-weekly or monthly.
Sell your stock
No, wait, we don’t mean your literal stocks. We are talking about the multiple things in our homes that exist in the attic or that figurine of Harry Potter with a gun (game on Voldemort!). Help yourself declutter and sell the things you do not need and not only free up space in your home but also gather additional amounts of funds for your 52 week savings challenge.
Cut back on expenses
We know sse have many expenses that are not really required and it becomes a hassle as little amounts make a large sum (the whole point of the 52 week savings challenge right). Do a little self analysis and find out where you are spending that is not essential, could be that gym membership we are unable to attend due to busy schedules and what not. Cut back a little on such expenses and you will find yourself in a much more comfortable place. Rather good way to also save additional funds right?
How to manage your money from the 52 week savings challenge?
To the fundamentals of the 52 week savings challenge, where do you put this money that you invest in the challenge every week? The top advice is to open a new savings account with a high interest rate to keep growing your savings. You can also put the funds into a fixed deposit to garner higher interest rates and reap the benefits. Even if you are opening a new account and keep transferring every week, make sure you do not get credit or debit cards for the same account (we don't want to spend on accident now do we?).
What to do with the money from the challenge?
Congrats, you have made it till the end of the challenge and have at least $1,378 in your new savings account, so where do we spend it now?! (Easy there)
1. The challenge is perfect for all goals, be it short, medium or long term goals. Want to fund a move, furniture purchase or something along those lines? Want to fund a trip in the near future or even work your way on your house’s downpayment? The 52 week savings challenge caters for it all.
2. *Whooping sirens* The challenge goes a long way to set aside an emergency fund for you for a rainy day. It could range anywhere from a doctor’s visit, emergency travel or even the previously mentioned parody Harry Potter with a gun figurine we all want.
3. Now that we bought the figurine, we have to understand the consequences, debt! The 52 week savings challenge provides a steady income over a span of, well 52 weeks that could slowly but surely help make headway in clearing your debts or student loans.
4. It's time to grow, grow and grow, you can even use these funds to explore the world of stock marketing and maybe be the next ‘Wolf of Wall Street’. Trial and error is the name of the game after all.
Benefits of the 52 week savings challenge
I am pretty sure we can see the benefits of the challenge already, but let’s make it clear as day why we should be Barney Stinson with the 52 week savings challenge.
Consistent saving
Keep something for 52 weeks and it’s bound to become a habit and when it comes to money, it's a brilliant habit. Stay secured for the future as you become more economical and sustainable. Eventually your personal finances will be a benchmark example.
Get Adventurous
Overcoming any challenge instills in us a confidence to try new things and broaden our horizons. Any good challenge just makes us take a leap in the right direction.
So, what are you waiting for, get out there and try your version of the 52 week savings challenge for a better tomorrow. Grow economically, mentally, and form new habits. Your time is now, little steps at a time and you are headed for good times. LET'S GO!
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