New Year 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 to be honest, it isn’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 result 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. In the second week, increment the amount by $1 and keep it going for the entirety of the 52 weeks. For example, if we started by adding $1 on week one, we would add $2 on the second, and by week 52, we should be putting in $52. As we said, UTTERLY SIMPLE!
When is the best time to start the 52-week money-saving challenge?
- Many people initiate a 52-week savings challenge at the start of the new year for symbolic new beginnings and easy timeline tracking.
- Starting in the middle of the year is also possible with the aid of scheduling and planning apps.
- There is never a bad time to commence saving funds.
- A personal tip is to begin at the start of the 52-week money challenge any week or month for a fresh and motivating start.
- Involving a family member or friend can provide accountability and mutual motivation throughout the 52-week money challenge.
Types of the 52-week money challenge
Everything has a variety to cater to a variety of people, and the 52-week savings challenge comes included. With three variations of the challenge, you can choose what makes you comfortable and will be most effective for you. Bear in mind that consistency is key to the 52-week savings challenge. Now that we have that sorted let's dive into the 3 types.
1. 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 52-week money challenge is such a popular idea, think about the fact that starting with $1 and increasing it to $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 a habit over a while, and as funds increase, so does your confidence. Easy to start, and with practice, a difficult ending becomes child's play.
2. Reverse money challenge
Time to turn it around and give the 52-week money 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 in the last week. Why is this method good: it’s rather simple; it is the 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.
3. Constant money challenge
By far one of the easiest yet most difficult methods, the 52-week 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 52-week money challenge pretty much becomes a no-brainer.
Tips to free up funds
Embarking on any endeavour requires one to be prepared, in this case, having adequate income or funds to carry out the 52-week money challenge. So, how do we become successful during the 52-week savings challenge?
1. 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 utilised. 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.
2. 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.
3. Cut back on expenses
We know they 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; it could be that gym membership we are unable to attend due to busy schedules and whatnot. Cut back a little on such expenses, and you will find yourself in a much more comfortable place. Rather a 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 student bank 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 to 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)
- The 52-week savings challenge suits all goals—short, medium, or long-term.
- It covers various needs, from funding a move or buying furniture to saving for a trip or a house down payment.
- The challenge helps build an emergency fund, covering unexpected expenses like doctor visits or quirky purchases.
- Utilise student services for discounts, maximising the benefits of your 52-week savings challenge.
- The steady income provided by the challenge over 52 weeks can make progress in clearing debts or student loans.
- Use the funds to explore stock markets and venture into financial growth.
- Embrace trial and error in the quest for financial success.
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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 a day why we should be Barney Stinson with the 52-week savings challenge.
1. Consistent saving
If you keep something for 52 weeks, it’s bound to become a habit—and when it comes to money, it's a brilliant habit. Stay secure for the future as you become more economical and sustainable. Eventually, your finances will be a benchmark example.
2. Get Adventurous
Overcoming any challenge instils in us the confidence to try new things and broaden our horizons. Any good challenge just makes us take a leap in the right direction.
3. Keep a Track of Financial Spendings
Keeping track of financial spending helps maintain discipline towards financial goals, which helps avoiding uncertain financial crises.
4. Understanding Spending Habits
Understanding spending habits can ensure stability and stress free life. Learning the management of finance from a young age helps lead a discipline lifestyle.
5. Personaliseable According to Goal
Best part of 52-week financial challenge is that you can easily set your financial goals and plan accordingly. Building a habit initiates long term goal achievement faster so, be consistent and dream big.
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 and mentally, and form new habits. Your time is now, a few steps at a time, and you are headed for good times. LET'S GO! You can also watch our webstory on tips to Invest as a student to know more. You can also go through these tips on how to get out of bad debts in our webstory.
