By now, many of you may have seen the 52 Week Money Challenge floating around the Internet. The idea is simple – build a large stash of savings by the end of the year through weekly deposits that increase $1/week. On Week 1, you contribute $1. On Week 2 you contribute $2. So on and so forth.
I think the challenge is a great idea. According to a study by the University of Scranton, spending less and saving more was the third most popular resolution for 2014. Having a measurable plan with specific action items is a great way to ensure that you stick to your resolution. Also, by gradually increasing the amounts you save each week, you won’t feel such a big impact on your budget, making you less likely to feel discouraged.
Here are a few tips that might help you make the most out of this year-long challenge.
1) Play with the increments. For those who are just starting to stash away funds or might be on a tight budget, this current plan is challenge enough. But if you are looking to save more, play with your budget and develop a plan of your own. If you can handle higher denominations and steeper increases, go for it! If this was supposed to be easy, it wouldn’t be called a challenge.
2) Shop around for an account.I wouldn’t recommend putting your money in a jar or even your primary savings account. For one, you might be tempted to spend what you’ve saved if the cash is at your fingertips. Moreover, a high yield savings account will help you accrue interest on what you save. Currently, Barclays US is offering 0.90% APY on their online savings account with no minimum deposit. That’s much higher than the standard 0.01% APY offered on most standard savings accounts from major banking institutions. Check with your current banking institutions for new savings accounts or look at Bankrate.com to find the right account for your savings needs. If your financial goals are for the long term, this savings products crash course can help you identify the right product for your financial goals.
3) Set a reminder. It’s easy to stick to the money challenge in January when you have $3 to spare. But to hold fast to your resolution weeks from now when the increments are higher, you may need a motivating nudge. Set weekly reminders for the rest of the year. You may also want to include the increments you owe each week and a few words of encouragement.
For those of you that are doing the challenge, I wish you the best of luck. I’ll be doing the challenge too, so feel free to leave a comment about your resolution below or commiserate with me on Twitter.
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