How can the 52-Week Money Challenge increase your savings

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52 week money challenge

The Kylie Jenner Challenge. The Tide Pod Challenge. The Duct Tape Challenge. By now, we are all too familiar with the onslaught of social media challenges that may leave you injured, disfigured, or at least regretful. Amongst the absurdities, a few gems have emerged, like the 52 week money challenge.  

The 52 week money challenge is a pain-free personal finance plan designed to get us in the habit of flexing our saving muscles. The basic premise of the 52 week money saving challenge is to get into the habit of saving a small sum each week. According to the challenge rules, you increase that sum you save each week, so that your savings pattern has a compounding effect over the course of the year. 

In the original challenge, you begin by saving the amount of money designated by the week of the year. In week 1, you set aside $1.00. In week 2, you save $2.00, and so on. Following this pattern, your savings should amount to a whopping $1,378.00 by New Year’s Eve.

Who wouldn’t like to ring in the New Year with nearly $1,400 in savings? 

Tweak the 52-Week Money Challenge

While the original 52 week money challenge in and of itself is a great savings trick, consider our suggestions to tweak it and make it even better.

Adjust the initial investment amount

If you think in terms of the monthly deposit that the 52 week money challenge requires, weeks 49-52 represent the largest investment.

Scale your starting amount so that your largest deposit during that time frame will be manageable. If $200 is an easy amount, maybe you can consider bumping up your initial investment to $2 or even more.

If depositing $200 at year’s end doesn’t seem plausible, try starting off with 50¢ or just a nickel or a dime the first week, and work up from there. 

Deposit every four weeks

One drawback to the 52 money challenge is the thought and willpower required to make it work. Willpower – especially when it comes to finances – is a finite resource. The act of remembering to save and making the decision to save instead of splurge every single week can set us up for failure.

Keeping this in mind, it can be helpful to deposit the value of the next four weeks at the beginning of each month (following the Pay Yourself First principle). This will allow you to remove some of the memory and willpower barriers while simultaneously ensuring that you won’t unwittingly run out of money before the last weeks of each month.

Start the 52 week money challenge backwards

December tends to be a big spending month for many folks. As such, shelling out $200 or so for your savings fund may not be ideal at that time of year.

To avoid that pitfall right before the finale of your 52 week money challenge bonanza, consider starting backwards. Start off the New Year making the largest investment, and work backwards from there. Your New Year’s positivity and Aunt Frida’s holiday money might come in handy for easing the pain of that large initial investment, and by starting off backwards you will set yourself up to make a smaller savings donation at year’s end.

Plus, by starting off backwards, your money will have more time to accrue interest in your savings account throughout the year. Seeing a larger initial savings sum might be encouraging, too. 

Consider investing

The 52 week money challenge is a great savings tool. However, you can make it even more powerful by activating the power of those savings by investing.

While only you and a trusted financial advisor can determine the best investments for you, there are a range of options that you can consider to maximally activate the power of your savings. High yield savings accounts, certificate of deposits, peer to peer lending, and investment apps like FlexInvest can all help you make extra money off of your savings.

The 52 week money challenge is an excellent personal finance tool to train your savings habits. However, by considering a few of our ideas to tweak it, you can make it even more effective and efficient. Start flexing your savings muscles for a fitter financial future! 

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