Back in 1561, an Italian playwright, Anton Francesco Grazzini, wrote a comedy that included the phrase, “save for a rainy day.” While he might get credit for the wording, the idea is as old as time — prepare for challenges before they arrive.
We’ve seen our share of rainy days in the last few years. Inflation has made it more expensive to buy everything from a used car to a carton of eggs. Rent prices have climbed as well, making it difficult for renters to find ways to save. However, saving money now can help you feel more prepared for future rainy days, so it’s worth the effort. If you want to start saving but are struggling to do so, try making it a challenge!
Benefits of Saving Money
According to a January 2023 report by Lending Club, roughly 60 percent of adults in the U.S. live paycheck to paycheck. This means that more than half of us wouldn’t be prepared in the case of an emergency. Not having some money set aside can be a source of stress, especially when something unexpected comes up.
Benefits of saving money include:
1. Increased Financial Security. The most obvious benefit of saving money is the increased financial security it brings. By setting aside money and putting it in a separate account, you can protect yourself from unexpected bills and financial setbacks.
2. Help with big purchases. Whenever you make a major purchase, it helps to have saved up for it beforehand. Perhaps it’s your first apartment and you want to get rid of the second-hand furniture you inherited from family. Or maybe you want to move to a new city and you need to save up for relocation costs. Having money in the bank makes major expenses more manageable.
3. Retirement. Saving consistently can help you build a retirement fund. Most people will need additional funds to live comfortably in their retirement years, and saving up in advance can provide you with that security.
4. Emergency backup. The unexpected happens. Whether it’s a family emergency, a car repair, medical expenses, or a job loss, a rainy-day fund can help you out in a pinch.
Knowing why it's important to save is the easy part. The actual saving part is more difficult. So, why not make it a challenge?
Popular Savings Challenges
They’re all the rage on social media, but what is a savings challenge, exactly? It’s a way to make a tedious task interesting. Let’s face it: spending money can be fun. Saving it? Not so much. That’s where a savings challenge comes in! You’re challenging yourself to save for a short period of time — one month, six months, or a year. Setting a time frame has several benefits, including not making it feel as though you’ll be on a tight budget forever, and having a tangible goal within reach. Here are three popular savings challenges to consider.
The $1,000 Savings Challenge
For this challenge, determine how much you can save per week. Some popular challenges include saving $20 per week for 52 weeks or $100 a week for 10 weeks. Even if you can only save $5 per week, you can watch your savings grow over time. Create a grid based on how much you think you can save. The spaces on the grid should total $1,000, so if you’re going to save $20 per week, you’ll want 52 spaces. Every time you put $20 in savings, mark off a space on the grid.
The Bi-Weekly Savings Challenge
Many of us get paid every two weeks, so putting something aside every week can get tricky. Luckily, there’s the bi-weekly savings challenge to make things a little easier. This challenge involves putting money away every two weeks, for the next 26 paychecks. The amount you save increases incrementally with each paycheck, so if you start out saving $5, then you’ll set aside $10 from your next check, $15 from the third, and so on. Make sure you start with an amount you’re comfortable with so you don’t abandon the challenge as the amount gets higher. If you start with $5, you’ll end up with $1,755 in your savings after one year.
The No Spend Challenge
This budget challenge is exactly what it sounds like. Choose a time frame (it can be a few days, a week, or even a month) and don’t spend any money during that time, except for the absolute necessities like bills, your rent, or gas for your car. While you want to challenge yourself, set yourself up for success by starting off small. For example, go the weekend. If that’s successful, try it for a week. While it might be challenging at first, the extra money in your bank account could motivate you to continue, which will help you build smarter spending habits over time.
The Weather Wednesday Challenge
Here’s a fun challenge: Every Wednesday, you put the same amount of money in your savings account as the temperature is outside. So, if it’s 90 degrees outside, you transfer $90 to your savings account. It it’s 40 degrees, you transfer $40, and so on throughout the year. If you live in a place with temperature extremes, this challenge could get tricky.
The Keep the Change Challenge
This challenge is similar to the “rounding up” programs offered by many banks, where they round up your purchase to the nearest dollar and put the change in your savings account. This is a slower way to save, but it’s very easy. If your bank doesn’t offer this type of program, simply round up yourself and transfer that amount to savings. For example, if you go grocery shopping and spend $152.50, round the amount up to $153 and put the extra change in your savings account.
The Roll the Dice Challenge
It can be actual dice or virtual (Alexa, roll the dice!). Whatever number comes up, that’s what you put into your savings. You can do this daily or weekly, and if you’re lucky (unlucky?) enough to roll high numbers, you could end up with a hefty amount in your savings by the end of the year.
The Swear Jar
Loved by grandmothers everywhere, you may be very familiar with this challenge. Every time you (or anyone in your household) swears, a predetermined amount of money goes into the “swear jar.” Depending on the price per swear word (and the amount of swearing you do), you could end up with a good amount for your savings account.
This challenge can be modified to suit whatever your vice may be. Perhaps instead of swearing less, you want to go to the gym more often. Every time you skip your workout, you have to put money in the jar. Or, if you’re trying to give up smoking or another habit, every time you indulge you put a set amount in the jar.
The No Dining Out Challenge
According to Lending Tree, the average U.S. household spends $2,667 a year dining out. Challenge yourself to prepare all your meals at home. If you typically stop for coffee every morning, grab lunch out during work, and order take-out instead of cooking, you’ll now prepare your coffee at home and take it with you, brown bag your lunch, and start making dinner at home. Take the money you save each week and put it directly into savings — you won’t miss it since you usually spend it on food anyway.
Even if you don’t try one of the above challenges, start tracking your money to see what you spend and where. Look for places where you can save, even if it’s just canceling unused subscriptions. Small amounts add up, so don’t overlook even the tiniest chances to save. You'll be glad you saved for a rainy day!
