Published in: Banks | Sept. 8, 2019
Save $1,378 or More by Completing These 7 Money Challenges
Put yourself up to these thrifty tests and watch your savings account grow.
Managing finances properly takes planning and commitment, but sometimes we need an extra push to really cut costs. If you’re drowning in debt or struggling with living paycheck to paycheck, you might be in need of a drastic change.
Here are some of the best money challenges and budgeting methods to jump-start your budget and boost your savings account.
1. No-spend month
Saving potential: All of your disposable income
If you need to dramatically reduce your spending, challenge yourself to a no-spend month. For one month, you’ll commit to only spending money on necessities like rent, utilities, and gas. You’re not allowed to eat out, go to the movies, or shop for clothes. You’ll also want to set a spending limit for necessary expenses like groceries that typically fluctuate.
If you want to go on a date night or do something fun with your weekend, you’ll have to look for free activities in your area. Luckily, you’re likely to find an abundance of options, such as free community events. If you get creative, a no-spend month can actually help you find new hobbies and meet new people, while also introducing you to new ways to save money, like utilizing the resources at your local library or hosting a clothing swap.
2. 52-week saving challenge
Saving potential: $1,378
There are many versions of this challenge, but the most straightforward version is to match each week’s savings with the number of the week. So for week one, you put away $1. For week two, you save $2, and then $3 for week three, and so on. This continues until you hit $52 on week 52, which is one year later.
If you stay on track, you’ll save a total of $1,378 by the end of the year. By setting incremental goals for yourself and saving increasing sums of money, you can ease your way into a new budget.
3. Envelope budgeting
Saving potential: Varies
The envelope budgeting system is a very effective way to change your money mindset. With envelope budgeting, you’ll use cash to control your discretionary spending -- anything that is purchased after you’ve paid for all bills and necessities.
Decide on a weekly or monthly savings goal and transfer that money to your savings account. Whatever is left is your spending money, which you’ll want in cash. Use envelopes to divvy up that cash based on budget categories, such as groceries, entertainment, and gas. Leave your debit and credit cards at home, and only take the envelopes you need for wherever you’re going. Once an envelope runs out of cash, you stop spending money on that category for the rest of the month.
4. Meal prepping
Saving potential: $3,000+
By preparing some or all of your meals and snacks for the upcoming week all at once, meal prepping can not only save you time, but also save you money. You’ll need to plan out your week’s menu and then purchase groceries accordingly.
This will save you money on dining out -- which costs the average American over $3,000 a year -- as well as saving money on groceries by avoiding food waste and maximizing what you have on hand.
5. Negotiation spree
Saving potential: Varies
Go on a negotiation spree and negotiate better terms on all your monthly bills to save you money. Call your credit card company and ask for a lower interest rate based on your current credit and payment history. Contact your cable and internet providers and let them know you are considering switching providers and are interested in any available discounts to retain your business. The same can also be done for your car insurance and any other fixed costs where competitors may be waiting to earn your business.
The key to successful negotiating is to research and leverage competitor pricing and to be prepared to walk away if they aren’t willing to meet you in the middle. If you hit a wall with your initial contact and they aren’t willing to price match their competitors, don’t simply take no for an answer. Ask to speak with someone in their retention or cancelation department.
6. Cut a category from your budget
Saving potential: $500+ per month
The fastest way to see a huge impact on your finances is to cut out an entire category from your budget rather than making small changes in every category.
Consider ditching your car payment by taking public transportation. Instead of paying for cable, use an online streaming service like Netflix or Hulu. The average cost of rent for an apartment is $1,166 for a one-bedroom and $1,332 for a two-bedroom, meaning you can save $500 by moving into a two-bedroom and splitting rent with a roommate. Change your lifestyle by nixing alcohol or tobacco products cold turkey. You’d be surprised how much money you can save by dropping an entire category like lawn maintenance or professional salon services -- things you might not even miss once you make the initial adjustment.
7. Start a side hustle
Saving potential: Unlimited
Finding a good side hustle can help you make extra money after work. Give yourself a deadline, like one month, to come up with an extra $300, and start hustling.
You can create a side hustle by monetizing your hobby or working online as a virtual assistant. If you have an area of expertise, offer your services in the form of consulting or paid one-on-one meetings on the side. Use popular platforms like Uber to become a driver, Rover to become a dog sitter, or Airbnb to host guests in your home. If you have teaching experience, you can become a tutor or teach English classes online for students all over the world through companies like VIPKID.
Participating in a money challenge or using one of these proven budgeting methods can help motivate you to practice healthy spending habits and get your budget in line. Try out different versions to see which one works best for you and your lifestyle.
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