The new year compels many individuals to implement effective money-saving habits. However, the lack of a planned financial strategy, as well as the absence of direction, can hamper most saving plans.
Oftentimes, the reason behind the failure of implementation is not just an ill-formed strategy, rather, it is a lack of self-discipline and motivation to continue with the created plan.
If you struggle with retaining the motivation to save regularly, coming up with fun saving plans can work out in your favour.
When it comes to saving, there is no one solution that fits every personality type. Therefore, you need to examine your spending patterns and identify ways that would individually work for you. One approach to saving for compulsive spenders is participating in money-saving challenges. Money-saving challenges in the UK allow you to set aside a certain portion of your income to fulfil a specific goal.
Unlike other forms of savings, these challenges keep you motivated. This is because when you commit to a challenge, a strategy is drafted with the intention to overcome it. As a result, the engagement with the task increases and the progress is regularly tracked.
As the progress is recorded, you are able to see how participating in the challenge leaves a positive impact on your financial health. Essentially, seeing the results motivates you to continue with the new routine and convert it into a habit.
The ensuing guide enumerates the number of ways you can save money with money-saving challenges.
To experience the best results, it is recommended to participate in these challenges with your friends and family members. With a little bit of friendly competition, the motivation to fulfil the goals of the challenge will increase.
So, if you are wondering, “How to save money each month?”, continue reading!
As the name suggests, the no-spend challenge requires you to go without spending- with a few necessary exceptions, for a limited duration of time.
While it may seem overwhelming at first, it is quite easy, as it can help you gain an insight into your negative spending patterns.
The no-spend challenge has two primary goals. The main objective is to help you save money; however, this approach also aims to help you learn about all your negative spending habits. As a result, the completion of the challenge would empower you to create new strategies to avoid compulsive spending in the future.
To participate in the no-spend money challenge, you are required to set a number of days or weeks, during which unnecessary spending would be impermissible. If you are starting out, it is recommended to pick a weekend to implement this strategy. You can start with a smaller duration, and when you get familiar with the task, the number of no-spend days can increase.
The most common time frame for the no-spend challenges is:
Weekend: If you spend the weekends without making unnecessary purchases, you can save a significant amount of money.
One Week: With a one-week plan, you would be able to gain an insight into your everyday spending patterns, and subsequently, create a plan to fix them after the challenge is concluded.
One Month: In a one-month challenge, administering self-discipline would be required. However, in this duration, you can save the most amount of money. You can execute the one-month saving challenge every alternate month to get the best results.
As stated earlier, the no-spend saving challenge only prevents you from making unnecessary purchases. Considering this, before participating in this venture, it is imperative to differentiate the necessary spending from the unnecessary costs.
You can create a list of all the important payments that need to be made. The utility bills, debt repayments, grocery budget, cost for commute, and other such expenses should be included in the exceptions.
Similarly, the no-spend list would feature unnecessary spending activities, such as shopping, eating out, entertainment, spa-day and other impulses purchases.
Parallel to all other saving methods, it is very easy to get off track with the no-spend challenge. However, if you want to see results, it is essential to stick to the plan. You can do this by setting up an end goal.
Your end goal would be the object or an entity that you plan to save for. This can be a new gadget, a vacation, or even a down payment on a house. When you feel yourself getting the urge to spend, visualise achieving your goal. This thought can overpower your desire to spend money.
If you are in search of a money-saving challenge that enables you to save a certain amount for a specific period of time, the 52 Week money-saving challenge would be the right choice.
Unlike the no-spend challenge where you can decide the number of days you want to save, the 52-week savings challenge requires you to set a specific amount aside for a duration of 52 weeks, which is around one year.
If you regularly follow the requirements for this saving method, you can benefit from an additional amount of £1378.
This approach is ideal for individuals who wish to save for long-term purchases. For instance, if you want to go on a mini-vacation, this money-savings approach would be the ideal choice.
One of the greatest advantages of this savings approach is that you are not required to allocate a large sum of money from your income to the savings plan. In fact, the amount submitted to the savings fund would increase week by week. The highest payment made to the fund would be £52, which can be extracted from a weekly income.
To start off your savings venture, you would be required to pay:
To make this plan a success, you can dedicate a specific bank account to your savings fund. You may also dedicate an envelope or a deposit box for a more traditional savings approach.
The traditional 52-week money saving challenge is quite beneficial. However, one common problem that most compulsive spenders face is the lack of dedication. As the challenge starts with a small amount that gradually increases, many individuals fail to continue until the end of the challenge.
Taking that into consideration, you can participate in the 52-week challenge but take care of the larger amounts first. You would still save £1378 at the end of the year, however, the amount you pay first would be different.
To perform the 52-week challenge backwards, the following strategy has to be followed:
This approach is more beneficial, as it can reduce the pressure of saving with the passage of time. As a result, you would be more motivated to continue with the challenge as the duration progresses.
Both the aforementioned challenges have their own unique advantages and disadvantages. If you are someone who finds it difficult to establish a habit of saving, the former approach would be ideal. This is because you have to pay a minimal amount at the initial stage, which can allow you to create a habit without restricting most of your spending.
Similarly, if you are someone who struggles with continuing a habit, performing the challenge backwards can be more advantageous. This way, you can manage all the big payments first and then move on to paying smaller amounts. This method is also ideal if there is financial uncertainty concerning your future.
8-Week Vacation Savings Plan
Nothing can motivate you more than putting money aside for a vacation. With the 8-week vacation saving challenge, you can put aside around £1000 over a period of two months.
Like the 52-week challenge, this plan does not require a fixed amount for investments made to the savings fund. Instead, you are required to pay a variable amount from your weekly income to save enough for an enjoyable vacation.
Essentially, the primary goal of this plan is to gather funds for a vacation. However, this strategy can also be used for other goals, such as purchasing a car.
How it works
Apparent by the name, the savings plan would require you to allocate a specific amount to the savings fund for a period of eight weeks. The saving schedule would be as follows:
In addition to this, you are required to save and scale back to get the best results. You can cut back on meals, shopping and entertainment and ensure that regular payments are made to the fund.
The holidays can be financially stressful. Considering this, it is imperative to plan for the holiday season from the beginning of the year.
While the main goal of this fund is to earn enough to plan a vacation for your holidays, or to save enough to shower your loved ones with the best gifts, you can also use the money to fulfil other financial goals.
With this approach, a total of £1440 can be saved by the end of the year. However, as the duration and the amount collected is larger, you would be required to allocate £30 pounds to the savings fund on a weekly basis.
As the year commences, dedicate an envelope or a storage box to your savings fund. Each month, the amount can be added to the box/envelope.
You can also open a separate bank account that is dedicated to savings. This approach is more advantageous if you are impulsive with your spending. With a bank account, your money can be stored in a non-tangible form, thus making it more difficult for you to spend it.
The holiday helpers saving challenge is ideal for individuals who are willing to save for the long run. This approach produces a good amount, which can be used for giving gifts to your loved ones during the holiday season, or for taking a well-deserved vacation at the end of the year.
A year is a long time to save. Some individuals find it difficult to make a long-term commitment to their saving strategy. For this purpose, the 26-week savings plan can be ideal. With this approach, you can save a good amount of £1,404 in the period of six months.
The 26-week savings plan works quite similar to the 52-week savings challenge. The primary differences between the two are the duration, as well as the percentage by which the amount increases. In this case, you would be required to:
With this savings plan, you can save regularly and quickly, without feeling overwhelmed about the allocation of money. Additionally, as the investment can be used after a six-month period, you would not have to commit for a longer duration.
One Pound Bill Savings
Apparent by name, the one-pound bill saving challenge requires you to add the one-pound bill into your savings envelope every time you receive change back. This approach is simple and does not require much investment. Instead, you would only be required to place the money- if you come across a one-pound bill.
This challenge is ideal for those individuals who wish to save without a specific goal in mind. It offers flexibility in terms of the money you allocate, as well as the total duration you wish to save.
If you participate in this challenge, a good amount can be gathered, which can then be used to fulfil any financial goal. However, the key to benefitting from this method is the time duration. Fundamentally, you would be able to enjoy a heavy fund if you save for a longer time frame.
While the one-pound bill savings challenge can work independently, it is recommended to pair it up with the envelope budgeting technique to make sure that you do not overspend in other areas of your finances.
Envelope budgeting refers to the art of managing money by using the traditional cash and envelope method. In this, you are required to dedicate a specific envelope to each area of spending.
For instance, an envelope can be dedicated to savings, utility bills, grocery costs, internet bills and other such expenses. Next, the budget is created, which assigns the amount of money that would be placed in each category. Once the planning stage is completed, the envelopes would be filled with the specified amount in cash. As a result, when the individual plans to spend the money, they would extract the amount from the dedicated envelope only. This would enable them to stay on track with their finances, without overspending in certain areas.
In the case of saving, you can leave the envelope marked ‘savings fund’ empty and fill it with pound bills over a certain period of time.
If you are looking for a fun and unpredictable money-saving opportunity, the weather savings challenge is the perfect option.
This challenge requires you to allocate an amount to your savings fund, depending on the weather condition in your city.
For instance, if you live in a city that experiences a hot temperature regularly, create a plan to dedicate £5 to a savings fund each time the temperature exceeds your benchmark for a hot day. You can decide the amount and the temperature benchmark beforehand to avoid confusion later.
Next, the duration for saving would need to be decided. It is recommended to save for a year, as the accumulated amount would allow you to make a reliable investment with your savings fund. However, as this challenge is quite flexible, the amount of time you choose to save depends entirely on you.
One drawback of this challenge is that you may forget to transfer the amount to your savings account, as there is no schedule for making a payment. Considering this, an alternative approach to this is sending the money at the end of each month, after taking a look at the month’s weather patterns. This would not only save time, but you would not miss any payments either.
The ninety-two days savings challenge encourages you to create a savings fund in just three months. This challenge is recommended for individuals who do not want to commit to a long-term saving plan.
With this approach, you can save a healthy amount of £1008 pounds by making weekly payments of £84.
To make the savings process easy, creating a calendar is recommended. A three-month calendar can mark the days of the week when the payment has to be made. Moreover, you can dedicate a savings account and schedule automatic payments. This way, your money would be transferred to the savings fund, even if you forget to make a transfer.
The downside to this approach is that you would have to make heavy payments each month. For this purpose, learning to manage money effectively is essential.
Home-Cooked Meals Challenge
Food contributes to a chunk of people’s budget, especially if they eat at restaurants on a regular basis. Considering this, you can save a significant amount of money by participating in the home-cooked meals challenge.
As the name suggests, this challenge empowers you to cut the cost by cooking meals at home. To start off, dedicate a budget to groceries and purchase ingredients to cook healthy meals at home. This would prevent you from spending excessively on your meals.
Essentially, this savings challenge is ideal for individuals who are unable to extract an amount from their income to add to the savings fund. However, this approach would require strict implementation of self-discipline to ensure that you regularly cook at home.
You can also save on groceries by using coupons and grocery store discounts. Additionally, buying ingredients in bulk also cuts the cost in many areas. However, bulk shopping must only be done for items you frequently use.
The results of this challenge would become apparent after a few months; therefore, it is recommended to carry it out over for at least a three-month period.
Challenging yourself to save money is an effective and fun way to safeguard your financial future. All the aforementioned challenges have their own advantages and disadvantages. To decide which challenge is right for you, consider the amount of time you are willing to spend in this venture, as well as the overall budget you are willing to allocate to your savings.
You can either choose to invest over a period of fifty-two weeks, three months, or for a six-month time duration. Additionally, the preceding challenges also include an opportunity for individuals who require flexibility. If you do not want to conform to a strict saving schedule, you can try the one-pound bill savings challenge or the weather saving challenge.
Similarly, the home-cooked meals challenge can be chosen when your income does not allow you to allocate a certain amount to savings. This approach can also be combined with other challenges to collect the ultimate savings!