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Updated on Friday, March 22, 2019
Everyone should treat saving money as a serious effort to accomplish serious goals. Building an emergency fund, accumulating a down payment for a home or saving up for a big purchase are all key objectives for your financial life, after all.
But sometimes it’s OK to take a more lighthearted approach to savings, like the 52-week money challenge. It’s a great way to gamify the process of stashing cash — although just because it’s fun doesn’t mean it’s an easy win. If you keep up with this unusual challenge for a whole year, you could end up saving nearly $1,400.
The 52-week money challenge explained
The 52-week money challenge — also referred to as the 52-week savings plan — makes saving a decent sum feel achievable by breaking it down into small steps.
Here’s how it works: You start by putting $1 in your savings account in the first week of the challenge. Then you stash away $2 in week two, $3 in week three, $4 in week four, all the way to $52 in the final week. At the end, you’ll have saved $1,378.
The idea is that by saving a little bit more each week, you’ll see your savings grow quickly and stay motivated to continue putting away money after the challenge is over.
“The 52-week money challenge gives you a place to start and have it all mapped out. If you can focus on it once a week, you can make it happen and know where you’re going to end up at the end of the year,” said Kelly Crane, CFP, president and chief investment officer of Napa Valley Wealth Management.
Why the 52-week money challenge works
Many people credit the 52-week money challenge with jump-starting their savings game. Here’s why:
- It makes saving a habit: The 52-week savings plan forces you to commit to saving. When you visit your bank and transfer money from your checking account into your savings account each week for 52 weeks, saving becomes a habit.
- You end up with a decent amount saved in the end: An abstract goal of “saving money” may not motivate everybody. For some people, the big prize at the end of the year helps them follow through with the savings habit.
- It helps you set bigger financial goals: Your savings account balance is just a number — what you do with the money is what really matters. The balance saved in the challenge lets you think about the financial goals you’d like to accomplish, such as paying down student loans or accumulating a down payment for a mortgage.
Tips for nailing the 52-week money challenge
Ready to take the challenge? Here are a few things you can do to ensure you stick with the plan from week one through week 52.
- Automate your savings: Most banks allow you to schedule deposits into your savings account. The simplest way to accomplish the challenge is to arrange ahead of time transfers to your savings account for the correct amount for each of the 52 weeks.
- Don’t go in order: The order of the scheduled deposits helps make the challenge simple, but you don’t have to follow it to a tee. If you feel like you need to make deposits out of order, print out a copy of the plan and cross off different weekly amounts as you accomplish them. For example, if you get a tax return in the spring and can afford to save $52—the biggest weekly deposit—do it then and cross it off.
- Engage in friendly competition: Find a savings buddy and start the challenge at the same time. Competition will keep you motivated to save, and maybe even open the door to sharing financial tips with each other.
- Set reminders and smaller goals to stay on track: If you don’t want to automate your savings, set reminders on your phone, calendar or computer so you won’t forget. If you’re feeling overwhelmed by the higher amounts later in the challenge, break them down into smaller goals. In week 40, you could save $20 on Monday and another $20 on a Friday to hit your weekly goal in more manageable chunks.
- Keep the challenge going for a second year: Once you hit the end of the 52 weeks, keep the momentum going into a second year. You could even try doubling the amount you save each week in year two. Try cutting out expenses that match the amount you save in a given week. Stash the second year’s funds in a CD to boost your savings.
Who might not like the 52-week money challenge
While this 52-week savings plan has universal appeal, it might not be the right choice for everyone. For some people, there are reasons to think twice:
- People with a large amount of high-interest debt: Saving money can feel pointless if you’ve got a lot of debt collecting interest, said Crane. You might consider using your funds to pay down high-interest debt before pursuing the 52-week money challenge.
- People with inconsistent income: Does your paycheck fluctuate week to week? You might feel like your income isn’t consistent enough to keep up with the plan.
- If you tap into the savings too early: As you start to see your savings grow, it can be tempting to withdraw money to cover expenses or buy something you want. But tapping the savings too early might throw you off track and undermine the driver of the whole challenge: Ending up with a full $1,378 at the end of the year.
The bottom line on the 52-week money challenge
If you want to save money but you’re not sure how to start, the 52-week money challenge can give you the structure you need to finally get your finances in order — but it’s just a tool. Don’t be afraid to modify the plan to suit your needs, or ditch it altogether in favor of a more aggressive savings strategy.