Are you looking for a fun way to save money? Have you never been able to consistently do this? Read on for the penny savings challenge, a great way to save money and reach your goals this year.
Importance of Saving Money
When you hear the phrase ‘saving money,’ what comes to mind? Do you envision someone staying at home and avoiding all things that cost money, putting all their extra cash into a piggy bank?
Saving money can be a huge challenge, especially if you’ve never done it consistently. It’s so easy to spend money on just about anything. There are so many temptations around. Advertisers constantly try to sell us the latest and greatest gadget, telling us that we need more things to be happy.
The importance of saving money and tracking savings cannot be understated. Why is saving money important? It’s incredibly important to have an emergency savings account in case any surprise purchases come up. Within a moment’s notice, your car may not start. What if you need to pay for a trip to the dentist and you’re not 100% covered by insurance? You could put these purchases on a credit card or a line of credit, but that’s not the best idea.
Accruing interest can negatively impact your credit score, and the extra credit card interest will mean that you’ll end up paying a lot more for the item than amount it originally cost. Month over month, a small amount paid towards interest can add up to a lot more!
Saving for Unexpected Expenses
In addition to the importance of saving money in an emergency account, saving money for large purchases is incredibly important. Again, it’s easy to put a vacation or even a new laptop on a credit card, but it’s much better for your finances if you save up for it. Additionally, you’ll feel a lot better mentally if you’re paying for things with cash. The reward of treating yourself after working hard to save for it is a great feeling! In summary, the benefits of saving money are vast.
How Does the Penny Saving Challenge Work?
The penny savings challenge is another enjoyable way to save and achieve your goals. Unlike other saving strategies, you don’t need a lot of money to get started and you can choose a smaller goal to work on.
To participate in the penny savings challenge, you’ll first need a positive attitude and a personal commitment that you’ll consistently save one cent every day. Over the next 365 days, you’ll set aside this small amount of money. On the first day, set aside one penny. On the second day, save two pennies. After two days, you’ll save three pennies on your third day of the challenge. Continually add one penny to your savings each day for 365 days.
Once you’ve committed to saving, it’s time to decide on what goal you’re working towards. After the penny savings challenge is complete, what do you want to spend the money on? While saving pennies each day won’t allow you to splurge on a multi-week European vacation to Italy or a new Lambourghini, you’ll build good habits for life. You may, however, be able to spend a little weekend away or buy a new designer dress that you’ve been eyeing for months.
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Visualizing Your Goals
After settling on a goal, it’s time to visualize it! What better way to track your progress than using a fun chart? There are so many free printable savings tracker templates on Pinterest that you can print out and use to keep track of your progress.
Use a Template
Here is an examples of a penny savings challenge template. With this printable money saving challenge template, check the box every time you’ve set aside the money.
Check out more examples of printable money saving templates here.
Once you’ve chosen a template, print it and stick it in an area of your house. Ideally, choose a spot where you will see it multiple times a day. The fridge or a spot hung on your front hallway is a great way to see it when you’re cooking a meal or coming home from work. In addition to printing out an inspiring template, you can also create a collage or print out a picture of what you plan on spending your money on that you’ve saved.
Importance of Creating and Setting Goals
When you visualize your goals and what you’re working towards, it’ll be a lot easier to create good saving habits. Month over month, you’ll save more money and get that much closer to your big goal being reached! Just make sure to set achievable goals. Why is it important to set realistic goals? If you try to work towards something that’s too difficult, you will likely become frustrated and give up easily. Start slow and work towards a long-term savings goal. Most important of all, don’t give up! Challenges like penny a day saving or the a penny a day challenge take practice, but keep going and you’ll build great saving habits!
After you’ve decided to participate in the penny saving challenge and have printed out a template, decide on how you’re going to save the money. Saving money in a jar is the best way to go about this. Your ‘jar’ can either be a physical jar, piggy bank or box, or it can be a separate bank account. It’s an important idea to keep the money in separate place so you’re not tempted to spend it! Build good habits by keeping your money in a separate place.
Some countries, like Canada, do not have pennies. If you’re from a country that doesn’t use pennies, you can do a weekly challenge instead. Each week or month, transfer a certain amount back to your bank account or deposit a larger amount in your piggy bank. The beauty of the penny savings challenge is you can decide how often you want to put the money in your account! The principle remains the same: save money and build good habits for the future.
How Much Do You Save with the Penny Challenge?
Save a penny a day for a year and you won’t make much – only $3.65. However, If you stick with the penny savings challenge on a daily basis (doubling a penny every day), over the course of the year, you can make an entire $667.95! While you won’t become rich with the penny savings challenge, it’s a great way to contribute to an emergency savings account or pay for extra expenses, like a weekend trip away or some new clothes.
If you think that a penny a day increased each day isn’t enough to bother with the challenge, why not increase the amount? You can easily participate in the challenge while working towards a larger amount. You could increase to five cents and double that amount each day. The principle remains the same – this small amount saved will add up to a larger amount over time.
Conclusion – Penny Savings Challenge
The penny savings challenge is a great way to get started with saving money. It’s easy to get started, you do not need to save much per year, and most off all, it’s fun! Will you be able to pay for big-ticket items as is the case with other saving methods like the 52 week money challenge and the 6 month saving challenge? Probably not, but the penny savings challenge is a fantastic strategy to add to your life alongside other creative savings strategies. Saving money benefits you in both the short-term and long-term. Give the penny savings challenge a try!
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Janita is a frugal living expert and owner of Frugal Fun Finance. With over five years of personal experience finding and trying out the best ways to make and save more money, she's eager to share her knowledge. Janita's strategies have helped her save thousands of dollars for funding investments and traveling to over 20 countries.
Janita completed training in personal finance at The University of Western Ontario and McGill University, two prestigious Canadian universities. Her expertise has been shared on GoBankingRates, Yahoo Finance, and NASDAQ.com.
