Savings Hack: How the $5 Saving Challenge Can Help You Save $7,000 in a Year
There is no better time to start a profitable saving routine than now. If you have ever considered elevating your financial status through a savings lifestyle but uncertain of what works well, the $5 saving challenge is your best shot.
$5 challenge continues to trend for a number of good reasons. Nevertheless, there are still a handful of people who would simply wave it off because they perceive $5 as being unreasonably meager, and therefore, wonder how many more months it will take to accumulate any significant amount. They have the means but lack the will. The secret to success, in this regard, is a good understanding of $5 saving tips. This article sheds light on the cumulative possibilities of the $5 saving challenge and what this exercise can help you to accomplish at the end of 12 months.
Before moving into details, let me point out that the $5 saving challenge is essentially for low income earners and not for rich folks. The idea is to help low income earners save for the future while also instilling financial discipline in them for greater attainments. There is an endless list of what $5 saving challenge can help you to achieve when accumulated, examples of which are:
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Saving to pay bills
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Saving to sponsor your education
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Saving to fix a house or car
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Saving for investment
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Saving for holiday trip or tourism
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Saving for retirement support
Weekly Savings Challenge
If I save a dollar a day for a year, how much would I have?
The above question often comes from intending newbies. Of course, when you save a dollar for 365 days, it would amount to $365 all told. This answer is a potential turnoff if you are hoping to raise an amount reasonable enough to sort out some financial needs. But it is also entirely different from what a $5 saving challenge is designed to attain. The aim, approach, and results are different.
$5 saving weekly challenge is designed to progress by saving an additional $5 in excess of the amount you saved the previous week. In 52 weeks, you would’ve saved $6,890, following this guideline. Think of what an idle $6,890 will help you do!
52 Weeks $5 Challenge
It is called ‘a challenge’. Therefore, there is a need to set a specific time frame for a targeted result. A good chunk of the people that have embarked on this challenge, those that I know, pegged it at a-52-week duration to garner as much as $6,890 without hassle.
It means, if you start this week, within a space of 12 months hence, you will have an extra $6,890, which would have otherwise gone into triviality.
Don’t forget that there is no specific amount for this challenge. Whatever amount you choose to keep aside each week is to be determined by the following two major factors:
- Your income status
- The object of the challenge
If you are saving to buy a new home in Texas within the next 12 months or invest in real estate, it can only be because you have the financial war chest. That equally means that you aren’t starting your challenge with just $5. The important thing is to accomplish your savings objective at the end of the challenge.
Getting Started with Your $5 Saving Challenge
The first thing to consider is setting an attainable goal. The idea is not for you to compromise your essential needs. In fact, even for low income earners, a $5 saving challenge can be effectively done without them skipping any of their basic needs. One of the benefits of this challenge is that it helps you identify areas of wasteful spending and nip them off.
Setting an attainable goal means you must have assessed your income and decide an amount that you can conveniently set aside while also satisfying basic essentials. Be careful not to make your target too high because if you do, it’s unlikely that you will stick to it.
After outlining the objectives for your $5 saving challenge, the next thing to identify is the saving approach. Your choice in this regard depends on the income flow. For example, someone who gets daily payment for their services may prefer a different saving approach than another individual who gets a weekly payment. In all, making a direct deposit of $5 every other week doesn’t come off as pretty fashionable. Here are some approaches you may want to consider in the course of your savings journey:
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Piggy banking
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Pay deduction
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Setting up an automatic transfer
Piggy Banking
As old as the practice of piggy banking is, it is still very fashionable in present days. This involves setting up things like Monzo Pots to serve as an avenue where little amounts are chipped in periodically.
Making your piggy bank a place for unspent bills will help you raise unexpected amounts in no time. One way of killing the habit of unnecessary spending is to keep excess dough far from reach and piggy bank comes handy. Your Monzo pot may not necessarily be far from you but the fact that the money in there has earned an attached goal gives you a good reason and strength to refrain from draining it.
You certainly do not need to save all $6,890 in a single piggy bank at a go. The idea is to keep the excess bills away from your wallet. Occasionally, you can transfer your accumulated funds to any convenient savings outlet of your choice.
Pay Deduction
Some of us earn weekly income and if the week doesn’t turn round again, nothing else comes. Under such circumstances, a direct deduction during payment is ideal.
All that is needed would be to inform your employer about your need to split your wage into different accounts, fill out the information or destination where you want to grow your $5 a week saving challenge and that would be it. When that time comes again for payment, your 52 weeks $5 challenge will be taken care of first before anything else.
Setting Up An Automatic Transfer
Check if your bank allows automated transfer of funds. If they do, it may suit you to take advantage of that. Having this measure in place will help you not to skip any week.
How 52 weeks $5 challenge works
52 weeks $5 savings challenge is not about saving just $5 every week. It’s about saving more $5 than you saved the previous week. This is the point where you need your $5 dollars a day calculator.
The above table or $5 dollars a week calculator demonstrates what you are expected to save each week as you progress into the challenge. Start by saving $5 in week one. In week two, save $10. That’s $5 more than you saved in week one. Save $15 in week three. That would be $5 more than you saved in week two and $10 more than you saved in week one.
If you sum up what is saved in this first three weeks, it would be $5 + $10 + $15 = $30.
If you follow this 52 weeks $5 challenge calculator diligently and save an appropriate amount in corresponding weeks, you will arrive at $6,890 at the end of 52 weeks. Right now, you are probably wondering if you really have the capacity to sustain the program through the stipulated 52 weeks.
If this is your concern, I urge you to put your mind at rest. Somehow, this challenge has a way of taking care of itself. In subsequent paragraphs, you will learn about how your commitment to the $5 saving challenge can boost your morale and motivate you to earn more income.
Other Benefits To Look Out For In Your $5 Saving Challenge
Other than raising money for a targeted goal, a $5 saving challenge has the tendency of redefining your overall financial outlook. You won’t know what a wasteful spender you are until you start resisting the urge to throw your hard-earned money at things that don’t return significant values. But this, on its own, is within the core basis of financial discipline, which rarely comes without determination and deliberate efforts.
Again, the $5 saving challenge is accepted as a morale booster and motivator. Let’s look at how these qualities can reflect on your financial growth.
$5 Saving Challenge Curtails Wasteful Financial Habits
How does this happen?
It happens when you deliberately overstep the boundaries of necessity into luxury like buying fanciful things that aren’t necessary for your survival. It can equally result from things as little as failing to return those ill-fitting pants on time or picking a bit more groceries than you need.
Even the most budget-conscious people still slide into wasteful spending at times let alone those that have not really started making deliberate efforts to desist from it. What I mean is that we are all prone to it until we start making conscious efforts towards curtailing it.
When you have decided not to fail in your $5 challenge, you will want to properly account for every cent that comes into your hand. This is where diligent budgeting starts. It’s also where unnecessary spending is identified and nipped.
$5 Saving Challenge As A Morale Booster And Motivator
One of the reasons I’ll encourage you to try the 52 weeks $5 challenge is that beside the likelihood of you meeting your target and accomplishing a financial goal, there is also a high chance that you strive to earn more income than you used to. As you progress into the weeks and your weekly set-aside increases, it would be only natural for you to work harder and explore other means of generating income if what you have at hand doesn’t fully satisfy your need.
This could lead to acquiring new skills or engaging in one self-development activity or the other, which comes with both short and long term income benefits.
Final Thoughts
You are probably here because you want to do this and I know you can. To some people, a $5 saving challenge is a game changer that enables their financial prosperity. However, some other people that tried it may not conveniently say the same mainly because they failed their target. If you must embark on this journey, endeavor not to set a goal that will over strain your finances so that in the end, yours won’t be another case of abandoned exercise.
Good luck…
