Challenges are quick and easy ways to save money. When it feels like it’s hard to save on your own, starting a challenge can be the right motivator for Finding that Money!!! One of my favorite challenges that can help you save thousands is called the $5 Savings Challenge. It’s a simple savings strategy that just only requires you to stash every $5 bill you come across. You don’t need to calculate the savings or cut back on your spending. The idea is to see how long you can do the change, and at the end, How much you were able to save. If you can do the challenge for at least a year, you are sure to come out with a larger amount. A challenge is a commitment. In this case, you commit to saving every $5 bill.
How to Start the $5 Challenge
How I come to learn about this challenge is from other bloggers and social media posts. The main idea is to take every $5 you’ve got, and then it goes into a jar. It‘s simple as putting leftover change in the jar, and the only difficult part is actually putting $5 aside. It’s better to make this challenge more fun by picking a reason for saving. Luckily $5 is on the smaller side, so you might not even notice it’s gone! As always, once you have your reason to save, it becomes easier to continue saving. Save your money with the end goal in mind. You can do a short-term goal like an Emergency Fund. Dave Ramsey recommends starting with $1000 before you start to work on your debt.
Anytime you break a bill or receive money and $5 bills, the objective is to put that money away. You have to pretend that it doesn’t even exist. Imagine if you went to a store and broke a $20 bill, and you had One $10, another $5, and a few singles. The one $5 would have to be put in the jar towards your savings goal. No matter when you decide to end the challenge, you can get real results! Sometimes all challenges are hard until you Start!
If you save 5 dollars a day for a year, you would have 1,825 dollars! It’s amazing how just $5 can get you the start of saving for an Emergency Fund! Put $5 aside every month as a challenge. You would have reached your goal by the end of the year!
Some Ideas for the Many Reasons to Save
- Emergency Fund (Start out with saving $1000 for emergencies before paying down your debt)
- Vacation ( Everyone deserves time off, a weekend or week getaway to a resort will do the trick)
- Home Remodel (If you were in need of some upgrades to improve the value of your home)
- New Car (The best way to buy a new car with less money owed is to have more money to put down)
- Paying off Debt (A long time goal can be a reality when saving to take care of higher interest accounts first)
Where to Stash your Money
Pick a good place to stash all your money. You can use a mason jar, a shoebox, or a decorative box from Michaels. Combine your $5 bills and collect them in rubber bands for easy counting. One idea would be to have a collection of $100 for each section. Putting the rubber banks or paper tape around it might motivate you to collect the next one. I recommend counting the whole thing until the end of your challenge. Surprises are just as rewarding as seeing your money grow. Suppose you don’t feel comfortable keeping a large amount of cash around deposit it in your savings account. At the end of each month, make a trip to the bank and physically deposit the cash. Making fewer bank trips would be most ideal for keeping up with the challenge. While it is in your savings account, you can even earn interest-especially if you have a high-yield savings account.
How to do the challenge without Cash
Not a fan of using Cash? Since were are in an age of highly convenient upgrades that includes banking. Consider signing up for a savings app like Digit, where you can automate $5 to be put away every time you get paid. Another solution is to automate your savings through your bank. Most banks, especially online banks, have automated savings features. If or when you use your card by swiping for your purchases, you can have $5 automatically transferred to savings.
5 Reasons why you should do the $5 Saving Challenge
- If you tried saving before but felt like you needed more money to save
- It will help you get into the habit of saving and its benefits.
- One $5 bills put away can mean less spending on small purchases
- No more loose coins, something that takes time to count and to cash in.
- You will build confidence to reach your savings goals
Remember all challenges take time and effort. The $5 savings challenge is easy to do because it’s small enough to miss. Start with your reason why you are saving by having a goal. Think of what the outcome of saving this money will be, a Vacation? A New Car down payment? Use that to your advantage by stretching out the savings time for as long as you can! I have many other resources for saving money on my website. By joining the email list, you will receive motivation and tips to help you in your finances.