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You’re probably familiar with the envelope budgeting system, which helps you save money by getting you to pay for things in cash instead of mindlessly swiping your credit card. But have you heard of the saving money envelope challenge? By stashing your extra cash in an envelope every day, you can save about $5,000 in just over 3 months. Who knew envelopes could be such a powerful personal finance tool? Read on to learn more about how to win at saving money by using the saving money envelope challenge!
How The Saving Money Envelope Challenge Works
The saving money envelope challenge involves putting aside extra money in an envelope every day for 100 days. To participate in the challenge, you’ll need 100 envelopes, a pen to label them, a container to put them in like a shoebox, and cash to stuff each envelope with.
First, label your envelopes from 1 to 100. This number represents the amount of money you’re going to save each day during the challenge. Then, mix up the envelopes so the numbers are no longer in order and store them in the shoebox.
Every day, you’ll pick an envelope from the shoebox at random and stuff the envelope with the amount of cash labeled on the front. So if you pick up envelope 3, you’ll put $3 inside the envelope. For envelope 65, you’ll set aside $65, and so on.
It’s a good idea to pull out a couple hundred dollars in cash every time you get paid so you don’t have to run to the bank constantly. Also, make sure you store all of your stuffed envelopes in a safe, secure place, such as a locked safe. You wouldn’t want your hard-earned money to get misplaced or stolen!
Believe it or not, by the end of this simple 100-day envelope challenge, you’ll have about $5,000 saved. That just goes to show you the power of consistency when it comes to saving money!
Staying Motivated During The Challenge
The great thing about savings challenges is that they help gamify the act of saving money and make it fun. The fact that you don’t know which envelope you’re going to get helps make the envelope savings challenge exciting. The element of surprise will help keep you engaged and motivated to keep going.
It’s also a good idea to update a spreadsheet every day so you can track the amount of money you’ve saved so far during the challenge. Once you see how fast your money stacks up, you won’t want to stop!
Additionally, it can help to make a plan for how you’re going to use the money. Are you going to take a long-awaited family vacation or pay down your student debt? Will this $5,000 give you a cushion for emergencies so you don’t have to worry about car repairs anymore? Whatever your goal is, keep it at the top of your mind during the challenge so you don’t feel tempted to break your streak.
How to Adapt the Saving Money Envelope Challenge
Everyone’s financial situation is different. Right now you may not have enough extra cash to save money every day, and that’s ok! The saving money envelope challenge can be adapted to suit your finances so you can still achieve your goals, whether you want to buy a car or save for a down payment on a home.
Save Money Weekly or Biweekly
Instead of saving money every day, you could select one or two envelopes from the box once a week or biweekly when you get paid. You can also pause the challenge at any time and come back to it later when you have more funds available to save.
Use 50 Envelopes Instead of 100
If stuffing 100 envelopes with cash sounds too challenging, you could cut the number of envelopes in half and label them 1 through 50 instead. That way the dollar amounts you have to save are more manageable and the challenge won’t take as long.
Digital Savings Challenge
Another concern you may have about the envelope savings challenge is having hundreds of dollars in cash laying around the house, which could get stolen. Instead of using physical envelopes to store your savings, you could deposit the amount of money you need to save each day into a separate bank account.
The envelope savings challenge (and savings challenges in general) can be a great way to motivate yourself to save more money by gamifying your finances. The element of surprise of not knowing which envelope you’re going to pick each day is exciting. Plus, it’s satisfying to watch the number of stuffed envelopes add up and see your savings grow!
Have you ever done a savings challenge before? Would you try the envelope challenge? Why or why not? Share your thoughts in the comments below!
Read More
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Surviving the $5,000 Savings Challenge
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Image and article originally from www.savingadvice.com. Read the original article here.