Savings challenges are a great way to increase the size of our bank accounts or save up for a special expense. With tax season well under way, many of us are looking forward to receiving a tax refund. This is a great time to start a savings challenge, and since you’ve got money coming in, it’s the perfect time to start a 52 Week Reverse Savings Challenge. To make it easy for you, I’ve created a handy printable chart, which you can find at the end of this post.
Many savings challenges start you out easy. Just save $1 this week and $2 next week and so on. That is a perfect way to start out. But when you have just received an influx of cash, such as with your tax refund, rather than letting it burn a hole in your pocket, use that money to begin a 52 Week Reverse Savings Challenge.
With a reverse savings challenge, you start out with the biggest number first, then reduce the amount you save every week. So for week one, you put away $52, in week two, you save $51 and so on.
One thing that I really love about the 52 Week Reverse Savings Challenge is that you hit some nice round numbers throughout. In week 25, you will reach $1000. In less than 6 months, you will have put away $1000! That’s a great milestone to reach. In week 40, you hit $1300, and by the end of 52 weeks, you have saved $1378.
You can put away the money in a number of different ways. Personally, I like setting up a separate bank account for the challenge and then transferring money into it every week when I sit down to balance my accounts and pay bills. Of course, only do this if you have the ability to open free bank accounts. I do a lot of my banking with Capital One 360, and they allow you to have multiple savings accounts, so it’s easy and free to open a new account and transfer money in every week. Another benefit to a bank account is that you can get one that earns interest. Sure, rates aren’t all that high right now, but those pennies start to add up, so at the end of the year, you’ll have saved more than $1378 (how much depends on what the rate is at your bank, but hey, even an extra $2 takes you to a nice round number).
If you are more of a cash person, putting the money away in a mason jar or special box is also an option. Just be sure that you aren’t tempted to take the money out when you need some quick cash. Also, be sure that you’re keeping it in a safe place where it isn’t at risk of being stolen. I have to admit, I can see the joy in opening your safe every week and putting in a stack of dollar bills. It would make me feel like a fancy rich person in a movie, even if I was only putting away one dollar bills each time.
If you find yourself receiving a large tax refund or surprise windfall of cash, take this as an opportunity to start a 52 Week Reverse Savings Challenge. Turn that small amount of money into almost $1400 in only a year by making smart savings choices and growing your savings every week. Proudly check off the amounts every week and watch that number grow!
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.