Have you seen the 52-Week Money Challenge all over social media since New Year’s Day? I have. I’m not a fan. You’re challenged to save $1,378 this year by:
- Saving increasing amounts each week. Start with $1 during week one. Then, increase your savings by $1 each subsequent week. That means in week 37 you save $37 and on week 52 you sock away $52.
- Putting the money in a jar. You paste a savings chart to a jar, then put it on your kitchen counter so you’ll never forget to put a week’s savings in it. (Seriously, Pinterest is home to thousands of these cutesy money-filled jar photos. Don’t search it. I dare you not to.)
Don’t Do It! (That Way)
Look, I’m all for saving money. Over the next 52 weeks I’m even aiming to save $1,378, just like those in the 52-Week Money Challenge. But, I’m not doing the 52-Week Money Challenge as I’ve seen it presented. I’m doing it PYD (Pocket Your Dollars) Style.
Here’s what I am going to do instead (and, I’d really super duper love to have you do this too):
Save a Decreasing Amount Each Week
This week I’m going to set aside $52. Then next week, I’m going to decrease the amount I save by a buck and set aside $51. On week 37 I’ll save $16 and on week 52 I’ll save a whopping $1. Why?
- Immediate results. After four weeks I’ll have an extra $202 in the bank. Under the rules of their challenge you would have saved a measly $10. In fact, it’d take you until week 20 to save $200+ under their system. After 4 weeks of doing this the PYD way, you’ll have something real and valuable to show for your efforts. Don’t believe me that immediate results matter? Which 4-week weight loss plan would intrigue you more – one that yields a 1 pound drop or a 12 pound drop? Immediate results motivate.
- Get the heavy lifting done. If $202 seems like a lot of money to save in January, then trust me, it’d be an impossible amount for you in December (sorry if the truth hurts). Let’s do the hard work right now, when our motivation is highest. Then, come next Christmastime we only need to find an extra $10 in our budget. Nice.
Get Your Money Off the Kitchen Counter
Instead of saving money in a jar, I’m going to save it in my free Capital One 360 savings account. Why?
- We consume things in jars. Jars are for jelly. And pickles. And mayonnaise. Consumable products come in jars. This challenge is about saving. It’s not about consuming, so a jar is the wrong tool. If you like the visual impact of watching a savings jar fill up, then use our 52-week money challenge printable chart to track your progress.
- Distance is good. My financial life changed, for the better, when I distanced myself from my savings (I say lots more about that in my book). I know myself. If I had a jar of money sitting on my kitchen counter, then I’d order pizza. Or, I’d get treats from the ice cream truck or an occasional Starbucks. I want to ensure that I will have $1,378 at year’s end (nothing spent out of it). To make that happen, I’ll automate deposits into my free Capital One 360 savings account. (The icing on the cake of these Capital One accounts is that it takes 3 days for money to transfer back into your main checking account, which means it’s impossible to use the funds to cover a potentially bounced check.)
52-Week Money Challenge PYD Style
I’m raring to go with this year-long challenge. Are you with me? Here’s how we’ll do this:
- Decide. Commit yourself to the cause. Are you willing to do what it takes to save $1,378 over the next year? If you are, then decide what you are saving for. I’d recommend you save toward an emergency fund, unless you already have 3 months of living expenses set aside. Personally, we have an emergency fund so I’m earmarking this money toward my family’s $2,000 medical deductible (I like to have that money saved, on hand, just in case – God forbid we need it).
- Open a free Capital One 360 savings account. If you don’t already have a free Capital One 360 savings account earmarked for your purpose, then open one. My family has multiple Capital One 360 accounts, with the oldest one being 12 years old. (Note: your credit will not be pulled when you apply for a savings account.) (Full disclosure: I do earn a referral bonus if you open an account via my link, but I LOVED them for y-e-a-r-s before I knew about that. I’d recommend them if they didn’t offer that.)
**Note: If for whatever reason you’re not keen on Capital One 360, here are a few other options:
- Ally Bank. With an Ally Bank account, there’s no minimum deposit to open an account and no monthly maintenance fees. You can also deposit checks remotely with their eCheck Deposit feature. Check the widget above for the latest APY (annual percentage yield) that Ally Bank offers. If you’d like to open an account, just click the orange “Open an Account” button above.
- GE Capital Bank. GE Capital Bank also offers no minimum deposit to open as well as no transaction fees. Interest is compounded daily and paid monthly. Please note that there is a six withdrawal limit per statement cycle. To open an account, click the orange “Open Now” button on this page.
- Set up your January transfers. Pick the day each week you want transfers to happen (Friday, perhaps?), then set up your first four transfers*:
Week 1: $52
Week 2: $51
Week 3: $50
Week 4: $49
*If $200 seems like an overwhelming amount for you to save right now, then find a lesser number that still stretches you. Think – what can you sell? What services can you offer others (babysitting, pet sitting, walk the dog, shovel sidewalks, etc.)? What can you go without for a few months so you have money to save?
4. Track your progress. Use this free 52-week money challenge printable chart to track your progress. (A huge thanks to the talented Jen Goode of 100Directions.com for creating that chart for us)
What do you think? Are you going to do this year-long challenge PYD style? What are you doing to make $202 available for you to save this month? I’d love to hear from you with ideas and feedback. (Update: Many have requested some type of visual to track their savings progress. I’ll create one and share it. I also plan to share monthly reminders to get your transfers set up.)