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(From the Financial Literacy Blog) – The beginning of a new year is the perfect opportunity to set new goals. It’s estimated that over 188 million adults in the U.S. will make a New Year’s resolution in 2021—whether it’s learning something new, making a lifestyle change, or setting personal goals to better themselves in the coming year. However, sticking to a New Year’s resolution can be difficult. Resolutions can require a lot of dedication and self-control, and U.S. News has reported that around 80% of resolutions made in January fail by the second week of February. Money-saving goals can be especially challenging, as they can seem overwhelming or impossible in the current fiscal climate. However, the 52-Week Savings Challenge can help people achieve their savings goals over the next year.
The 52-Week Savings Challenge is an incremental savings plan that starts off slow with low-commitment contributions. It’s designed to start with minimal effort and fiscal sacrifice, as saving money is a skill and habit that people learn to develop. The basic principles of the Challenge are simple. During the first week of the year, a person would save $1. During the second week of the year, they would save away $2. During the third week of the year, they would save away $3. Throughout the year, someone doing the Savings Challenge would continue increasing their savings contributions by $1 each week. By the fifty-second week of the year, they would save away $52. By the end of the year, someone who successfully completed the challenge would have $1,378 in savings.
While saving $100 a month would roughly equal out to the same amount of savings by the end of the year, it feels a lot more manageable to find $1 to be saved for the week. It will increase by another dollar the following week, of course, but it’s a lot easier to start saving and building momentum when the first savings contribution isn’t an overwhelming amount. With this Challenge, gaining momentum and seeing the results each week encourages people to keep saving and ultimately helps them build a long-term saving habit.
While people can complete the Challenge by saving their money in a piggy bank or in envelopes, depositing the money into a savings account at a your local credit union may be a better option. People might be less likely to dip into their savings, as the money isn’t within physical reach at home. Additionally, a savings account with a competitive interest rate can yield more money over time.
In closing, the 52-Week Savings Challenge is a great way to get into the habit of saving money in the upcoming year. Those who take on the challenge have the opportunity to not only save $1,378, but to build good money management skills and gain financial peace of mind.