Saving money can be difficult if your budget is already stretched. But the “penny-a-day” savings challenge proves that building a savings habit doesn’t always require drastic lifestyle changes.
If you want to start saving but struggle with motivation or consistency, a daily pen challenge may help kick-start your efforts. Here’s how it works.
What is the savings challenge of the day?
The penny a day savings challenge is an easy way to save money where you increase your savings by one cent every day for a year. The idea is to start small and build the habit gradually.
Here’s how it works:
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Day 1: Save $0.01
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Day 2: Save $0.02
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Day 3: Save $0.03
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And so on…
On the last day of the year, you’ll save $3.65. In 365 days, the total comes to about $668.
Savings challenges like these can make it easy to build your balance gradually and develop good financial habits – without requiring a large lump sum deposit or a drastic reduction in your discretionary spending.
Read more: I’m a financial writer, and these are my 11 best tips for saving money
How to make the most of the day’s challenge
To maximize the benefits of the day’s savings challenge, consider pairing it with a high-yield savings account so your balance earns interest as it grows.
Today, the best high-yield savings accounts boast rates of around 3% to 4% APY. If you can find an account that offers a competitive rate with little or no fees, you can expect to have a little extra in your savings account at the end of the year without increasing your contributions.
You can also customize the challenge to best fit your financial goals and budget. For example, some savers choose to postpone the challenge by making very large deposits early in the year and working their way down.
Tracking your progress with a spreadsheet, budgeting app, or printable chart can make the process feel rewarding and help you stay motivated throughout the year.
Another savings challenge you can try
The penny a day challenge is one of the many savings challenges out there. Depending on your savings goal, timeline, and general preferences, there may be another strategy that works best for you.
Other ways to enter the penny a day challenge include:
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The challenge of not wasting: This is a commitment not to spend money on non-essential purchases for a set period of time.
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Challenge to save 100 envelopes: The 100 envelope savings challenge involves using envelopes to save a sum of money within 100 days. The envelopes are marked No. 1 to 100, each number corresponds to the amount of money to be deposited in each one.
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$5 bill challenge: Every time you get a $5 bill, you put it away instead of spending it.
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52-saving challenge: This is a snowball savings method that starts with saving just $1 the first week, $2 the second week, $3 the third week, and so on. In the final week of the challenge, you’ll set aside $52 for a total savings of $1,378.
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$27.39 is the rule: With this challenge, you transfer $27.39 to your savings account every day for one year. After 365 days, you will have a savings account balance of just $10,000.
