Whether you’ve just done Christmas on a budget or not, chances are January could be a bit of a tight month. But now isn’t the time to put off saving for next year’s festivities. The key to successfully saving is to put away small amounts consistently. There are many ways of doing this including the penny money-saving challenge and you could start doing so right away. In this blog, we’ve taken a look at the penny saving challenge and others savings challenges. You’ll see just how easy saving can be!
WHAT IS THE PENNY SAVING CHALLENGE?
The idea is straightforward – save 1p on January 1st, 2p on the 2nd, 3p on the next day and so on. You simply add a penny on every day. By the end of December, you’ll have saved £667.95 (or £671.61 in a leap year)!
This gradual process of increasing the amount you save by 1p means you’ll get into the habit of saving money. And because it is a relatively small amount, you probably won’t miss it.
THE BEST WAY OF PUTTING THE MONEY AWAY
Deciding to save in increments of 1p is a great idea but you need to make sure you store it away somewhere safe. There are various options, although the most popular are:
THE ‘MONEY IN A JAR’ APPROACH
Saving loose change in a jar, large bottle or container is nothing new. If you have the willpower not to raid the piggy bank, this is a great way of doing it. Opting for a sealed jar or piggy bank helps to limit the possibility of raiding the pennies.
TRANSFER THE CASH
If there is one thing we’ve learnt from the pandemic and subsequent lockdown is that cash is slowly going out of fashion, and will probably continue to do so now that paying by contactless is an option open to the vast majority of us.
As a consequence, it can be harder to save your pennies physically. Transferring the amount every month into a savings pots connected to your bank account is an easy way of completing the penny saving challenge.
Some banks allow you to set up automatic transfers from your current account into a savings pot and with varying frequencies too, including daily, weekly or monthly.
If you plan on putting the monthly amount away, this handy table will help:
| January | £4.96 | July | £61.07 |
| February | £12.74 | August | £70.68 |
| March | £23.25 | September | £77.55 |
| April | £31.65 | October | £89.59 |
| May | £42.16 | November | £95.85 |
| June | £49.95 | December | £108.50 |
This is also a great way of catching up with the penny money-saving challenge if you start it later on in the year.
You could also split £667.95 by 12 – £55.66 – so that you put away the same amount of money each month, keeping you on track for a healthy savings pot by the end of the year.
ALTERNATIVES TO THE PENNY SAVING CHALLENGE
Here are some other ways of saving a nice amount of money during a year:
£1 FOR 52 WEEKS
The £1 a week challenge is popular and operates in a similar way to the penny saving challenge. During week 1 of the New Year you put £1 away in your savings, followed by £2 in week 2 and so on. By the last week of the year – week 52 and £52 added to your pot – you’ll have saved £1,378.
If you want to book a holiday once Covid subsides, this is a sure-fire way of having the money to hand to do it – you might even have enough left over for some swanky new luggage to take with you!
However, as you work your way through the year, you may find the amount you need to save becomes too much. As with the penny challenge, you could divide the total by 12 – £114.84. This lets you save the same amount each month.
THE DAYS OF THE WEEK SAVING CHALLENGE
This one is much easier to achieve. You put aside £1 on Monday, £2 on Tuesday and so on until your put away £7 on a Sunday and then, you start again on Monday. Effectively, you’ll be putting aside £28 a week.
By the end of the year, you’ll have put aside 52 x £28, giving you a total of £1,456.
MORE MONEY-SAVING TIPS
Saving can be hard to do but there are ways of getting the savings bug:
1)MAKE SAVING AUTOMATIC
Like any other new thing you do, you need to make saving part of your routine. That’s why money-saving experts suggest setting up an automatic payment from your current account to a savings pot so that save without really realising.
2)DON’T ‘OVER’ SAVE
Strike a balance between paying your bills each month, servicing your debt and keeping disposable income (i.e., money in your pocket). Over-saving means you make yourself short, can’t easily pay debts and have no money left each month to do the things you want to. Creating a budget that shows what you can save is the way around this.
3)SMALL AND CONSISTENT
Putting £5 a month away for 12 months may ‘only’ be £60 at the end of the year but it’s better than nothing. If you can afford to save more, whether that’s weekly or monthly, do so!
4)HAVE A GOAL
If you find saving hard, setting yourself a goal can help to keep you motivated to put money away. You might want to consider:
Short term goals – such as a holiday, a deposit on a new car or to grow a ‘rainy day emergency fund’
Longer-term goals – this could be saving for a place of your own or retirement. When you have a pot of money saved, you may want to start looking at investment tools that yield a better rate of interest on your money.
5)WATCH YOUR SAVINGS GROW!
There is nothing better than taking a look at your savings pot and basking in the warm glow of watching it grow!
Many money-saving challenges can kickstart a habit of saving small amounts of money each week and month. And with a handsome savings pot at the end of the year, you can continue to add to it or put it into a savings account that has a fantastic interest rate, swelling your savings pot even more. Why not give it a try and see how much you can put aside?
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