It’s already the third week of 2022! This for me feels like the best time to re-evaluate my goals and make new ones. Do you share with me the same sentiment? Perhaps it is time to get your finances in order.
Whether you want to create an emergency fund, save up for a vacation or put away some money for this year’s Christmas, a money-saving challenge could come in handy. A money-saving challenge helps you set specific financial goals and provides a plan for you to follow so that you can achieve them.
Aside from increasing the feeling of security and peace of mind, saving also provides you with a strong cushion against unanticipated financial upheavals.
Let's look at some money-saving challenges you can choose to help you get to your goal.
This savings challenge has existed for a while. There is the simple version where all you have to do is decide to save a certain amount a week. Settling on a manageable amount is key to its success but again it has to be a meaningful figure. Saving Ksh100 a week will leave you with Ksh5,200 in December. Not very satisfying, maybe?
The second version is starting with a certain figure then saving in increments of a set amount in the following weeks. So if in the first week you save 100, week two should have 200 and 300 for week 3 and so on. Do this and you will end up with Ksh137,800 by the end of the year. With this, you can pay for a vacation or bolster your emergency fund.
Since we are already in week 3, you might want to get started immediately and save retroactively from week one.
This saving challenge is also about saving in increasing amounts every month but the increments have to be a set amount. For those who are salaried, this can be an option.
Your savings amount can start at Ksh1000. So in January, you save Ksh1,000, February Ksh2,000. It goes up in Ksh1000 increments until you get to June and July when you’ll save Kshs 6000 for each month. Thereafter, it decreases by Kshs 1000 every month with Kshs 1000 saved in December. At the end of the year, you will have Ksh42,000.
Think a shilling saved can’t make a dent? Think again. If you take on this challenge, you’ll have to save money every day.
For starters, you will save Ksh1 on the first day, Ksh2 on the second, Ksh3 on the third. Get the drift?
On the last day, you will save Kshs 365. This means that in total you will have saved Ksh66,795. That is no small money! Of course, if you feel you can save with a multiplier greater than one then who is to stop you?
I know this sounds hard but you can make it fun as well. Pick a week, a weekend – whatever you will deem challenging but doable – and spend nothing. Of course, you have to make exceptions for bills.
The idea of this challenge is to save by not spending. You may have to find a work-around because you cannot buy a certain tool or resort to DIYs. You could invite the guys for an in-house hangout instead of going to the bar. This challenge could work well for you.
You can make a vow to yourself that every time you make a stupid financial decision, you'll put Ksh500 – or whichever denomination you prefer – in a jar or savings account. Penalize yourself when you pay a bill late, for example.
At the end of the year, it is you who will win anyway. I am sure you will be grateful if you have a lot of money. It will be attributed to the financial errors that you made in the year. If there will be no money in that jar then you will stay happy knowing that you used your money responsibly.
Do you smoke? Take a lot of fizzy drinks? Take a bottle or two of alcohol? Of course, there is a degree of a bad habit. Drinking soda does not come close to the smoking area. But taking too much increases your uptake of calories to unhealthy levels.
Whatever habit it is that you would like to drop, now could be the best time to decide to finally end that pattern of behaviour. As a result, you would be saving money you would have used to finance your bad habit.
Heck! You can decide to use the saved money for something fun as a reward to yourself for your efforts.
Just be sure that the reward isn’t the same thing you are trying to get rid of.
The spare change challenge helps you put away a bit more money without straining your budgeting plan some more. Every time you purchase something and get coins in return as change, you can put them into a jar.
Commit to not touch that money for some time (say a year) before adding them up to assess how much you have saved.
To some people, eating out takes a chunk of money out of their pockets. Though at some point last year, the Covid-19 pandemic caused a reduction in people’s ability to spend on eating out, it did not completely remove that line from many families' budgets because people started using food delivery applications.
If you want to save extra money, the No Eating Out Challenge might be the best challenge for you this year. As its name proposes, in this challenge you are not supposed to spend on take-out or make restaurant purchases for at least 30-days.
It wouldn’t be a bad idea to delete any delivery apps you may have on that phone of yours to remove the temptation to use them.
A money-saving challenge is a great way to challenge yourself and make progress toward creating for yourself a financial safety net, boosting your savings, and getting things that matter. Generally, these kinds of challenges are fun and motivating ways to keep you on track.
Whether you're planning to retire, planning for a holiday, or starting 2022 with a reset, now will always be a good time to start saving.
So choose a challenge, ask a friend or two to join you for accountability, and begin your journey towards your goal!