For many Kenyans, 2022 began with numerous New Year resolutions, including putting their finances in order. The desire to meet their financial goals means many people have to identify various investment and savings techniques, such as joining a money challenge.
Money-saving challenges are an exciting and fun savings strategy toward your short-term or long-term financial goals. It sets the pace, helping many people to stick to specific financial routines within a particular period. Many money-saving challenges go by a few simple rules, including:
Most money-saving challenges use simple creative methods such as saving your spare change and changing your spending habits. For instance, if you join a 'no eating out' money challenge, you can instead save that money towards a particular financial goal within a certain period.
There are many types of money challenges, including:
Anyway, 2022 is soon coming to a close, and had you joined a money challenge as it began, here are some of the things you would be having:
Most money challenges, including the Monthly and the 52-week challenge, can be the simplest way to create and bolster your emergency fund. Often, they start with an incremental basis, starting from the smallest amount and increasing each successive week or month.
The rule of thumb is that you end up saving about 3 to 6 months of your living expenses - an amount capable of enabling you to survive a similar number of months with zero income. The first thing would be to calculate how much a 3-month or six months worth of your living expenses is. Then decide on any of the incremental amounts you can save each week.
If your monthly expenses total Ksh 60,000, you should have roughly Ksh180,000 as your emergency savings by the end of the year.
In a Year’s time, using the 52-week’s saving challenge for example, it is possible to save that amount for emergencies and use the next year’s challenge to save for something else.
This is while working towards other savings goals independently since this challenge will ideally take just a small percentage of your take-home pay.
Read Also: 52-Week Savings Challenge: What It Is and How to Succeed
Excessive debt is the key culprit that can compromise your financial goals and lead to massive financial stress.
However, you may have erased your debt by participating in No-Spend challenges. If you are a typical over-spender, this money challenge might initially be difficult but worth it.
The rule is to spend on nothing except the essentials, such as food, medicine, and recurring bills. Any time you feel the urge to spend money, you calculate the amount you would have to pay and stash it into savings accounts meant to settle your existing debt at the end of the month. This particular money challenge has additional advantages:
What if you joined the 30-day No-Eating-Out challenge? You would have sufficient money to cater for that vacation or upcountry visit for your folks. A 100-day Not Eating Out money challenge demands that you do not eat out or order any meals during the 30 days you sign into the program.
It means you will purchase, cook, and eat all your meals at home, helping you save on expensive hotel food and delivery fees. You can create a holiday savings account to keep all the money you would have spent in restaurants or ordering into your home.
Many Kenyan parents grapple with school fees and shopping demands as the New Year begins. But this year would have been pleasantly different if you had joined the popular 365-day challenge.
Like most others, it works on an incremental basis, starting with Ksh 1 on day 1. Day 2 equals ksh.2, day 3 Ksh. Equals 3 and day 4 Ksh equals 4.
The sequence continues for an entire year, with your contributions increasing each day until day 365. Your total contributions translate into Ksh 66,795 on the last day, enabling you to pay for your child's school fees comfortably - or massively reducing the school fee burden.
A money challenge that would have helped you start a new side hustle at the end of the year is a 26-week money challenge. Here's how it works:
At the end of the year, many people desire to reward themselves for the hard work they would have put into the entire year. However, finding sufficient money to treat yourself can take time and effort.
A money challenge such as the Spare Change challenge can be your game changer. The Spare Change challenge works similarly to the Find Extra Money challenge. It involves saving any spare change or money you might find lying around the house.
Those loose coins you often find in your car compartment or your jacket have their rightful place with the Spare Change challenge.
Top up your savings with any spare change from the groceries or supermarket. You can also create extra money by minimizing your budget or downsizing your expenditures.
One of the money challenges you can use to fund your retirement savings account fully is the 52-week savings challenge. The weekly incremental savings plan can start with as little as Ksh.50. The second week equals Ksh 100, while the third week equals Ksh 150. The top-up amount for each week until you complete the entire 52 weeks.
Besides helping to boost your retirement savings, this challenge is excellent for increasing your financial confidence. You become a habitual saver for each week that passes.
You can also customize it such that while others are doing Ksh50 weekly, you amp on with Ksh100 or even more, depending on your financial ability.
It would be a different story now if you had joined a money challenge in 2022. Joining a money challenge has enormous benefits, such as helping to stick to better financial habits.
The orderly savings culture of a money challenge enables you to meet your financial goals. You also learn more about your relationship with money and improve on the weak areas.