THE start of a new year is a good time to assess your budget and kick start a new savings habit.
If one of your resolutions for 2022 is to get your finances in order, a simple challenge could help you save some cash.
There’s an option for all budgets, as some of the saving tips just ask you to put away pennies.
Others ask you to save larger sums, so make sure you check what you can afford before you kick off.
Different schemes will work best for different people depending on their circumstances – the idea is to make saving money more manageable.
Some of the challenges advise starting on New Year’s Day, but if you’ve left it until now don’t worry.
If you start today, you’ll only be a few days out and you could easily make up the difference.
While it might seem easier to stash small amounts in cash, you should think about whether a savings account would be better suited.
This is because you won’t earn any interest on savings stored as cash.
We explain how some of the most popular savings challenges work.
1p savings challenge – £670
The 1p savings challenge could help you save up to £670 if you do it for the full year.
You start by saving 1p, then increase the amount you save by 1p each day.
So as day one is 1p, day two means you stash away 2p, and the next day it’s 3p and so on.
By day number 365, you’d be adding £3.65 into the account.
So through autumn and winter, you’d be stashing away roughly the equivalent of the price of a coffee each day.
If you think you could give up your daily caffeine fix – or another equivilant example – you could be on your way to saving hundreds of pounds.
52 week challenge -£1,378
The 52 Week Challenge works by getting participants to put aside £1 for the first week, £2 for the second, £3 for the third and so forth, until the end of the year.
The amounts start small, but towards the end of the year you might find the weekly savings target grows too big.
For example, you’ll have to put away the largest sums around Christmas with a whopping £202 in total required in the final four weeks of the year.
So before you start, consider whether it could be too much of a stretch at an already expensive time of year.
If you can stick to it, though, the pay off is huge as you’ll pocket a whopping £1,378.
365 day challenge – £1,456
If the 52-week challenge seems a little daunting, you might prefer the 365 day challenge.
You’ll set aside £1 on Sunday, £2 on Monday, £3 on Tuesday and so on, all the way up to saving £7 on Saturday – the largest daily amount of the week.
This should give you a weekly total of £28 saving – adding up to £1,456 over the cost of the year.
100 envelope challenge – £5,000
This is a faster way of saving a large amount of money, but it requires a bigger pot of disposable income.
The ‘100 Envelope Challenge’ can save you £5,000 in just 100 days.
You could even stretch it out over the whole year if your budget allows.
To get started, you’ll need 100 envelopes, each marked 1 to 100.
Place all your envelopes into a box and pick one out each day. Then you should pop the amount of cash it specifies inside the envelop.
For example, if the envelope is marked with 10, you place £10 inside the envelope.
If you stick with the challenge for the full 100 days, you should have saved £5050.
Cash stuffing – varies
Cash stuffing is a budgeting technique that can help people save up.
It’s different from the other challenges as there’s no set target or amount you have to set aside each day.
Instead you should look at your budget and work out how much money you can afford to put towards your savings goals.
Then you pop the cash into envelopes split into different categories such as holidays, eating out and clothes shopping.
The act of saving cash can work well for people who prefer to see their money piling up and avoid spending it.
But you will miss out on gaining interest, so you could consider whether a digital savings pot would work better for you.
This would also keep your money secure, and prevent it getting lost or stolen.
Once you’ve started saving, make sure you keep up the habit by checking out our seven tips to boost your cash pot.
Some easy switches can help you save more than £7,00 this year.
If you need some extra income to help meet your financial goals, there are ways of making money from home such as doing odd jobs or selling things on eBay.
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