If you want a simple way to build savings, the 1p savings challenge could be a great start. This simple money-saving strategy could help you build your savings over time.
Setting aside just 1p per day and increasing the amount by 1p each day can save a sizable amount. Plus, it’s a great way to kick-start your saving habit.
In this article, we’ll discuss what the penny saving challenge is, how it works, and how you can make the most of it.
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What is the 1p saving challenge?
The 1p saving challenge is a popular money saving challenge. You make a minimal daily deposit and grow your savings over time. This challenge requires you to save 1p on the first day. But you don’t save the same amount each day (that’d just net you £3.65 for the year). You then add 1p to the amount you save each day.
Keep that daily incremental increase going for 365 days, and the savings grow significantly.
Breaking down the challenge in a month by month form, you will save:
| Month | Amount |
| January | £4.96 |
| February | £12.74 |
| March | £23.25 |
| April | £31.65 |
| May | £42.16 |
| June | £49.95 |
| July | £61.07 |
| August | £70.68 |
| September | £77.55 |
| October | £89.59 |
| November | £95.85 |
| December | £108.50 |
What are the benefits of the 1 penny money saving challenge?
The penny saving challenge has several benefits which can make it an excellent way to save money.
1. Encourages consistent saving
The 1p savings challenge can help you develop a habit of saving money. It encourages you to save a small amount of money every day, which can help you save a significant amount of money over time.
2. Teaches financial responsibility
The 1 penny challenge can help you teach younger family members about saving money. It also helps explain financial responsibility. You can teach them how to create a savings pot or a money box with the help of the 1p challenge.
3. Builds discipline
Saving 1 penny a day may seem like a small step, but it requires discipline and commitment to stay consistent. By taking part in the 1p saving challenge, you can build discipline and improve your money-saving skills.
4. Helps in achieving financial goals
The penny-saving challenge can be a great way to save money for specific goals. Whether you’re saving for a holiday, Christmas, or even a deposit for a house. By saving a small amount every day, you can reach your financial goals faster, easily, and effectively.
How to start the 1p saving challenge?
Starting the 1p saving challenge is quite straightforward. Here is a step-by-step process:
1. Set a target
Setting a target is a crucial step in the 1p saving challenge. Determine how much you want to save over a specific period and set your target accordingly. Having a target in mind makes it easier to stay motivated and committed to the challenge.
2. Get a jar (or a savings account)
Next, get a jar for the money. It could be a simple jar, piggy bank, or a decorative container which you love. Of course, if you’re more cashless, you can save money in an online savings account.
For this, you can try Monzo, an app-based mobile bank. Monzo allows you to automatically transfer increasing amounts into a separate ‘pot’ each day.
Whatever method you choose, a designated spot for your savings will make it easier to keep track of your progress.
3. Start saving each day
Once you have your target and jar ready, start saving pennies every day. You can either save 1 penny per day or choose to save more. Make sure that you are consistent with your savings and don’t skip any days.
Also read about: How to save money fast on a low income
How to get most out of the penny saving challenge?
1. Set a SMART goal
To start the 1p saving challenge, set a savings goal that is SMART. This stands for Specific, Measurable, Achievable, Relevant, and Time-bound. This will help you stay motivated and focused on your financial objective.
2. Start small
Starting small is the key to successfully completing the 1p saving challenge. You can begin by setting a small, achievable goal for yourself, such as saving 1p or 10p a day. As you get comfortable with the routine, you can increase the amount which you want to save each day.
This way, you won’t feel overwhelmed or discouraged by the amount you need to save every day.
3. Be consistent:
Consistency is the key when it comes to the 1p savings challenge. Try being consistent when it comes to saving a certain amount each day, whether it’s just 1p or more. If you’re doing it virtually, you can automate it. If not, set a reminder to add the amount to your jar each day, and don’t let yourself skip a day.
It may seem like a small amount, but over time it can add up a lot to your savings.
4. Involve others
If you want to get the most out of the penny saving challenge, try involving others. You can start a challenge within your family or friends or even join an online community. This can provide motivation, support, and a sense of accountability, helping you stick to the challenge.
5. Track your progress
To make the most of the penny saving challenge, it’s important to track your progress. You can use a spreadsheet, a chart or even a calendar to record your daily savings. Seeing your daily progress can motivate you to keep going and reach your savings goals.
Alternatives to the 1 penny challenge
There are many alternatives to the 1 penny saving challenge which you can choose from to save money. Here are a few of them:
1. 52 week savings challenge
The 52 Week Savings Challenge is a popular money-saving challenge. It involves saving an increasing amount of money each week. Start with £1 in the first week, £2 in the second week, and so on until you reach the last week.
You would have saved over £1,378 by the end of the year. This challenge can be a great way to gradually increase your savings and create a healthy saving habit.
2. No spend challenge
Another alternative to the penny savings challenge is the no-spend challenge. This involves cutting back on all non-essential spending for a set period of time.
To start a no-spend challenge, first, you’ll need to set some rules for yourself. These could involve not eating out, not buying clothes or accessories, avoiding unnecessary online shopping, etc. Depending on your goals, the length of this challenge could be anywhere from a week to a month.
How to stay motivated when taking the 1p saving challenge?
The 1p saving challenge is a great way to save money. But it can be hard to stay motivated (in the first few weeks especially). Here are some tips to help you stay motivated:
1. Use a visual tracker
Saving digitally? The satisfaction of watching a jar grow won’t be there. Using a visual tracker such as a chart or a spreadsheet can help you stay motivated. You can see how your savings are growing as you add more coins to it, which can give you a sense of accomplishment.
2. Celebrate milestones
Celebrating your milestones can help you stay motivated. For example, when you see that you have saved £10 or £50, treat yourself to a coffee or plan a fun day out. But don’t spend a huge amount of this extra cash while celebrating. Make sure to keep it within your budget when you spend money on it.
Conclusion
Saving money can be tough, but the 1 penny saving challenge can help develop a better savings habit. Tracking your progress, involving others, and setting targets can help you stay motivated. The key to these money saving challenges is to stay consistent and make savings a daily habit.
Disclaimer: The information given above is provided for reference only. This is not financial advice.