When you remove home equity from the equation, the average American’s net worth is right around $26,000. This figure tends to increase as you reach retirement.
If you feel like you’ve got a long way to go before achieving your ideal net worth, it may be time to commit to saving more money. This can not only spark good financial habits, but you’ll worry less as you approach your golden years.
To help you reach your goals, it may be time to challenge yourself with one of these six money challenges. Take a look.
The Weekly Money Challenge
If you’re paid weekly, the best way to set up a money challenge is to also save weekly. With this challenge, you can save nearly $1,400 over the course of a year. Just think: by the end of the year, you’ll have built up a decent savings fund and you likely won’t even miss the money that you’re setting aside.
To get started, deposit a small amount into your savings account every week and build up from there. For example, you can deposit $1 week #1, $2 week #2, and so on until week 52 – when you deposit $52. By the end of the year, you will have contributed $1,378. The following year simply keep depositing $52 a week and you’ll add another $2,704 to your savings account.
The Monthly Money Challenge
For those who are paid every month, you might prefer to save monthly instead of weekly. It’s easy to set this up and, in order to save roughly the same amount as you would on a weekly basis, we changed up the numbers a little bit.
In the first month, for example, you can deposit $18. The next month that amount grows to $36. After that, you’ll continue increasing your monthly deposits by $18, arriving at the amount of $216 for the 12th month. All told, you will have saved $1,404 over the course of a year. For the following year, contribute $216 each month and you will have saved up another $2,592.
The Yearly Money Challenge
If you are already budgeting your weekly, bi-weekly, or monthly checks and can’t manage to come up with an extra hundred dollars or more of savings each month, you might want to instead try to dump lump sums into your account every spring when you get your tax refund. The average refund is a little over $2,700, so putting your refund into your savings account – instead of spending it – would be a smart way to earmark your extra funds.
The No Spend Money Challenge
You have likely seen these types of challenges before. They encourage you to go a day, a week, or longer without spending any money. This indeed can work but sometimes you overspend before or after your spending fast. Here’s a different take on it.
During the no spend challenge, every time you’re craving a latte, or want to spend on something that isn’t entirely necessary for survival, transfer that same amount into your savings account. Try doing this for one week each month. You may notice that your savings account is slowly beginning to increase.
The Spare Change Challenge
Collecting your change in a jar on the dresser used to be easier. But, now that most transactions are done electronically, you’re probably not carrying home a pocket of coins anymore. Fortunately, there’s a great way to dump your spare change into an actual savings account.
With a Chime account, for example, your purchases can be rounded up to the next dollar, and that spare change will automatically go into your savings account. This can ultimately help you grow your net worth and you won’t even have to think about it.
The Tip Yourself Challenge
There are two types of people: those who hire people for jobs and those who consider themselves DIYers. The do-it-yourself crowd is often trying to save money. But, what if you paid yourself for these tasks?
For this challenge, give yourself a tip each time you do a job yourself. It may not seem like much, but you’re saving money by not paying anybody else, plus a $20 “tip” here and there can add up to hundreds or more over the course of a year.
Combine Challenges to Save Even More
It doesn’t make much sense to do both the weekly and monthly challenge. But, you can always combine one of these with the tax refund challenge. Or, use the automatic savings features from Chime to help boost your savings accounts even more.
After a year of using any of these challenges to help you save, you’ll be well on your way to achieving your savings goals. You can bank on it.