Even when you know that you need to change some aspect of your financial behavior (like saving money faster or cutting your spending), knowing how to make that change — from setting the rights goals to holding yourself accountable — can be extremely difficult.
That’s where a personal finance “challenge” can help.
Challenges are pre-planned regimens and/or specific goals designed to help you break your current habits.
Most people are familiar with this concept thanks to popular health and fitness challenges like Whole 30, in which you commit to eliminating a wide swath of potentially unhealthy foods from your diet for a full month.
But the concept also works when it comes to saving, budgeting and a host of other financial activities. Embracing one or more of the challenges below can be one of the quickest and most effective ways to shake up your routine and bring about meaningful improvement.
Here are some of the best personal finance challenges you can start today.
#1. Grow Your Net Worth by $1,000 in One Month
How it works: The goal is simple: increase your income and savings by $500 each in 30 days (which may be easier than you think).
On the income side of the equation, check out our post on side hustle ideas.
On the savings side, this post offers 10 research-backed savings tips that can easily add up to $1,000 in the first month.
#2. Fully Fund Your Emergency Account in Six Months
How it works: Nearly 30% of Americans have no emergency savings, and only a small portion of the population has enough money set aside to cover their expenses for three months. In fact, according to the Federal Reserve, almost 40% would be unable to cover an unexpected $400 expense without selling an asset.
Not having a sufficient emergency fund can lead to long-term financial hardship by forcing you to take on high-interest credit card debt when faced with even relatively small expenses, like a car repair or a minor injury.
My guide to building an emergency fund goes into detail about what they are, why you need one, and how to build one fast. By following the steps laid out in the post, you should be able to save enough to cover 90 days of expenses in just six months.
#3. Start by Saving $1 Per Week, Then Slowly Up the Ante
How it works: You may have heard of the 52-week challenge. The premise is simple but powerful: if you save $1 the first week, $2 the second week, and then save an additional dollar every week thereafter for the rest of the year, you’ll end up with $1,378 in your savings account at the end of the challenge.
The Washington Post has a great piece about why the 52-week savings challenge works.
One thing to note about this challenge is that if you start it early in the year, you’ll be setting aside the biggest chunks of money at the end of the year — smack dab in the middle of the holiday season. That might not be ideal for every budget, so if it might be a concern for you, consider reversing the order: save $52 this week, $51 next week, and on down the line.
#4. Increase Your 401(k) Contribution by 1% Every Month
How it works: As with the 52-week money challenge, the goal here is to break down the process into segments that are so small and manageable that they’re essentially painless.
If I told you to ramp up your 401(k) contribution by 10%, you’d probably scoff at how that would affect your paycheck and budget. But would you even notice 1%?
The ideal way to set this challenge up is to calculate the total additional percentage it will take to reach your maximum contribution. Then, you can tweak the amount and intervals based on what works for you.
The amount you add each month doesn’t matter, nor does it matter if it takes 12 or 24 months; what matters is that you have a specific schedule that you know you can stick to.
#5. Try the Zero-Based Budgeting Technique
How it works: The goal of zero-based budgeting is to account for every dollar that comes into and goes out of your life. You start by allocating a certain amount of your income to different categories, and then, over the course of the month, you assign every expense to one of those categories.
The purpose of this is that it prevents you from exceeding your pre-defined budget in any particular area. Then, you can take the surplus funds and apply them to your highest priority financial goal.
Here’s a great free resource on the technique: A Zero Based Budget – Boring and Effective.
#6. Use Only Cash for 30 Days
How it works: Only pay for things in cash for a full month. You can choose a certain category of spending — for example, groceries, eating out, entertainment, etc. — or you can apply this to your entire budget.
Skipping credit cards for a period of time can help you avoid high-interest debt, but you shouldn’t be using credit cards in the first place if you can’t pay off the full balance every month. So the real benefit of this challenge is that it makes you more aware of what you’re buying and what those things cost.
Credit card spending is nearly frictionless — it doesn’t feel like you’re handing your money over to a merchant. But it’s much more painful to part ways with a stack of cold hard cash… and forcing yourself to do so might help you see your spending habits from a different perspective.
#7. Go a Weekend Without Spending a Penny
How it works: You don’t always have to spend money to maximize your enjoyment on the weekend. To give you some ideas, The Simple Dollar has a great list of 100 free activities.
This is an easy challenge to start with, but you may be surprised how much it helps if you’re also pursuing the first two challenges on this list (growing your net worth by $1,000 and building an emergency fund).
It’s easy to get into the habit of spending a sizable chunk of your disposable income on weekend activities, and cutting even a little bit of that out can make a big difference in our overall budget.
#8. Sell Something You Don’t Need Every Day for a Month
How it works: Your goal is to list one thing every day on sites like Craigslist. If that sounds crazy, you can lighten up the workload by committing to only weekdays, or even to just once a week.
What I learned when I tried this challenge was that I had a wealth of idle assets waiting to be turned into cash — stuff I had made a mental note to sell, but then just never got around to liquidating.
But after a while, I ran out of those items and the challenge forced me to sell a few things I hadn’t considered getting rid of… and I didn’t miss them at all. On the contrary, I appreciated the surprisingly big infusion of extra cash that the challenge generated.
Other Quick Tips for Boosting Your Savings
- Round up your purchases and invest the spare change with Acorns, or use your spare change to pay down your debt with Qoins.
- Stop overpaying on Amazon by using Capital One Shopping and Honey, two free browser extensions that will help you see if lower prices are available when shopping online. Learn more in our Capital One Shopping review and our Honey review.
- Get cash-back on many of the things you already buy with Rakuten and Swagbucks.
- Automate your savings with Digit, an app that uses AI to determine how much you can afford to set aside.
Summary: Challenge Yourself to Improve
With each of these challenges, the specific amounts of money and techniques matter much less than the simple fact that you’re committing to a structured plan of action.
For most people, the hardest part of changing a habit is getting started. The first few steps in a new direction tend to be the most disorienting, but if you can get on the right path you’ll find that sticking with it gets easier and easier the farther you go.
So whether you’re choosing to tackle a savings challenge to help build your emergency fund or a spending challenge to wrestle your budget into submission, feel good about starting small and then trust the process — your piggy bank will thank you for it.
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