Use a Five Dollar Challenge to Easily Grow Your Savings

Posted On Jan 30, 2020 By admin With Comments Off

Here at The Penny Hoarder, we kind of have a thing for Abe Lincoln.

His face is profiled on our favorite copper after all.

But as much as we adoration our pennies, we also like learning Lincoln’s bearded pot on the front of the$ 5 statute. Because saving$ 5 statements is much more lucrative than hoarding pennies after all.

How to Save Money With the Five Dollar Challenge

The five dollar challenge is a simple money-saving strategy — one that doesn’t involve much ponder or try. You don’t have to do any math. You don’t have to review your past spend to figure out where to cut back.

All this challenge expects is for you to stash away every$ 5 statute you get as change. That’s it.

If you’re paying for something and the teller handwritings you back a statement with Lincoln’s solemn face, don’t use it to buy coffee or a inexpensive lunch from the drive thru. You’ve got to commit that$ 5 statement to your savings.

Depending on how long you participate in the challenge, you could end up banking a lot of currency. Five one dollar bill can add up abruptly. Precisely putting aside two$ 5 statutes a week will give you $ 520 in savings after a year. And since the amount is fairly nominal, your savings can change without even missing your$ 5 bills.

Where to Keep Your Money

Separating all your$ 5 monies from the rest of your spending money is key to succeeding in this challenge. Many kinfolks who participate in the$ 5 challenge cache their cash in flasks, envelopes or shoe boxes.

You can save a extend weigh of your offset or just wait until the end of your challenge to be surprised by the total.

If you don’t feel like preserving all that cash at home though, you can shape weekly accumulations into a savings account. Your savings will be insured, you’ll distance yourself from your hoard and you can even make interest — specially if you have a high-yield savings account.

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Participating in the Challenge When You Don’t Use Cash

If you’re used to swiping your debit card everywhere you go, that doesn’t mean the five dollar challenge isn’t for you. You’ll really “re going to have to” do a little extra work.

When you make a purchase, think about what mutate you would have received if you paid in cash. For instance, if your Target run totals to $84.25, you’d likely get a$ 5 greenback, a $10 proposal and 75 cents back if you paid with a $100 statute. Before you pull out of the parking lots, log onto your online banking account to transfer$ 5 to your savings.

To make it simpler, you could resolve to transfer$ 5 to your savings account every time you swipe your credit card. Or you could be more selective and only add$ 5 to your history when you make a specific purchase, like filling up your gas tank.

Another option is to, well, perform the switch to using cash — but do it just for your fun money expenditures. Stick with swiping your credit card to get groceries or stock up on toiletries, but repay with cash when you go to the movies or to the bar. Any$ 5 statement you receive in reform croaks — you approximated it — straight to your savings.

Customizing the Five Dollar Challenge

If squirreling away$ 5 proposals doesn’t work for you, you can modify your money-saving endeavor while still sticking to the basic premise of the challenge.

Save all the coins you get as change.( Piggy banks aren’t just for kids, you know .) Or you could setting aside all the$ 1 statutes you receive.

Pro Tip

Go digital with your challenge by using a micro-savings app. Now are a few of our favorite apps that help you save money little by little.

However, going with a smaller denomination of coin doesn’t mean you’ll be saving less. If you get various$ 1 bills back in modification more frequently than you get$ 5 monies, you have been able be brought to an end saving more.

Have a Goal for Your Savings

Whether you plan to stick with this savings challenge for a duet months or the whole year, it’s good to have a plan for what you’ll do with the money you save.

You could render something neat for yourself, like taking a much-needed vacation or buying something on your personal wish list. Or you could use the money for something that reflects your monetary purposes, like making a nice dent in your student credit or credit card balance.

However you decide to use your savings, having an end-goal in intellect can preserve you motivated to stay consistent — and to not dig into your accumulation before the challenge ends.

Nicole Dow is a elderly scribe at The Penny Hoarder.

This was originally published on The Penny Hoarder, which assistances millions of books worldwide earn and save money by sharing peculiar job opportunities, personal tales, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.