It can be difficult to build a healthy savings habit during financial stress. For this reason, nearly half of American adults have $500 or less in their savings accounts. According to a GOBankingRates survey from November 2023, they are susceptible to unexpected expenses.
But what if you could start small and watch your savings grow steadily over time? Enter the biweekly money savings challenge.
What is the Biweekly Money Savings Challenge?
By gradually increasing your savings amount every two weeks, this challenge is a fun and flexible way to build your savings habit. With its small size, it is easily incorporated into any budget. Even better? When you’re done, you’ll be surprised by how much money you’ve accumulated.
Here’s how it works:
- Start small. Start with a manageable amount, such as the cost of a cup of coffee from your favorite cafe.
- Gradually increase. Your contribution should be increased every two weeks by a set amount, like $5.
- Watch your savings grow. With each passing week, you’ll save more and more.
Example Biweekly Savings Schedule:
It is common for people to start with $5 and increase it by $5 every two weeks. Using that pattern, here’s what your savings might look like:
- Weeks 1-2: $5
- Weeks 3-4: $10
- Weeks 5-6: $15
- Weeks 7-8: $20
If this pattern continues, you’ll save $455 by the 13th pay period. Following this challenge for a year could save a solid $1,655!
The Benefits of the Biweekly Money Savings Challenge
Beyond building a financial cushion, the biweekly money-saving challenge offers numerous benefits:
- Enhances financial awareness. By tracking your biweekly contributions, you gain a deeper understanding of your income and spending patterns.
- Develops financial discipline. Consistent saving teaches you financial discipline and money management.
- Assists in reducing debt. In the long run, biweekly savings can accelerate debt repayment, resulting in more income.
- Breaks the paycheck-to-paycheck cycle. By building a savings buffer, you can breathe easier and avoid depending on your next paycheck.
- Empowers goal achievement. The sight of your savings growing fuels your motivation and pushes you towards financial success.
How to Make the Biweekly Money Savings Challenge Work for You
One of the best things about this challenge is how customizable it is. You can adapt it based on your unique financial situation by following these steps:
1. Determine your savings goals.
Your first step should be to identify your specific savings goals. Would you like to:
- Build an emergency fund. Ensure you have enough money to cover your living expenses for 3-6 months.
- Save for a down payment. Find out the average down payment in your area and set a goal based on that.
- Pay off debt. Build up your funds to pay off high-interest debt.
- Invest for the future. Put money toward long-term goals like retirement.
2. Calculate your biweekly savings amount.
Identify how much you can set aside every two weeks and be realistic about it. Being consistent is critical, so start small and increase your comfort level as you become more comfortable. If you are starting out — you should aim for $10-20.
3. Pick a challenge for biweekly savings.
One of the advantages of the Biweekly Money Savings Challenge is the versatility of the program. You can choose from a variety of structures.
Effortless growth: the 26-week biweekly challenge.
During 26 biweekly pay periods, you will gradually increase your savings. Start small, say with $5, and add $5 every two weeks. By the end, you’ll have saved up a lot! I’m talking about $1,755!
Simple and steady: the $20 money-saving challenge.
This straightforward approach is ideal for beginners. Set aside $20 every two weeks. If you follow this plan consistently, you’ll have $520 saved at the end of the year.
Tailored savings: the percentage-based challenge.
You can adapt this challenge to your income level. Save a percentage of your paycheck (say 5%) every two weeks, then gradually increase it (maybe to 6%). This approach encourages you to save consistently and grow your savings over time.
Budget-friendly feasts: the budget meal planning challenge.
Enjoy grocery savings and dining out for less! How? Every two weeks, plan and cook delicious, budget-conscious meals at home. Time and money can be saved by researching recipes, shopping smart, and batch cooking.
Surprise savings: the random amount challenge.
Are you looking for some fun and flexibility? During the Random Amount Challenge, you save a different amount every two weeks. Try drawing amounts from a jar or using a random number generator.
Your savings will increase, and your financial future will be more secure with the help of these challenges.
Do you want more options? Take a look at these popular challenges:
- 52-week money challenge. You can save as much as $52 a week by starting with $1 and working your way up!
- Reverse 52-week challenge. For those with high initial motivation, start saving more each week and save less overall.
- Incremental savings challenge. This challenge is similar to the 52-Week Challenge, but the increase is weekly instead of yearly.
- The pantry challenge. Don’t buy new groceries until you’ve used up everything you have.
- No-spend challenge. During a set period, avoid non-essential spending.
- 100 envelope challenge. Put random amounts in 100 envelopes (based on the envelope number) and watch your savings grow.
Finding the right challenge for you.
There’s no one-size-fits-all approach. Therefore, take into account your finances, income level, and current saving habits when choosing a challenge. Initially, save a manageable amount, then gradually increase your savings.
Also, don’t be afraid to try different structures until you find the one that fits your lifestyle.
4. Automate your savings.
If you have a checking account, you can set up automatic transfers to your savings account every payday. Setting it and forgetting it eliminates the temptation to spend the money and ensures constant savings.
5. Track your progress.
You can feel extremely motivated when you see your savings grow. With that said, here are some methods to consider:
- Savings tracker. To visualize your biweekly savings and deposits, create a chart or spreadsheet.
- Budgeting app. Many apps integrate savings goals and provide progress reports.
- Notebook. You can motivate yourself by simply reminding yourself of your progress.
6. Find your savings triggers.
Take note of situations that cause impulse spending. For instance, you could browse online stores during lunch breaks or grab a coffee in the morning. By turning these triggers into savings triggers, you can put them to good use. Put that money to better use by saving it instead of buying a latte.
7. Turn it into a social challenge.
Take part in the challenge with a friend or family member. Having a partner who supports you can boost your accountability and make the experience more enjoyable.
8. Reward yourself.
It’s important to recognize milestones when they are reached — no matter how big or small. Save for specific goals and treat yourself for achieving them with small rewards. By reinforcing positive behavior, the momentum continues to build.
9. Be flexible.
Life is unpredictable. Despite a setback in your finances, don’t give up. Once you’re back on track, adjust your savings amount temporarily.
10. Consider high-yield savings accounts.
Put your challenge funds in a high-yield savings account to maximize your savings. In a traditional savings account, you can earn anywhere from 0.01% to 0.35% on your money. High-yield savings accounts, however, earn much more. The APY on some HYSAs is currently between 3% and 4%, sometimes even higher.
Additional biweekly money-saving hacks.
To boost your biweekly savings, here are some additional tips:
- Track your expenses. Find areas where you can cut back and redirect that money towards savings.
- Challenge yourself. Can you find cheaper entertainment alternatives for two weeks or cook more meals at home? You can put the savings right into your biweekly challenge.
- Sell unused items. You can declutter your home and turn unwanted items into cash through online marketplaces or garage sales.
- Utilize windfalls and bonuses. If you get a bonus or tax refund, consider directing a portion of that money toward your biweekly challenge.
- Take advantage of cash-back rewards. Spend your credit card rewards on your biweekly savings and channel those earnings into those savings. Just don’t forget to use your credit cards responsibly.
- Negotiate your bills. Look at your cable, internet, or phone bills. A quick call can often result in lower rates, allowing you to save money.
- Don’t miss out on discounts. Look for coupons and promotions before buying anything. Adding every dollar saved to your biweekly challenge makes it easier to reach your goal.
- Review and adjust. Track your progress and adjust your biweekly saving amount or structure as needed. Adapt your challenge as your income or financial goals change to ensure it remains effective.
Conclusion
Completing the Biweekly Money Savings Challenge can help you gain control over your finances and achieve your financial goals. By incorporating these tips and tailoring them to your specific needs, this challenge can help you gain peace of mind.
You can save significant amounts of money over time by taking small, consistent steps.
FAQs
How can I start a biweekly money-saving challenge?
Set a savings goal, determine your biweekly contribution, create a dedicated savings account, and automate your savings.
Do biweekly money-saving challenges have any potential drawbacks?
Although biweekly money-saving challenges can boost your savings, they can have some potential drawbacks as well:
- Tight budget. Finding extra money to save every two weeks can be challenging when your budget is already stretched thin. For the challenge to be successful, you might need to cut back on other expenses.
- Not flexible. In some biweekly challenges, the amount you save increases each time. When unexpected expenses arise, this can be challenging.
- Discouragement. A couple of missed payments can derail your progress and discourage you.
- Not a long-term plan. There is a possibility that the challenge itself might not be a sustainable long-term savings strategy. After the challenge, you’ll need a plan to continue saving.
To mitigate these disadvantages, follow these steps:
- Be realistic. You should choose a challenge that requires you to save a certain amount every two weeks.
- Track your progress. It can be motivating to see your savings grow.
- Allow for flexibility. Adjusting your contribution for a pay period is okay if something unexpected happens.
- Combine it with a budget. Create a budget while you are participating in the challenge to help you manage your money effectively.
Money-saving challenges can be helpful tools, but it’s essential to know the potential drawbacks and ensure they work for you.
What if I miss a payment?
Don’t worry! Consistency is key, not perfection. You just need to get back on track with your next paycheck.
How can I stay motivated?
To stay motivated while you save, consider your “why.” What is your goal? Vacation, emergency fund, college?
It’s also important to celebrate milestones, no matter how small they may be. For extra support, you may want to partner with someone.
Can I adjust the amount I save in the challenge?
Depending on your income and comfort level, you can always adjust the amount.
Image Credit: Karolina Grabowska; Pexels
