Wednesday, September 2, 2020

What is the 52-week Savings Challenge?

You’ve probably heard about the big craze at the end of last year – the 52-week savings challenge.

After it being all over your favourite social media such as Facebook, Twitter and Instagram, you might be thinking you’re a few months behind. But the good news is, it’s never too late to start the challenge. And by this time next year, you could have saved yourself a small fortune.

So, what is the 52-week savings challenge? Here’s everything you need to know.

The 52-week savings challenge is actually a super simple concept. All you have to do is put a small amount into a separate savings account every week and gradually increase this amount each week.

To start with, pick a day of the week that works best for you and do your very best to stick to it. Most people will likely choose a Monday as it’s the start of the week and just after the weekend. However, if for example, you get paid weekly and it’s on a Thursday, then perhaps that day could be ideal for you.

Secondly, you should set up a separate savings account specifically for this challenge. This will allow you to track the progress of the challenge much easier and can be a great motivator to stick to your weekly amounts.

Then it’s up to you to begin the challenge and stick to it for a year! Most people start with a £1 and increase the amount by an additional £1 every week. For example, for week 1 you should put away £1. Then week 2 will be £2. Week 3 is £3, and so on. Then when it comes to the same time next year, you’ll be putting away up to £52 per week and, providing you’ve stuck to this amount for the entire year, will end up with £1,378 in your account which can be a great amount to kickstart your longer-term savings plan.

When the year is up, you can decide what to do with the extra money you’ve managed to save. Whether it’s buying yourself a little treat for your commitment, keeping it as a backup for life’s emergencies, or maybe even using it as the basis for further saving (such as a for a deposit for a property) there are many possibilities.

Of course, you should always set a target that you know you can afford. So if this means increasing by 50p instead of £1 each week, or maybe having to skip a week to cover a vital expense, then you should always do so. Likewise, if you’re in a stronger financial position than expected, then perhaps consider putting a little more in your savings pot if you’d like – after all, you can never have too much in savings, right?

Having savings in place is the ideal way to be able to overcome those unexpected expenses. If however, that rainy day has come a bit too soon, then a credit option such as payday loans could be an option for you as long as you can afford future repayments.

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