THE new year is always a good time to assess your budget and kick-start a new savings habit.
Plus, savings challenges are a great way to get into the routine of putting aside your spare change.
Savings challenges can be a handy way to get into a routine of setting aside cash
There are several major trends you can follow that could see you stash away hundreds if not thousands of pounds by the end of the year.
The right one for you will depend on how much you want to save and what you can afford to put aside.
But there’s an option for all budgets, as some of the saving tips just ask you to put away pennies.
Others ask you to save larger sums, so make sure you check what you can afford before you kick off.
Different schemes will work best for different people depending on their circumstances – the idea is to make saving money more manageable.
We explain how eight of the most popular savings challenges work.
1p savings challenge – £672
Anyone can take part in the 1p savings challenge and the idea is pretty straightforward.
You start by saving 1p, then increase the amount you save by 1p each day.
So as day one is 1p, day two means you stash away 2p, and the next day it’s 3p and so on.
By day number 365, you’d be adding just £3.65 to the account.
If you started on January 1, 2024, and kept it up, you’ll have saved a grand total of £671.61 by December 31, 2024.
Don’t worry if you didn’t start right at the beginning – just add up the total number of each day missed and start from there.
Monthly savings challenge – £780
This 12-month savings challenge encourages you to save one lump sum every month.
Savers begin with £10 and gradually increase each month. Multiply the month by ten to calculate the savings you need to set aside.
For example, you’ll save £10 in the first month (January) and £20 in the second month (February).
Do this for the whole twelve months and you’ll have £780 sat in your account at the end of 2024.
52-week challenge – £1,378
The 52-week challenge works by getting participants to put aside £1 for the first week, £2 for the second, £3 for the third, and so forth, until the end of the year.
The amounts start small, but towards the end of the year, you might find the weekly savings target grows too big.
For example, you’ll have to put away the largest sums around Christmas with a whopping £202 in total required in the final four weeks of the year.
So before you start, consider whether it could be too much of a stretch at an already expensive time of year.
If you can stick to it though, the payoff is huge as you’ll pocket a whopping £1,378.
You could always flip it and start with the biggest amount (£202 a week) and then get smaller – it might be worth making a chart so you can keep on top of figures.
26-week challenge – £1,378
This adaption of the 52-week challenge is ideal for people who get paid fortnightly.
As you can see, the savings outcome at the end is the same but how it works is a little more complicated.
The idea is that you start on week two and save £3 (so that’s the £1 from week one, and the £2 from week two), and then in week four, you’ll save £7 (week three and four).
This may make it harder to follow, but it can help spread out your savings.
365-day challenge – £1,456
If the 52-week challenge seems a little daunting, you might prefer the 365-day challenge.
You’ll set aside £1 on Sunday, £2 on Monday, £3 on Tuesday and so on, all the way up to saving £7 on Saturday – the largest daily amount of the week.
You then restart the process on the next Sunday.
This should give you a weekly total of £28 in savings – adding up to £1,456 over the cost of the year.
The fiver challenge – save £7,000
The fiver challenge is one of the most hardcore savings tests but it’ll leave you rolling in it if you succeed.
It works wonders for those saving for a milestone, like a home deposit, wedding, car, or another big purchase.
To make this challenge more achievable, you can take it on with a partner – so each of you save £2.50 to begin with.
This challenge works the same as the 52-week challenge, but you go up in multiples of £5 rather than £1.
So you save £5 in week one, £10 in week two, and up to £260 in week 52.
Round-up challenge
The round-up challenge means you round up money you’ve spent and put that extra cash away into savings.
For example, if you’ve bought something that cost £19.30, then you’ll be able to spend £20 and you’ll have 70p in savings.
It might not sound like much but if you’re doing this with every transaction then it adds up.
Some banks will allow you to do this via your online banking app, so check with whoever you bank with.
Money mistake jar
With a money mistake jar, you can make things more personal.
The idea is that you challenge yourself not to do something, or to not make a “mistake”.
For example, maybe you want to challenge yourself to go running three times a week, or maybe you want to stop buying takeaways or simply stop swearing.
These can be your “mistakes” and if they’re not fulfilled then you can put money into the jar.
How much you put in each time is completely up to you.
Where should I keep my cash savings?
If you prefer things the old-fashioned way then by all means, use jars and pots to save your money.
But it might be worth popping it into a savings account so you’ll gain interest.
Your bank may also offer “pots” within your account so that you can keep your savings separate from other money and earn extra interest.
If you do opt for a savings account, check out easy-access accounts which allow for fee-free withdrawals.
For example, Metro Bank’s Instant Access Savings Account pays 5.22% in interest on all balances between £0 and £2million.
You can withdraw your funds whenever you choose without charge but may have to give notice if you need to make a cash withdrawal worth over £1,000.
Visit comparison websites such as MoneyFactsCompare, Go Compare and MoneySupermarket to help find the best savings account for you.