The 365 Day Money Challenge Will Save You $668, a Penny at a Time

365 day save money challenge

The 52 week money challenge has gained quite a lot of popularity as a way to save money during the year, but it’s not the only way that one can save money. I had a good heart-to-heart talk with a woman who told me that she loved the concept of the 52 week money challenge, but she simply couldn’t do it. She explained that each week when she needed to put aside the money for that week, she would panic. The first couple of months were okay because the dollar amounts were low, but as they started to increase, the weekend became a time of terror because she knew she needed to put away money that she didn’t have. She ended up giving up because the challenge was causing more stress than it was worth. She asked me if I knew of a different challenge that might be able to help her.

I didn’t know of any, but the more I thought about it, it became clear what she needed. She liked the concept, but dreaded when it was time to put money away, because she didn’t have it when the week ended. What she needed was a challenge that forced her to save money before it was gone. She also needed a challenge where the amount of money she was supposed to save was small until saving became a habit. This would help so that she didn’t panic. The idea I came up with was the 365 day money challenge.

The concept of the challenge is simple. There are 365 days in the year. Every day before you go out, you need to pay yourself first. This is vitally important. The panic the woman had was because she didn’t have the money to save each week because she waited until the end to pay toward the challenge. What she needed to be doing was paying herself first.

The second important point is that until paying yourself first becomes a habit, it needs to be extremely easy to do. They say it takes three weeks to form a habit, so it’s important to make saving as easy as possible for those first 21 days. Longer is even better.

This is how the challenge works. Each morning when you get up, you need to pay yourself some amount before you do anything else. The payment can be anywhere between a single penny to $3.65. Once you have made that payment to yourself, you “x” out the box on your chart. Your next payment the following morning can be any of the remaining amounts on the chart. You continue to do this each and every morning for the entire year. When you are done, you will have saved $667.95. Even better, you will have formed the essential financial habit of paying yourself first which will be an asset the rest of your life.

365 Day Money Challenge (click on image to print)

365 Day Saving Money Challenge

There are a couple of important steps that go along with the challenge. First, after printing out the challenge sheet, you need to place it somewhere where you’ll absolutely see it each and every morning, someplace like on the mirror in your bathroom. It needs to be visible so that it’s in your face each morning so that it can never be accidentally forgotten.

The second is that you physically need to make the payment each and every morning. You need to go to your purse or wallet and actually place the amount you decide to pay yourself that day into a jar (or other container) which is specifically for this challenge. That payment is being paid to yourself, and it’s just as important as any payment you make to a store, bill or service. In fact it’s the most important payment you’ll make each day because it’s to yourself for your future benefit.

There are two huge advantages to this challenge over the 52 week money challenge for those who have struggled to get their finances in order. The first is that you’re starting with such small amounts that anyone, no matter what their current financial situation, can participate in it. If all you can do is pay the absolute minimum amount each day for the first month, you’re only out $4.65 for 30 days. There is nothing that is holding anyone back from trying the challenge except themselves.

The second main advantage is that this challenge is done on a daily basis. It requires you to think about saving every day. Even though the amount that needs to be saved isn’t much, the process of thinking about it will cross your mind each morning as you pay yourself. By the end of the year, paying yourself and saving money each day will be a natural part of your day. When you are only thinking about saving once a week, it can turn into a situation where saving money is only thought about at the last minute at the end of the week, and the entire process never gets instilled as a habit.

If you have attempted the 52 week challenge and failed (or you know a friend that has), I think you should seriously consider trying this challenge. $668 is a good start to an emergency fund, but even more importantly than that, you’ll have put yourself in the position to save much more money in the following years. If you do attempt this challenge, it’s still worthwhile following the 2014 Savings Challenge and 2014 Making Money Challenge as both will give you good ideas on how you can afford to make the higher daily payments.

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28 Responses to The 365 Day Money Challenge Will Save You $668, a Penny at a Time

  1. creditcardfree says:

    Nice idea. Not sure how practical the small amounts are when you end up needing to have change available every day to cover your deposits to the fund. I use a debit card so much I rarely have cash on hand.

  2. NANCY MARTIN says:

    I can transfer to my savings account with no fees, so i can sit down once every day and deposit the money to my savings account 🙂 I think it is a great plan 🙂

  3. Teri Su Garske says:

    Me and two co-workers are doing this plan! Thanks for posting the chart and idea! Wish us Good Luck!!

  4. jeffrey says:

    Great! Wishing you great luck with it and hope to hear about your progress.

  5. Julie says:

    Love this plan, going to do it and stick to it for the year in Jesus name. Amen

  6. jeffrey says:

    Wishing you the best of luck with it.

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  8. creditcardfree says:

    I’m glad you are able to move amounts that small.

  9. Buck Burch says:

    Actually, and even better, if you could deposit that change each day into a high-yield savings account (currently 0.85% annual yield) compounded daily, it would leave you with $906.50 at the end of the year; an additional $238.55 more than what you’d have sitting in a cookie jar).

  10. petesake says:

    Actually, you are way off on that number. I’m not sure how you calculated so you could get $233.55 from an interest rate of less than 1 percent, but at 1% if the entire $668 was in the bank account from January 1st, the total would only be and extra $6.68. Still better than nothing, but not quite what you projected.

  11. Buck Burch says:

    petesake, actually, I am correct. If you have 1% compounded annually, then you would be right, but I said “compounded daily”. This makes a huge difference. I’d be happy to send you an excel spreadsheet that shows how this works if you’d like.

  12. Buck Burch says:

    petesake, I went back to check the figures on the spreadsheet. The percent function was automatically changed to a whole number, so you are correct. Sorry for the confusion.

  13. Buck Burch says:

    See apology below

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  15. Minny says:

    I think this is a great idea and will work differently for different people.

    My poor mother was very bad with money and when her dog became ill I paid the vets bill and it was not cheap. I said to her to take out insurance because I knew that she would pay that. The wretched vet dissuaded her, he said just put £5 a week away and next time the money would be there – I could have throttled him. Mum did this for about three weeks before she ‘needed’ the money which she knew was there in the drawer. The next time the dog was ill guess who paid? I did.

    This rambling story says that for some people the saved money has to be ‘out of sight out of mind’. This is why the idea of putting the saved amounts into a savings account is a good one!

  16. cashcow says:

    I’m going to recommend this to a relative who can’t swing the 52 week challenge and is discouraged about trying an altered version (basically, “whatever you have left up to that week’s amount”; some people don’t get past $10 or $12 per week, but it still adds up!).

    A note about making transfers to your savings account: all of my accounts limit the number of transfers that can be made (in or out, or both) per month. Before making daily transfers, find out what your accounts’ limits might be. You wouldn’t want to get a $10 fee on day 7. If you’re limited, consider tallying some way that you can’t ‘cheat’ on, and then make weekly transfers. Maybe keep a few bucks’ worth of change to move between two jars. At the end of the week, count up your savings, transfer that amount, and then put those coins back in the original jar and start over. You’re still working on this habit and keeping yourself accountable without needing endless amounts of change or to make daily small transfers. Just some thoughts I had. As for me, I may add this to my 52 week challenge. (Itself modified since I’m limited to how many transfers I can make. I keep an easy calendar so I know how much to add to my scheduled transfers.)

    Thanks for coming up with this. It’s a great (nearly) excuse-proof system for those intimidated by, or who can’t swing, the 52-week plan. Something I noticed about your chart, though – you have 366 squares. You have a duplicate $3.44 (bonus!). 🙂

  17. jeffrey says:

    Error noted…will get that fixed

  18. Jo says:

    I am able to transfer small amounts of money from my checking to savings account at USAA. I guess that as long as the money stays in the accounts, they’re happy. I’ve had no problems with transferring from the first week on. I started out with just $1, then $2 and then $3….it’s slowly adding up, too.

  19. Sandi says:

    Great idea, I love the small amounts! My new year resolution was to start using cash instead of my debit card. To easy to swipe card and lose track of spending. When cash is gone it’s gone!

  20. Jennifer says:

    I am currently participating in this challenge as well as the 52 Week one. I started the 52 Week one in November of last year and this challenge at the beginning of January. I am currently up to $140.00 in this challenge. I basically pick random amounts on the chart and see what I have in my wallet (I don’t carry a lot of cash) and change purse that day. Thank you for posting this and I have shared it with others via FB. I think that it is not just the saving each day, but building and maintaining the habit of depositing daily. I always deposit at night before I go to sleep so I don’t forget during the hectic morning rush. ~Jennifer

  21. Reio Lance says:

    ironally if you did this on a leap year, you’d have to put an extra $3.66 on the final day of the year which would mean your grand total $671.61 by the end of the year. Personally I think this challenge is better only b/c it’s more realistic and you could do it backwards and start with $3.65 on day 1, and the way by December your putting away smaller amounts so you can still do your Christmas shopping!

  22. de says:

    If you work the 52 week challenge similar to the 365 challenge, it can be done…print it up, and mark thru the amount you do that particular week…so do the larger amounts first or when you are able, and when things are tight, do a lower amount…I’m going to mark off november and december during tax season while i have it…

  23. Jeffrey Strain says:

    You can also use this 52 week money challenge printable set up to do just that.

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  25. $eeker says:

    Could you suggest an institution that offers rates like these without already having a large balance? My bank, and the others I have checked, are much lower than 0.85%!

  26. gerald perry says:

    Excellent idea!! Bank of America let’s you transfer amounts from .01 on up!!

  27. gerald perry says:

    Also, another alteration to this plan is pay yourself $3.65 per day and $3.66 per day on leap years along with any automatic savings plans you have coming out of your paycheck on payday. This will help pay for my trip to Japan next year. Oh, you can also do both plans to pay down debt as well.

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