If Your Goal Is To Save Money In 2021, Here Are 7 Ways To Do It
According to a recent YouGov poll, saving money is the fourth most popular New Year’s resolution among Britons in 2021 (after three health-based goals).
While it sounds great in theory, saving money can be quite intimidating. How do you start? More importantly, how do you stop yourself from spending it?
Luckily there are loads of great ideas for getting into saving which can be adapted to a huge range of incomes. All will leave you with a chunk of change to put towards whatever you want: an emergency fund, a pair of boots you’ve been coveting for months or perhaps an optimistic plan for a 2021 autumn holiday. Plus, the structure of challenges will make you feel worse about breaking into that savings pot.
Given the mess that was 2020 for so many people’s livelihoods, we know that these challenges won’t be possible for everyone but hopefully they can be of use in the future. And if you are capable of taking part right now, we hope these challenges will inspire you to get started on organising your money, whatever your saving goals are.
1p Challenge
The 1p Challenge is one of the most popular saving challenges there is — probably given the suggested magic of turning 1p into £667.95 in a year.
The premise is simple: you start by saving 1p, and then the next day you save what you saved before, plus 1p. So day 1 = 1p, day 2 = 2p, day 3 = 3p and so on, all the way up to day 365 which is £3.65. While the increments are small, the savings are incredibly satisfying.
Thanks to the challenge’s popularity, you can find several free calendars and planners online to help you keep track, too.
52 Week Challenge
Similar to the 1p Challenge, the 52 Week works by slowly increasing the amount you save over time — only in this case you start saving £1 a week and increase that amount by £1 each week. By the end you’re saving £52 in one week to give you a total sum of £1,378 — it takes more investment but you’ll end up with double the 1p Challenge.
This challenge is really flexible, too. You can do it in reverse so it’s less intimidating (aka saving £52 the first week, £51 the next) or restructure it so you only save every other week. Perfect for people who are paid fortnightly!
£1,500 A Year Challenge
This challenge is, again, similar to the previous two challenges — only this time you have a specific goal in mind and the counter resets each week.
You start the week saving £1 on Monday, £2 on Tuesday, £3 on Wednesday and so on until Sunday. Then you reset and start again with £1 on Monday. You’ll end up saving £28 a week this way, with a total of £1,456 by the end of the year.
This is obviously not exactly £1,500 so we’re not really sure why the challenge is named that — but the high goal and opportunity to reset each week is inviting.
50/30/20 Challenge
This is less of an incremental challenge and more of a reframing of how you budget, with the goal of saving a certain percentage of each paycheque.
The idea is to split your total income into three pots: 50% to ‘needs’ like essentials and living expenses (rent, bills, groceries etc), 30% to ‘wants’ which covers all non-essential spending (from Netflix to a new pair of shoes), and the 20% that remains should be saved.
Unfortunately not everyone’s essentials and living expenses account for just 50% of their total income, with many people spending this much alone on rent. This is not because people are living beyond their means but because the cost of living in places like London, for example, far exceeds the average salary. If that’s the case for you, then you can reconfigure the percentages according to your lifestyle: if you can’t get your essentials below 60%, for example, you could split that extra so that you set aside 25% for your wants and still save 15%.
1% Challenge
A far smaller ask, the 1% Challenge suggests you work out 1% of either your fortnightly or monthly income and set up a direct debit to regularly set that amount aside. It won’t amount to much at first but will feel like a much less significant dent in your income — and over time it’ll add up to a nice little savings pot which you can use for birthdays, at Christmas, on holidays, or just to put towards a nice treat for yourself.
No Spend Month
Okay, so this sounds intimidating at first. On the one hand, there are many for whom this is already a reality: people who have no financial flexibility and can only afford to pay for the essentials. On the other hand, financial security is often hard won and in a global pandemic, a recession and with our painful breakup with the EU only just beginning to impact us, the idea of giving up any creature comforts sounds like unnecessary unhappiness.
However, if you can face the idea, here’s what you do: you take the 50/30/20 percentages and just don’t spend that 30% either. No wants whatsoever. It will inevitably be hard but with a clear end goal in sight, the savings will be far easier to build up.
Wednesday Weather Challenge
And finally, this is a fun one. The premise is that you look at the temperature every Wednesday and you set aside that amount in £. So if it’s 11°C, you set aside £11 that week. Extra points if you do it in Fahrenheit — that same £11 would be £51.8 over in the US…
Originally published at https://www.refinery29.com.
