Planning to build a rainy day fund, or want to save money for a holiday or next Christmas? Consider participating in the 1p saving challenge and put money aside every day for a year.
A savings challenge for 2024 is a fun way to work towards your financial goals. And committing to the penny challenge is also an excellent opportunity to teach your family about money.
Ready to start saving? In this guide, we'll look at the 1p challenge, its benefits, and how to adapt it to suit the whole family.
The well-known 1p challenge is a money saving method that lasts 365 days. It works by increasing the amount you save by 1p each day of the year. On the first day of the challenge, you start by saving one penny. This rises to two pennies on the second day, three pennies on the third, four pennies on the fourth, and so on. On the last day of the year, which is the 365th day, that amount rises to £3.65. Once combined, all of these smaller amounts add up to £667.95 if started on January 1st.
Typically, savers start the challenge on the 1st of January. While the amount you save at the start is manageable, the challenge becomes more difficult towards the end of the year. But it can help you think about the things you spend money on each day and substitute a purchase for a deposit. This can help create positive habits which could help improve your overall financial wellbeing.
It’s a good idea to use a challenge chart to mark your 1p savings progress and make saving money even easier to manage. The penny a day challenge is an enjoyable way to save. Some savers prefer to keep their cash in a jar or money pot to watch it grow, while others prefer to keep it in a savings account. Choose the option that works best for you and keeps you motivated.
This money-saving challenge could help take the stress out of a future purchase, or help you save towards a larger goal whilst reinforcing good financial habits. If you’re looking to put larger sums of money aside, take a look at more saving challenges to try in 2024.
You can track your progress using a saving challenge chart.
Simply write it down on paper or create it in a digital spreadsheet. You can see how much money you've saved and check off each day as you reach it, keeping you on track with your savings. It can also show you, at a glance, how much money you need to save each day – helping you to achieve your financial goals.
When it comes to saving money, it’s essential to find a method that suits you. Cashless payments are growing more popular, with The Guardian reporting notes and coins will account for just 6% of payments within a decade according to UK Finance. If you rarely carry cash and prefer online or mobile banking, consider transferring your savings to a bank account each day, week, or month instead.
Saving regularly can be difficult.
The 1p challenge is motivating but requires you to save every day, which could be too frequent for many savers. Plus, it can be harder to keep up during the festive season, especially if you have significant expenses around this time.
You may find that a different savings challenge is more suitable for you. Consider the below variations of the 1p saving challenge to give yourself the best chance of success.
The reverse 1p challenge gets easier as you go. You’ll save the most money on day one, £3.65, and reduce your daily savings by 1p each day after that. By the end of the challenge, you will save £667.95.
You’ll save the same amount as the traditional penny challenge but this variation is more appealing to those who find it difficult to save around the festive season. It does require you to save the most money in January but getting the hardest part out of the way can be helpful.
The 52-week 1p challenge can be a more manageable method of saving.
You still save for 12 months, but you place money aside every week rather than every day. The saving amounts are the same as the penny challenge, but you’re not committing to a daily saving goal.
After 52 weeks of consistent saving, you’ll put away a total of £667.95. If you get paid weekly or are likely to forget to save every day, this challenge could be a better option.
A savings challenge is a perfect opportunity to start talking about money management with children.
One way this challenge can work for young children is to save a penny a day. Every day they’ll put aside 1p, saving £3.65 by the end of the challenge.
Looking for bigger saving goals? Consider increasing the amount to 10p a day to reach a total of £36.50 in savings.
Saving your pennies adds up quickly, and this variation of the 1p challenge is a great way to get kids to understand the importance of money. It could even help them develop good saving habits. Opt for a jar or piggy bank so they can watch their savings grow, or put in their own savings account so they can start to understand how interest can be earned and help grow their savings pot over time.
The 1p challenge is a creative way to save, but it's important to select a challenge that's tailored to you for the best chance of success.
For more ideas that could help you save in 2024, check out our list of savings challenges.