Are you looking for ways to save money? If so, you may want to consider the 1p savings challenge, also known as the penny-saving challenge or 1p challenge.
This challenge is a great way to get started saving money today! In this article, we will discuss the 1p savings challenge and how you can participate. We will also provide some tips on saving money and making the most of this challenge. Let's get started!
What is The 1p Saving Challenge?
The 1p savings challenge starts by saying just 1p a day, then each day doubling the amount saved, so day two is £0.02p, day three £0.04p, and it goes up from there!
In a normal year, your total savings will be £667.95, but in a leap year, it's even more – £671.61.
When you consider how expensive Christmas can be, this challenge is really something that will set you up so that you don't experience January blues!
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What if I Didn't Start in January?
Don't worry if you don't start in January. You can catch up by adding the days you missed. Use the 1p savings infographic below to see what you should have saved in each month, work out how much your pot needs to start with and add the lump sum.
How to Take Part in the 1p Challenge
There are a few ways you can take part in this challenge.
1) Physical approach: Your own Piggy Bank
If you want to take part physically, you can set up your own coin jar that you deposit pennies into each day. This is a great way to watch your progress and see how much money you are saving. However, since the pandemic and more and more people are moving towards cashless many opt for the digital approach.
2) Transfer the Cash To a Separate Savings Account
Transferring money each day could get a bit boring and hard to do, so we've worked out the amount you would need to save each month from sticking to the challenge. You can transfer this money into your savings account if you have a separate saving account each day. This way, the pennies saved will compound interest and grow quicker!
If you don't have a savings account set up already, Chip is a good option to consider. Chip is an online savings account where the FCSA protects your money. It's free to set up, and you can do it easily.
Chip connects to your existing bank account securely, and you can place deposits in each month to earn interest. Using an account like Chip also allows you to supercharge your savings goals as you can also set up other goals within the app, and the chip will use ai to work out what you can afford to save.
Related article: Chip vs Plum
3) Monzo way: What is the Monzo 1p challenge?
If you already bank with Monzo, the 1p challenge is easy to set up by linking your existing Monzo account with IFFT. You can then use the IFFT app to instruct your Monzo account to the exact amount you need to save each day on the 1p challenge!
To set up the 1p challenge within your Monzo account, simply visit the IFFT website, register and search for the 1p challenge! - It's that easy!
There is also a reverse 1p challenge too, and some Monzo users do this challenge alongside to maximise their savings and fun! The reverse 1p challenge is the same as the normal but starts in reverse, meaning you start by saving the high amount each day and gradually work your way down to 1p at the end of December. Some users set up both challenges and have the money go into the same pot, meaning they double the total savings over the entire year.
Related Article: Monzo Vs Starling
Variations of the 1p Savings Challenge
The 1p challenge is so popular because it makes saving fun and easy. It's also adaptable, and some have taken the challenge concept and tweaked it to make it work for them.
Here are a few variations of the challenge that you might want to try:
Reverse 1p Challenge
The reverse 1p challenge works the same in reverse. It's perfect for those who would prefer to have more money available around December. You save the exact amount as the normal challenge but start with the high amount each day and gradually work your way down to £0.01p at the end of December.
52-Week Savings Challenge
This is like the penny challenge on steroids and perfect for those who really want to test their budgets. At the end of the challenge, you will save £1378. The challenge works similarly to 1p in that you start with a low amount and work up.
The 52-week savings challenge works by saving £1 on week one and an additional £1 each week after.
Week 1: £1
Week 2: £2
Week 3: £3
Week 4: £4
And so on, working your way up to a £52 week saving in week 52! Although the first few weeks of this challenge will be manageable for most, you should consider if you can commit for the full year, as the last few weeks can be a bit tough!
How to Save More Money?
Doing a challenge isn't the only way to save more money. With the financial technology options available today, you can do it each time you spend. Here are a couple of options to automate your savings:
Round up Change:
Banking like Starling, Monzo and Revolut allows you to round up your change when you purchase. This means that if you spend £1.79 on a coffee, the app will automatically add 21p into a separate savings space, meaning you save each time you spend.
This might not seem like a lot, but it can quickly add up if you do this for every purchase throughout the month!
Related Article: Apps that round up change
There are many free money-saving apps available that will monitor your spending habits and save you money in the long run. Apps like Chip are perfect for those who want to be more hands-off with their saving, as they use ai technology to work out how much you can afford to save each month.
Related Article: Money Saving Apps
1p Saving Challenge Summary
The 1p Saving Challenge is a fun and easy way to save more money. Whether you choose the Reverse 1p Challenge, 52 Week Savings Challenge or Monzo's IFFT option, there are many ways to make this challenge work for your lifestyle. You don't have to break the bank to take part-- all it takes is a few minutes each day! The best benefit of the challenge is that it gives you extra cash when most need it (December/January)
Which variation of the challenge do you think will best suit your needs?
Let me know in the comments below if you have decided to take part and what you plan to use your challenge earnings on!