Avoid The 100 Envelope Challenge (And Try This Instead)

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In 2023, it feels like everything is far more expensive than it has ever been.

From gas, to groceries, to simply going to see a movie, it seems that everything now needs to be saved up for in advance.

If you are privileged enough to have a decent wage that allows you to splurge throughout your life, count yourself one of the lucky ones.

To the others who are struggling right now: we hear you. We don’t all have extra cash around.

And, we are here to help!

There are a lot of tips and tricks out there, even 30 second TikTok videos on ways to manage your finances and how to start saving money.

You may be familiar with the 100 Envelope Challenge. This is a way to save a large sum of extra money within a short period of time, and seems to be extremely helpful on the surface.

However, if you do not have a lot of extra money to spare, we may even recommend that you avoid this money savings challenge altogether.

In this article, we will tell you all you need to know about the 100 Envelope Challenge, from the rules, down to the total amount of cash you will have saved up if you managed to complete the challenge itself.

You will also learn the pros and cons, as well as other money challenges that may be more suitable for you.

So, let’s get into it. Here is why you should avoid the 100 Envelope Challenge, and try out something new instead.

The 100 Envelope Challenge: All You Need To Know

The 100 Envelope Challenge, sometimes also known as the 100 Day Money Challenge, is a means to save a significant amount of money in just 100 days.

The envelope challenge was first launched on TikTok, and quickly became a trend amongst the masses.

This challenge was created as a spin-off of the ‘Envelope Budgeting Method’, a task meant to teach you to live off of the salary you receive from your job and get your excessive expenditures under control.

The 100 Envelope Challenge is a focus exercise meant to encourage you to begin saving money rather than covering your entire budget.

It has been hailed as being one of the most popular and fun ways to save quick amounts of money in a little amount of time.

More reading: What is the 30/30/30/10 Budgeting Rule?

How To Do The 100 Envelope Challenge

On paper, it is fairly easy to take part in the 100 Envelope Challenge.

While the initial set-up is really simple, it is actually finding the money to save that can be the difficult part, especially if you already struggle with your income.

Here is how you can take part in the 100 Envelope Challenge at home:

1. First things first, you’ll want to acquire 100 blank envelopes. Using a pen, pencil, or marker of your choice, label each envelope with a number from 1 to 100. You should end up with 100 envelopes, each labeled with a number between 1-100.
2. Before you start the envelope challenge, you may find it easier to shuffle the envelopes beforehand. The whole point of the challenge is that you do not know which number is going to be chosen.
3. On the day that you decide to start the challenge, you will pick out your first envelope from the pile. If you have not already shuffled, you can simply close your eyes and pick out a random envelope from the pile.
4. Take a look at the number on the front of your chosen envelope. This is the number of dollars that you will be placing inside the envelope in cash. For example, you have selected Envelope #42, you will need to place $42 inside the envelope.
5. Once the cash is inside, you seal the envelope, and put it away in a safe place.
6. On the second day of the envelope challenge, you repeat the process. Then you continue for the following 100 days until you have filled every single envelope with cash.
7. On the 100th day, you can open up all the envelopes. You have now successfully saved up a substantial amount of cash that can be spent in any way you please!

As we said earlier, this is – on paper – a very easy challenge to take part in to help yourself start saving money.

All you have to do is pick an envelope, fill it with the number of dollars that matches the number on the front of the envelope, and hide it away until every envelope has been filled.

If you are financially in a position where this sounds doable, we say ‘knock yourself out’. After all, the envelope challenge is a fairly simple way to save up thousands of dollars.

There are, however, several reasons why we would suggest that you avoid the envelope challenge… but, more on that later.

More reading: How to Sell Gift Cards for Instant Payment

What You’ll Need To Complete The 100 Envelope Challenge

So, now that you know how to complete the 100 Envelope Challenge, you may be wondering what tools and equipment you will need to try it out for yourself.

Here is everything you will need to complete this money saving challenge:

• 100 blank envelopes.
• A pen, pencil, marker, or anything that can be used to write the numbers onto each envelope.
• An expendable amount of cash.

When we say an expendable amount of cash, we mean that you will need to be prepared to put, at most, $100 into an envelope at a moment’s notice.

If you don’t have that amount of money to put away, this is probably not the challenge for you.

If you would like to add a little flair and fun to the envelope challenge, you could also use some decorative items for each of the envelopes, i.e., stickers, glitter, paint.

You could even use colored envelopes instead of plain white ones to add a little color to the challenge.

A fun idea to incorporate color would be to paint them in an ombre effect, with the lowest priced envelopes being colored green, and the highest being colored red.

So, you would paint the first envelope (the $1 envelope) a bright, vibrant green, to indicate it is the lowest priced envelope.

Paint the last envelope ($100) red, representing the ‘danger’ of the most expensive envelope. Then, paint the middle envelope ($50) yellow.

This next part may be a little tricky, but if you’re an artist at heart, you may find it kind of fun. For the $2 envelope, paint it green, but with a little yellow mixed in.

Then, as you move further into the envelopes ($3, $4, $5, etc.) add more yellow until you get to the $50.

Then, when you get to envelope number 51, paint it yellow, but with a little red paint mixed in. Continue doing this until you get to the 100th envelope, which is the reddest red.

This will create an ombre effect that represents the numbers getting higher, using the same system as traffic lights (green = go/good, yellow = preparing/average, red = stop/danger).

The redder the envelope, the more money you’ll add. The greener the envelope, the less.

This is not necessary, as you can simply use plain envelopes to make your life easier.

However, this may be a fun way to warn yourself of how much money you will need to put away each day before you even read the number on the front.

More reading: How Much is $20 an Hour per Year?

How Much Money Can Be Saved Through The 100 Envelope Challenge?

So, as you can work out just by imagining the envelopes, there will be a lot of cash saved up by the time you’ve finished the envelope challenge.

The most cash you will put away at one time is $100, but you will also have an envelope with $99, $98, $97, and so on.

How much does all this cash add up to?

Once you have filled every single envelope, and you have made it to the 100th day of the challenge, you will have saved up $5,050 in cash.

That is a lot of money saved within 100 days, which is around ¼ of a year.

This means that you could, potentially, save up over $10,000 in just under seven months, if you decided to start the envelope challenge again from the start as soon as you finish the first time around.

We do not recommend doing this, however. While it would be great to save up $10,000 in less than a year, that is a lot of money that you would have to do without.

If you cannot afford to do so, you should avoid it altogether.

And, that leads us nicely into the next section of this article.

More Reading: How Much is 4 Figures?

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Why You Should Avoid The 100 Envelope Challenge

So, if you were to complete the 100 Envelope Challenge without skipping any days, you would have saved up $5,050 within 100 days.

That is a lot of money to have saved up within such a short amount of time.

However, while it seems too good to be true on the surface, that is because it kind of is. The easiest part of this whole challenge is physically putting the cash into the envelopes.

There are many reasons why you shouldn’t do the 100 envelope challenge and thankfully a lot of other options you can do instead for saving money. Continue reading to find out why this challenge may be too difficult to complete.

One other savings challenge you can try is the 365 day nickel challenge.

It Is A Lot Of Money To Put Away

So, as you already know, you will need to put a specific amount of cash into an envelope every single day for 3.5 months.

At first glance, this seems like a pretty sweet deal and a way to help you save.

After all, in the best case scenario, you may only need to save $28 in a week. This would be the case if you received envelopes 1, 2, 3, 4, 5, 6 and 7 in a row.

However, $28 is the lowest amount of money that you would be saving per week. After that, the savings start to get a lot more expensive.

Picture this. It is the first week of the envelope challenge, and you have picked the following envelopes out, at random, over the first 7 days:

• 98
• 67
• 35
• 87
• 73
• 25
• 99

If you have shuffled the envelopes thoroughly, or you have chosen each envelope at random, it is not unlikely that this is a result that you may end up with for your first week of the envelope challenge.

If you were to pick out these specific envelopes, you would have to put $484 away within the first week alone.

The most amount of money that you would have to put away would be if you were to choose the following seven envelopes:

• 94
• 95
• 96
• 97
• 98
• 99
• 100

While this is unlikely if you had picked the envelopes at random, it would be possible for you to select these exact numbers all in one week.

In total, this would equal to $679 saved in one week.

If you have that money to spare, then you will be fine continuing saving money with the envelope challenge.

If the thought of putting almost $700 worth of cash away in an envelope within one week scares you, then this definitely isn’t the challenge for you.

Difficult For Low Income Earners

For the reasons we mentioned in the previous section, the 100 envelope challenge should be avoided if you are a low income earner.

The least amount of cash that you will be putting away, per month, is $465. That is the lowest amount.

The highest amount you could be putting away would be well over $1,000.

If you are not earning a lot of money at the moment, you may not have $485 to simply spare each month.

While the money is going towards a good cause – your savings – you may need that money in your current living situation.

You need to put your present wellbeing first. Focus on paying for your bills, groceries, etc, before you think about saving up large amounts of cash for the future.

There are other ways that you can save up money in similar ways to the 100 Envelope Challenge, and we will explain more on that later.

Difficult For Those Working Non-Contracted Jobs

Similarly to those on low incomes, this savings challenge is not recommended for those who do not work contracted hours.

Even if you are earning a decent income in your job right now, if you are not contracted, those wages are not confirmed for the upcoming months.

This month, you may easily be able to save $465 a month.

But, what about next month? What if you can’t pick up as many shifts next month, so you get paid considerably less?

For this reason, you are much better off attempting this savings challenge if you are earning a solid, permanent income.

If not, you may find that you’ll have to stop the envelope challenge halfway through, or before you’ve even really started.

If you consistently struggle to save money, try these tips on living below your means

Other Ways To Save Money

As we briefly mentioned earlier, there are other savings challenges to help you save up cash without breaking your bank account.

If you feel that you are not financially stable enough to take part in the 100 Envelope Challenge, fear not!

Take a look at the savings challenge options below, and pick out the one that works best for you and your income.

Using A Money Jar To Save Loose Change

This is an old classic that our grandparents, and great-grandparents, were using before we ever existed. It is a fail proof way to save up money without really trying.

All you need is a large money jar, or some sort of container that is large and transparent. Some people like to use large glass bottles, manufactured specifically for this kind of thing.

All you need to do is drop your loose change into your money jar, and watch the pennies build up overtime.

Yes, this savings challenge take a lot longer than the 100 Envelope Challenge, and you may not save up as much, but it is an easy, effortless way to save money.

Once the jar is full, you can take it to one of those Coinstar machines to tip all the change out.

The machine will count all the loose change for you, and will hand you a receipt at the end, listing how much you have saved up.

People have saved $1,000s through this method over the years, and by doing it, you won’t really be missing out on the money that you’re saving.

After all, does anyone ever really spend their loose change?

By saving your loose pennies, you can declutter your purse or wallet, and watch as the jar fills up with time. It is safe, satisfying, and will definitely pay off in the long run.

Using The 365 Penny Challenge

The 365 Penny Challenge is yet another savings challenge that has been passing through the current generations as of late, and for good reason.

It is another way to save money from day-to-day, and while it can get a little expensive towards the end, it is pretty effective.

The concept is simple: every single day of the year, you put away the same amount of cents of the number of the day of the year it is.

For example, on January 1st, you would put away one penny. On January 2nd, you put away two pennies. On January 3rd, three pennies.

Then, on the final day of the year – December 31st – you will put away $3.65, and that will conclude the 365 Penny Challenge.

Yes, the largest amount of money you will be spending per day is $3.65. This is nothing compared to saving $100 with the 100 Envelope Challenge!

As we said, the savings can get a little pricey towards the end of the year. During the final week of the year, you will be putting away the following:

• $3.59
• $3.60
• $3.61
• $3.62
• $3.63
• $3.64
• $3.65

This equals to $25.34. During December, you will be putting away around $100. However, this is still a lot less money to spend than the 100 Envelope Challenge.

So, if you are on a super tight income, this is a better money-saving challenge to try. You can also adopt some thrifty living tips like these to help yourself.

The obvious downside here is that, compared to the 100 Envelope Challenge, you will be saving a lot less money over a longer period of time.

Within a year, you will have saved around just under $700.

Still, that is $700 that you have to spare. You could even start the challenge in December, so that the following year, you will have $700 to add to your Christmas shopping budget.

Every penny counts, and this money challenge will help you save over the course of a year.

Using The 365 Dollar Challenge

Now, this may be a pretty self-explanatory money challenge if you have read the previous section.

The 365 Dollar Challenge is essentially exactly the same as the 365 Penny Challenge, except instead of saving a penny equivalent to each day, you will save a dollar equivalent to a day.

So, on January 1st, you save $1. On January 2nd, you save $2. On January 3rd, you save $3… and, so on, and so forth.

By the end of the year, you’ll end up saving almost $7,000, which is ten times more than what you would have saved with the 365 Penny Challenge.

However, this issue here is that, again, this money challenge may be a little too expensive for many people’s budgets.

The first month alone, you will be saving around $500, which is quite a lot of money. And, the cost only goes up as the months go along.

An easier way to do this money challenge, as well as the 365 Penny Challenge, may be to start backwards.

So, you start off by saving $365, or $3.65. Then, by working your way backwards, you will only have to save $1 on December 31st, or one penny.

Do a roundup Challenge

Another way to help yourself save money is to leverage an app like Acorns. Acorns will link to your debit card and automatically save money for you.

It rounds up the change on any purchases you make and places it into your saving. But, best of all, it also invests this money for you, so the money you save with Acorns can grow beyond the savings itself.

So if you buy $46.73 of groceries, then Acorns will take $0.27 and place it into your savings-investment account. If at anytime you are too stretched for cash, you can turn off the roundup!

If you are always asking yourself why you can’t seem to save money, Acorns can help! Start your Acorns account with this link and get an automatic $5 free in your account.

Did you know you can actually save $5,000 in 6 months?

Final Savings Challenge Thoughts

The 100 Envelope Challenge can be a great way to save up over $5,000 in 3 and a half months, but it is only effective if you already have the money to do so.

If you cannot afford to save up to $700 a month, you may want to avoid this savings challenge altogether.

There are so many ways to save up money, but unfortunately, many of these alternative challenges take a longer time to complete.

Unless you have a magic money tree in your backyard, there aren’t many ways to whip up $1,000s within short periods of time.

If you ask us, your best bet is to start off small, and watch as your savings account grow over time. And of course, the less you spend money, the faster you will be able to meet your savings goal.

You may feel a little impatient, but trust us when we say that it’ll be so worth it when your times comes.

Additionally, we would also like to recommend that you put savings away into savings accounts.

While cash placed in money jars and envelopes are easy to access at any given time, you can earn interest on your savings by putting them in a high yield savings account. CIT Bank has an online savings account that pays out over 4% in interest. You can actually make money off your emergency savings fund.

That way, you will save up a lot more in the long term.

We hope you found this article helpful.

Good luck with your savings!

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Acorns which takes your spare change from purchases and invests it for you to help you make even more money.

Personal Capital for money management. Get a money dashboard, free analysis and personalized wealth advice