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Imagine waking up on January 1st next year, knowing that you have over $3,000 waiting for you inside your savings account. That’s $3,000 that you can spend on whatever you want. A vacation. A spa day. A down payment on a brand-new car.
If this sounds like something you’d be interested in, you may want to continue reading.
In this article, we’re going to take a look at the trend that has taken the world by storm: the 365-Day Nickel Challenge. Within a single year, you could save up over $3,000, by following some easy, simple steps.
So, let’s get into it.
The 365-Day Nickel Challenge Explained
The 365-Day Nickel Challenge, in summary, involves you saving nickels that correspond to the number of each day. Commencing with a single nickel, you will put money away every day for 365 days, adding five cents to the deposit amount from the day before.
So, on day 1, you will save 1 nickel. On day 2, you will save 2 nickels. On day 3, you’ll save 3 nickels, and so on and so forth. The final sum that you will save, on the 365th day of the year, will be $18.40.
More Reading: How to Save $5,000 in 6 Months
How Much Money Can You Save by Doing the 365-Day Nickel Challenge?
Overall, if you were to complete the 365-Day Nickel Challenge without missing a single day, you would save $3,379.75.
It is recommended that you save up for this challenge in your bank account, rather than using physical nickel coins. Saving the coins physically may be difficult since you would need enough space to contain them all in one place.
However, if you have a particularly large piggy bank, there is nothing stopping you from doing so!
More Reading: What is $20 an Hour Annually?
Is the 365-Day Nickel Challenge Worth it?
At first glance, this challenge may seem too good to be true. How is it possible that you can save up such a large sum of money by only saving a handful of nickels each day?
The reality of the 365-Day Nickel Challenge is that is that it is progressive. While you start off only saving a couple of nickels a day, the amount of money you save will grow as the weeks go on. By day 100, you will need to put away $5. On day 101, you’ll put away $5.05. On day 102, it’ll be $5.10.
This means that, as time goes on, you will be putting away a hefty amount of money each week.
During the final week of the year, each daily saving would total a staggering $127.75 for the entire week. Your monthly savings for the month of December will be roughly estimated at somewhere around $500.
For most people, December is the most expensive month of the year, with Christmas being on the horizon. If you think you’d struggle with saving such a large amount of money, this may not be the money-saving challenge for you. Here are some other ways to save if your budget is too tight.
Any person would love to wake up to $3,379.75 in their savings account on January 1st. However, if you are already struggling to make ends meet on your current wage, this challenge may do more harm to your bank account than good.
More Reading: Why Can’t I save Money?
What Can You do with $3,379.75?
$3,379.75 is a lot of money, and most people would love to have that amount of cash on hand for a rainy day. Times are particularly tough at the moment, and anyone would be grateful for an extra $3k in their bank accounts.
But, what could a person do with money saved from the nickel challenge?
When taking part in a money-saving challenge, you may become disheartened at some points throughout the year, convincing yourself that you can afford to skip ‘just one day’.
By giving yourself a goal or a motivation, e.g., deciding on what exactly you are saving up for, it will encourage you to continue saving.
$3,379.75 isn’t enough money to buy a brand new sports car, or to buy a new house. It isn’t a large amount of money, in reality, but it is still enough to cover some expenses that you may currently be struggling with.
While it won’t be enough to purchase a car or a house outright, you could use this cash to put towards a down payment on either option. From there, you can pay them off over time.
Alternatively, $3,379.75 is more than enough money to spend on a vacation for you and your partner or family! If you have already started planning for a vacation, your saved money could be used as spending money while you’re there.
However, you may want to be responsible, and not spend the cash right away. Or, if you have a lot of debt, you could use it to pay off an entire credit card!
The safest option may be to continue to save the money, keeping it in its current saving account. Simply leaving it alone for a bit could result in you saving far more money in the long run, especially if you put it in an interest-bearing savings account like this one.
In fact, if you are thinking about trying out the 365-Day Nickel Challenge, we recommend saving the nickels in an interest-generating savings account. By doing so, you will ultimately generate a lot more than $3,379.75 by the end of the year.
By saving up the money, and generating interest, you could use the cash as a fallback emergency fund for the future. It could be used for your children’s college fees, or to save up for a larger purchase in years to come, e.g., a new car.
More Reading: What to Do Instead of the 100 Envelope Challenge
Similar Saving Challenges to the 365-Day Nickel Challenge
If you are interested in taking part in the 365-Day Nickel Challenge, but you’re not sure that you will manage financially, don’t worry. There are many more similar projects you might try that could be more appropriate for your current financial situation.
If you need a general guide on how much you should save each month, check out this guide on the 50-30-20 budgeting rule.
The 365-Day Penny Challenge
Another recent craze that has become popular is the 365 Penny Challenge, and with good cause. While it can get a little pricey in the long run, it is still a relatively effective approach to save money on a daily basis.
The idea is straightforward, and fairly similar to the 365-Day Nickel Challenge: on each day of the year, you save the same number of pennies as the day of the year it is.
For instance, you will save 1 penny on the first day, 2 on the second day, etc. The 365-Day Penny Challenge will come to an end when you save $3.65 on December 31st.
You will have saved $667.95 by the time this challenge is over. It may not generate as much as the Nickel Challenge, but this strategy is less expensive and simpler to manage.
The 365-Day Dollar Challenge
The 365-Day Dollar Challenge is, in comparison to the other two challenges we’ve discussed, a lot more expensive to save up for. Instead of saving up 1 penny a day, or 1 nickel, you will be saving 1 dollar each day.
By the end of the year, you will have $6,670.95. If you believe you can save up this amount of money within a year, you should definitely give it a try!
More Reading: 21 Free Budget Printables
Saving Loose Change in a Saving Jar
Last but not least, we have the easiest way to save money witha. good old-fashioned jar. Although, it may take a while to see any results. All you need to do is use an old glass jar, or a piggy bank, and fill it up with any loose change or notes that you generate.
You could make it a challenge, and make yourself put away any change under $10 into your savings. Then, after a chosen set time, you can open up the saving jar and check out how much you have saved altogether!
Or, you could essentially do this same thing but digitally with the Acorns app. Acorns will round up the change on your debit card purchases and automatically save it for you.
But, it actually will save it in an investment account, so the money you save is making more money! Sign up with this link today and get an automatic $5 invested into your account!
If this challenge has caught your interest, and you can handle each payment without suffering financially, we certainly recommend trying it out. After all, who doesn’t want $3,000 in their savings account?
Be sure to keep your financial situation in mind before starting. And, if you struggle to keep these payments up, you could always try out the 365-Day Penny Challenge instead, and save up to $667.95 by the end of the year.
We hope you found this article helpful.
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HERE ARE MY FAVORITE BUDGETING AND SAVING APPS:
Acorns which takes your spare change from purchases and invests it for you to help you make more money.
Rakuten for cash back on shopping. Use this link for a $30 bonus.
Personal Capital for money management. Get a money dashboard and personalized wealth advice.