Learn how to Flip the Penny Problem into $2,500
I really like financial savings challenges, and few are as widespread because the penny problem.
It sounds really easy. Simply saving your pennies day-after-day can add as much as lots of of {dollars} a yr in financial savings.
Use a brand new twist on the penny problem for among the best financial savings challenges and develop a small quantity to 1000’s.
I attempted the unique penny problem however rapidly discovered a few issues that had been derailing my progress. In consequence, I wanted to place a brand new twist on this outdated problem to remain on observe and meet my purpose.
I got here up with a technique to make saving even simpler and switch it into 1000’s of {dollars}.
What’s the Penny Problem?
The essential concept for the penny problem is simple. You save one penny in your first day, two pennies on the second day, three on the third, and so forth for 12 months. Meaning you’re saving the identical quantity you probably did the day earlier than whereas including one other penny.
You’ll be able to meet your financial savings targets from the change you discover round the home or the change you obtain from purchases. By the point you’re achieved, you’re saving 365 pennies on the ultimate day.
The thought is to make saving gradual. By beginning small, saving simply pennies a day, you make saving extra accessible and don’t need to sacrifice. I’ve constructed a chart of how a lot you save per week to comply with alongside in your penny problem and put collectively my financial savings problem after the graphic.
What’s the Penny Problem
Two Issues with the Penny Problem
The primary drawback with the penny problem isn’t obvious at first. Saving lower than a greenback over the primary weeks is a simple begin. You won’t be capable to discover $0.77 mendacity round the home, however you’ll be able to normally put it along with the change from purchases.
Strive making it to the ultimate weeks of the problem, although, and also you’re looking for virtually $30 every week…that’s a variety of pennies. You’re not speaking about saving your change anymore, which throws many individuals off.
Learn how to the Penny a Day Problem
The second drawback with the penny problem is that even making it by means of your entire yr, you’re solely saving $667 complete. That’s good for a pleasant buying journey and perhaps paying off some payments. Nonetheless, it’s nothing you’re going to get that enthusiastic about. You won’t even get motivated sufficient to start out the problem.
I really like the thought of financial savings challenges. So I believed I’d take a shot at bettering the penny problem, attending to probably the most vital issues that will help you save extra money.
Utilizing a Financial savings App with the Penny a Day Problem
One of the tough issues in regards to the Penny a Day Problem is remembering to save lots of the pennies every day and monitoring your progress.
It’s straightforward sufficient saving a couple of days of pennies, but it surely will get more difficult to trace what number of you could save as you progress. Utilizing financial savings apps can add a brand new ingredient to the Penny Problem and make saving simpler.
In actual fact, one financial savings app I take advantage of makes the Penny Problem computerized and can make it easier to attain your retirement targets sooner.
The Acorns app connects together with your credit score and debit playing cards that will help you get monetary savings with out even doing something. After signing up, you hyperlink your playing cards after which spend usually.
For each buy you make with a linked card, the Acorns app rounds the quantity as much as the closest greenback and deposits the distinction into an funding account. For instance, suppose your every day double-mocha-latte-frappe involves $3.73. The app will spherical it as much as $4 in your card and put the remaining $0.27 into your funding account.
How Does the Acorns App Work?
This makes it simpler to comply with the Penny Problem since you’re not scrounging for change within the sofa every day. As a substitute, you spend usually, and the app does the remaining.
Get began saving at this time, open a free Acorns account now
What I like in regards to the Acorns app is that it combines this on the spot saving with a Robo-advisor, which makes investing straightforward. Simply reply a couple of questions whenever you open your account. Then the app will recommend one among 5 funding portfolios constructed from professionally-managed funds in shares, bonds, and actual property.
All of your cash saved goes instantly into your investments, and also you pay no funding charges. The one charge is a $1 month-to-month cost, frequent amongst Robo-advisor platforms.
Now there’ll come the purpose within the Penny Problem the place you’re searching for extra pennies to save lots of than what you get from rounding up your purchases, however the app will make it a lot simpler to start out.
Bettering the Penny Problem
To make saving extra manageable, particularly these massive weeks in the direction of the tip of the yr, strive discovering locations in your funds to chop. As a substitute of simply making the problem in regards to the spare change you discover round the home or the leftover from purchases, strive chopping bills and budgeting to satisfy your financial savings purpose.
Once I did the penny problem, I reduce on drinks once I went out with mates. You’d be amazed at how a lot it can save you by chopping again to at least one drink as an alternative of two or three only one time every week. I ended up saving virtually double my purpose over the previous couple of weeks.
Even in the event you solely handle to save lots of the $667 from the penny problem concept, you’ll be able to nonetheless flip it into 1000’s of {dollars}. After all, not too many individuals get labored up over $700, however I don’t know anybody that will flip down $2,500!
There’s no trick right here. Simply make investments the cash together with the remainder of your retirement cash. At a return of seven% yearly, $667 turns into $2,584 over 20 years.
Yeah, I do know it doesn’t look like a brand new twist on the penny problem. You’d be shocked, although, how many individuals blow their cash saved every year. Should you spend it on a splurge on the finish of the yr. Then why even go to the hassle of saving it within the first place?
Does the Penny Problem Work?
The Penny a Day Problem does work, however that’s if you will discover the cash to save lots of day-after-day. It’s straightforward at first, however by the tip of the yr, you’re saving upwards of $25 every week.
Being profitable with the penny problem means discovering methods to make your saving computerized, like with financial savings apps and strategies to trick your spending into serving to you save.
The very best half in regards to the penny problem is the financial savings habits you’ll construct in a couple of quick weeks. So even in the event you don’t make it your entire yr, you’ll have constructed some financial savings habits in a couple of weeks that may make it easier to management spending and put you on the fitting monetary path.
The penny and different financial savings challenges aren’t simply methods to save lots of up a pair hundred {dollars}. As a substitute, use them to vary your spending habits, steadily work into saving extra usually and make saving simpler. It’s not about saving extra money for a couple of months or a yr however about studying to get probably the most out of your cash.
Various Cash Saving Challenges
There are numerous money-saving strategies and challenges, however the hardest half is discovering the one which works finest for you whereas reaching your saving targets! Beneath I’ve outlined 3 of my favourite money-saving challenges which may be higher suited to you.
- The 52-Week Saving Problem
This is among the hottest financial savings challenges as a result of it’s comparatively straightforward and can prevent $1,378 by the tip of the yr! This problem is very easy, and right here’s the way it works:
- Deposit $1 into your financial savings in week 1
- Deposit $2 into your financial savings in week 2
- Deposit $3 into your financial savings in week 3
Do that till you’ve accomplished 52 weeks and saved up $1378! By the tip, you’ll have sufficient to purchase one thing good or some further money for presents round Christmas!
- 365-Day Nickel-Saving Problem
Hoping to save lots of somewhat bit extra than simply $1000 by the tip of the yr? If that is so, strive the 365-day Nickel-Saving Problem. This problem will permit for consistency in the event you don’t significantly like ready every week or two to deposit. On this problem, you’ll deposit cash each single day for a complete yr whereas placing in somewhat bit extra every day.
You’ll begin off on day 1 by depositing a nickel, then on day 2, you deposit 2 nickels, and so forth. Right here’s an instance:
- Deposit $0.05 into your financial savings on day 1
- Deposit $0.10 into your financial savings on day 2
- Deposit $0.15 into your financial savings on day 3
- Deposit $18.40 into your financial savings on day 365
By the tip of the 12 months, you’ll have saved up $3,300! Appears straightforward, proper! Should you’re feeling further motivated, double it every day!
- $1 Invoice Problem
This problem is comparatively straightforward in the event you don’t need to take into consideration having to deposit particular quantities on a set schedule. The way in which this works is simple – each time you obtain a $1 invoice as change, tuck it away in an envelope. If the envelope will get too massive, transfer it over to a jar. Then, on the finish of the yr, rely it up and spend that cash on one thing enjoyable! If you wish to make this more durable for your self, you are able to do this with a $5 or a $10 invoice!
One other technique to make some further money is to make sure you’re receiving the very best cashback charges on all purchases. Should you haven’t achieved so, take into account signing up for TopCashBack to entry 1000’s of cashback offers and coupon codes. Excellent for growing your financial savings on your entire on-line buying!
Take a look at TopCashBack and Begin Saving Immediately