The 52-Week Money Challenge: Should You Try It?

money in piggybank

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Americans suck at saving money. We all know we need to be setting aside more of what we earn (as much as 20% of our annual income, according to personal finance gurus) but when it comes to actually squirreling away cash, too many of us don’t follow through.

Sixty-two percent of Americans have less than $1,000 in savings, according to a survey by Go Banking Rates, which puts them a hair’s breadth away from financial disaster. Yet a different poll by Gallup found the same percentage of people said they enjoyed saving money more than spending it. The United States is a nation of failed would-be savers, it seems.

Given the disconnect between our desire to save and our actual bank account balances, it’s hardly surprising that many people are drawn to tricks that promise to help them bulk up their nest egg. One in particular has recently caught on in a big way: the 52-week money challenge, which was created in 2013 by a woman named Kassondra Perry-Moreland.

The challenge is simple. You start by saving $1 this week. The next week, save $2. In the third week, $3, and so on. After 52 weeks (and a final deposit of $52), you’ll have a nest egg totaling $1,378. The challenge is easy to understand and relatively painless to follow. It works even if you don’t have a savings account (you can just stick your savings in a jar). But is a scheme like this one really the best way to save money? While the strategy can work for anyone who wants to boost their savings, it’s a better fit for some people than others.

People who’ve never saved before or who think there’s no room in their budget for savings are good candidates for the challenge, David Bakke, a personal finance expert with Money Crashers, told The Cheat Sheet. “It’s good from a starter’s standpoint,” he said.

“It starts slow, builds up, and then you see the results. It’s a solid strategy without a lot of drawbacks,” he explained.

watering money tree

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More accomplished savers can also benefit from the 52-week money challenge, but they should also look into ways to save above and beyond the roughly $1,400 accumulated over the year-long program. “Others who have already begun saving might want to adopt the automation strategy where money is diverted from their paycheck each week in order to save more,” Bakke suggested.

People who are motivated by the “challenge” aspect of the program but want to save more can easily tailor it to meet their specific needs. A “double money” variant involves kicking off your savings with $2, saving $4 in week two, and $6 in week three, up to $104 in week 52, for a total savings of $2,756.

Another option is the reverse 52-week challenge, where you save in decreasing amounts, starting with $52 in week one. This version is especially appealing if you start the challenge in the first week in January and don’t want to get stuck having to make the largest contributions to the pot around the holidays, when money may be tight. You can even skip around from week to week, saving the higher amounts in weeks when you’re relatively flush and making smaller contributions when money is tight, suggested Jon Gorey at The Simple Dollar.

One potential difficultly with the $52 week challenge is actually remembering to save, especially if you’re setting aside actual cash. That’s the problem Crissinda Ponder of Bankrate ran into when she tried the challenge.

“Things were going well for the first few weeks, but I called it quits after Week Seven – probably because I use my debit card religiously and have the hardest time keeping folding bills on my person,” she wrote.

money transfer

Money | iStock.com

The easy way around Ponder’s difficulty is using automatic bank transfers. If setting up 52 separate transfers in different amounts seems like a pain, you can also even out the challenge by saving $26.50 every week. Or try using an app like Qapital, which has a 52-week money challenge option built in.

Ultimately, the nitty-gritty details of the challenge are less important than having a specific, achievable goal that motivates you to save more money. Having a savings target in mind, whether it’s $300 or $3,000, as well as benchmarks you plan to hit along the way, will make it easier to actually save.

“Whether you use the 52-week money challenge or not, write down your savings goals that you want to achieve,” Bakke said. “Maybe it’s $500 in the first year if you’re first starting out. Then, create mini-goals and every time you reach one of them, give yourself a modest reward, such as a meal at a nice restaurant. That’s a great way to keep yourself motivated. If you find yourself falling behind, do not get frustrated and give up. Simply readjust your goals until you’re back on track.”

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