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100 Envelope Challenge Explained

By Paulina Likos · June 07, 2022 · 7 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

100 Envelope Challenge Explained

Most of us wish it were easier to save money, whether we’re the sort of person who’s having trouble making ends meet or the kind who wants to save up for a big purchase. Here’s one simple solution: The 100 Envelope Challenge. It’s a creative and easy way to save money. If you commit to the challenge, you can save $5,000 in just three months.

Here’s a closer look at this clever way to stash some cash. We’ll review what daily money saving challenges are, such as the 100 Envelope Challenge and other variations on the theme, and how to put them to work for you. Whichever one you try, if you stick with it, you’ll have a major amount of moolah at the end of the exercise.

A Daily Money Saving Challenge

Daily money saving challenges help you save cash instead of spending it. The 100 Envelope Challenge is one of the latest trends in this kind of money hacking. It’s a great way to add more cash to an emergency fund or just help you manage your money with more focus and pumped-up results. This can be a fun daily activity that allows you to be more disciplined with your hard-earned cash. Instead of making impulse purchases, you’ll learn this smart saving habit that can get you excited about building up your money reserves for the future. Just one note: Most of these saving techniques involve cash (bills and coins), but there are some work-arounds if you are a person who mostly uses plastic.

What Is the 100 Envelope Challenge?

The 100 Envelope Money Challenge can be an easy way to save money and upgrade your budgeting skills. This challenge involves starting with 100 envelopes and labeling them from 1 to 100. Take the numbered envelopes and place them all in a large container or box.

Then, for the next 100 days, you randomly select an envelope from the container and put the amount of cash that’s labeled on the front inside the envelope. For example, if you pull out an envelope number 25, you place $25 in that envelope. Tuck that envelope somewhere safe, and repeat the process until you’ve reached the 100th day. That’s it: You’ve completed the challenge! And you now have $5,050 to deposit in savings, pay bills, spend, or invest.

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How Can I Save $5,000 in 3 Months?

The 100 Envelope Challenge, as you’ve just read, is a gamified way to salt away more than $5,000 in three months. People who stick with the challenge daily for the 100 days will have $5,050. Obviously, the days where you pull a lower-number envelope are easier to manage than the day you grab an envelope that’s waiting to be stuffed with a whopping 90-some dollars. The tricky part is keeping up with the challenge, regardless of the amount required. It can be helpful to keep track of your progress by recording a running tally of how much is saved over the months. As you see the amount grow, it may help you stay motivated about saving money.

You may be concerned that this challenge requires an outlay of cash every single day for three months. What, you may wonder, will I do if I don’t have cash handy? Here’s some good news: This daily money saving challenge can be done digitally as well. In the digital method, you would still need 100 envelopes to pick from everyday. But instead of placing the money in physical envelopes, participants can open a new bank account that’s separate from their everyday savings account. Perhaps your financial institution will even allow you to name the account “100 Envelope Challenge.” Link this account to your checking so you can transfer funds into it. When you pick an envelope with its designated number, transfer that amount to your new savings account.

In this version, you will still have $5,050 at the end of the 100-day challenge, even if you never handle any paper money during the 100 days. You may well emerge at the end of the challenge with a renewed appreciation of the fact that saving money is important.

Recommended: How to Transfer Money between Banks

Other Money Saving Challenges

There are a variety of creative ways to save money and build up your savings. It’s important to find one that feels like fun and fits your lifestyle and financial situation. You’ll be more likely to use it when managing your money. Here are some options to consider.

52-Week Money Challenge

The 52-week money challenge is another effective way to save for those who want to start out small and slowly work their way to saving more. This challenge involves saving $1 the first week, $2 the second week, $3 the third week and so on. The sequence continues until you reach week 52 when you save $52 dollars. If you stay consistent, at the end of this challenge, you will have saved a total of $1,378 over the course of a full year.

It’s an impressive amount of savings considering you never had to put in more than $52 per week. It shows that a little can eventually go a long way. This challenge can be especially effective because the amount of money stowed away each week is minimal. You may find you can complete this challenge without making much of a shift in your daily or monthly budgeting.

8-Week Vacation Savings Plan

If you have your sights set on taking a vacation, but aren’t sure how you’ll afford it, the 8-week vacation savings plan could be a perfect solution. It will help you speedily save money for a trip ($1,000 to be exact).

To participate, you’ll need to open a bank account devoted to vacation savings. Then, you save $1,000 by following this schedule of how much to save:

Week 1: $10
Week 2: $25
Week 3: $75
Week 4: $150
Week 5: $150
Week 6: $75
Week 7: $25
Week 8: $10

There’s something about that bell curve or “up the mountain, down the mountain” pattern to saving that makes it feel manageable.

Then, to save the rest of the $1,000, make some smart swaps. You may know some basic budgeting moves, like cooking at home instead of dining out. If, over the eight weeks, you cut out one $50 restaurant meal per week that’s $400 more saved that can go into your account.

If you have coffee at your home or office instead of getting a fancy espresso drink to go twice a week, that will save $10 per week. Over eight weeks, that’s the additional $80 that brings you to the $1,000 total.

Another tip: If you can afford it, try to save from your salary. You might set up automatic deductions that whisk some money out of your paycheck and move it into savings before you can spend it. These tactics will help you have a nice pile of cash so you can go on your getaway.

365-Day Nickel Savings Challenge

The 365-Day Nickel Savings Challenge is another way to accumulate a bundle of cash, and it starts with saving just a nickel a day. On day two, you set aside two nickels. On day three, you set aside three nickels and so on. Each day, you increase your savings by one more nickel. This challenge goes on for a full year. On the last day of the challenge, you save $18.40 and your total savings for the 365 days will amount to $3,300. Similar to other money savings challenges, you start out small with this challenge. But in this case, you begin super-small (just loose change, actually) but you wind up gathering a significant amount when the challenge is complete.

Spare Change Challenge

The Spare Change Challenge allows you to save money using change you have around your home that you may have forgotten about. This can be as easy as taking loose change and adding it to a piggy bank. When it’s filled to the brim, take the jar and add the money to your savings account. Other people have variations on this theme. For example they might make a point of paying for purchases with paper money, and then always putting the coins they get as change into a savings account. You’d be surprised at how those coins can add up to thousands of dollars over time.

Expense Tracking Challenge

Tracking your purchases can be a financially healthy exercise to know exactly how much you are spending on purchases. You can see in which categories your spending clusters, too. Doing this will help you realize if you’re making financially wise money decisions or if you are spending money on impulsive, possibly unnecessary purchases.

The Expense Tracking Challenge involves writing down your purchases for an entire month and reviewing what you bought. For some, creating the list as a spreadsheet may be easier. This exercise can reveal what type of spender you are and help you adjust money habits to be a smarter saver.

The Takeaway

Saving money challenges like the 100 Envelope Challenge can be a motivating and successful way to sock away some cash. They typically have you start out by contributing a small amount of money such as just one dollar. These gamified savings techniques provide motivation for you to stash away cash and see your savings account steadily grow. Building your savings skills this way can help you save larger amounts in the future. Whether your goal is to afford a vacation or the down payment on a house, these challenges can help you start saving.

If seeing your cash grow and building long-term wealth are among your money goals, come see what SoFi offers. When you sign up for our Checking and Savings with direct deposit, you’ll earn a competitive APY. Plus, you won’t pay any of the usual account fees, and you’ll have access to a network of 55,000+ fee-free ATMs. With these benefits, your money works harder for you.

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FAQ

How much do you get from the 100 Envelope Challenge?

At the end of the 100 Envelope Challenge, which lasts 100 days, you will have saved exactly $5,050.

What is the 52-Week Savings Challenge?

The 52-Week Savings Challenge involves saving $1 the first week and increasing that amount by one dollar each week. By the end of the 52 weeks, you will have saved $1,378.

How can I save extra cash?

There are many ways to save extra cash. Using fun and simple money challenges can be a great way to get started saving for short-term goals or a big future purchase. Participating in the 100 Envelope Challenge, the 52-Week Savings Challenge, or even creating your own customized challenge can be a great way to improve your relationship with money.


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