Written by Savings challenges are becoming increasingly popular. They’re a way to gamify saving money and make this important responsibility feel more fun and achievable.
Enter the 100-envelope savings challenge. It’s taken social media by storm for good reason: Those who complete it end up with an extra $5,050 in savings.
With just a pen, a pack of envelopes, and a strong commitment to growing your savings, you can gamify your budget and see measurable results. Here’s how to complete the challenge.
The 100-envelope savings challenge involves using envelopes to save a lump sum of cash over the course of 100 days. Envelopes are labeled No. 1 through 100, with each number corresponding to the amount of cash that should be put into each one.
Every day, you pull a new envelope and add the corresponding amount of cash. Some people follow the challenge in numerical order — saving $1 on day one, $2 on day two, and so on until they set aside $100 on the final day of the challenge. Others prefer to pull a random envelope each day and save whatever amount is indicated.
Either way, at the end of the 100 days, you’ll end up with $5,050 in total savings.
As an added incentive, some savers opt to DIY or purchase decorative money envelopes or money binders with slots for each individual day.
It may sound somewhat gimmicky, but this savings strategy really does work for those who struggle with motivation or consistency. Savings challenges like this one make saving money easier by breaking up a large goal into smaller chunks that can feel more manageable day-to-day. Plus, physically seeing envelopes fill up can provide more of a sense of accomplishment.
Read more: 5 psychological money hacks to cut spending and increase savings
Ready to give this challenge a try? Here’s what to consider so that you’re successful.
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Budget for savings: Saving more than $5,000 in just over three months is no easy feat. You’ll need to review your budget to ensure you have enough positive cash flow to complete the challenge. If you don’t, look for expenses you can temporarily cut back, such as freezing a little-used gym membership or downgrading streaming services to versions with ads.
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Don’t limit yourself to 100 days: Filling 100 envelopes in 100 days is the fastest, most aggressive way to do the challenge. But if that’s not realistic based on your income, expenses, and goals, feel free to set your own pace. For example, some people do two to three envelopes per week or “payday envelopes” where they complete a handful following each paycheck.
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Pull cash strategically: You’ll want to think about keeping some cash on hand so you don’t have to make frequent trips to the ATM or pay excessive fees for withdrawing cash each day. Consider scheduling your trips to the ATM after each paycheck so that you always have cash on hand and can make your daily deposit into your envelopes.
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Keep your money safe: There are security risks involved when keeping cash in your home. You could misplace it or risk those envelopes falling into the wrong hands. So, think carefully about where you plan to keep your envelopes. A safe or a locked drawer can ensure that none of your envelopes are misplaced.
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Consider swapping envelopes for a high-yield savings account: One of the main drawbacks of saving money in cash is that it won’t earn interest. Sure, this method can provide extra motivation as you watch your stack of cash grow. But you’ll also miss out on free money in the form of interest earnings, and over time, your cash will lose value due to inflation. So, to maximize your savings, consider completing this challenge digitally by pulling a number and making a transfer to a high-yield savings account each day.
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Celebrate milestones: Saving can feel like a grind, especially when big envelopes pop up. Give yourself permission to celebrate wins along the way to help keep you motivated. For example, each time you reach another $1,000 in savings, treat yourself to a favorite coffee or dessert, or buy something small you’ve been putting off, like a new journal or candle.
Read more: How to save cash: 7 ways to protect and grow your liquid savings
