Ready to see your savings grow? Here are four ideas to inspire your very own money savings challenge.
July 31, 2017
You’d expect a couple dubbing themselves “the Frugalwoods” on their finance blog to be experts at living with less and saving a lot. Even so, hearing some of what their extreme frugality has achieved is stunning, especially if you’re thinking about how to do a money savings challenge.
By faithfully tracking every penny they spend and ruthlessly cutting out unnecessary purchases, Liz and Nate Frugalwoods—who use pseudonyms for blogging and interviews—claim they now save 80 percent of their income. To live on just 20 percent of what they earn means being able to get many of the things they need at no cost.
How to save money with a challenge
Living on a 66-acre homestead in rural Vermont, the Frugalwoods belong to a local online group, part of a worldwide gifting, lending and sharing movement that has expanded to 20 countries. When their daughter was born in November of 2015, they say they spent only about $20 to outfit both her and the nursery. The money went to purchase some clothes and a baby swing they found at a garage sale.
Everything else for their daughter they found through the online group or as hand-me-downs or other free sources, Liz Frugalwoods says.
Liz Frugalwoods, a communications manager, and Nate Frugalwoods, a software engineer, started their frugality project more than three years ago. The couple has shared some of their secrets for low-cost living with a money savings challenge, which they’ve posted on their blog.
The key to learning how to save money with a challenge, they say, is to know why you’re doing it. Identifying a purpose for the money you’re saving is the first step of a money savings challenge. For those who share a household with a spouse or partner, it’s also important that both be committed to working toward a common savings goal, Frugalwoods says.
For David Ning, who manages and writes for a personal finance blog, the essential ingredients for a successful money savings challenge are fun, simplicity and consistency. To help his readers stick with the challenges he creates, he posts plenty of reminders to follow daily saving practices and track their progress.
“Saving is hard,” Ning says. “If you don’t keep reminding everyone, people forget. They can come up with excuses.”
If you’re ready to shake your excuses for not saving more and learn how to start a money savings challenge of your own, here are four ideas that may inspire you to get going:
1. The extremely frugal makeover
If you’re game for going all in on frugal living with your money savings challenge, you can consider giving the Frugalwoods’s money savings challenge a spin. You’ll get 31 consecutive days of emailed motivational messages, homework assignments and practical information like tips for saving on groceries. One of the homework assignments asks you to write down all of the things about your life that you would like to change and how your spending habits might be preventing the transformation.
“The idea is twofold,” Frugalwoods says. “It’s to help you save as much money as is possible for you, but more importantly, it’s to help you identify what you really want out of life—what you see as your long-term goals.”
You can also create your own money savings challenge for frugal living. Partner up with friends who will take the challenge with you and share ideas—such as biking to work a couple of times a week to save on gas or swapping like-new children’s clothes instead of heading to the department store when your little one outgrows something. Exchange calls, texts and emails to help each other stay motivated and on track. Your goal doesn’t have to be living on one-fifth of your income like the Frugalwoods. Maybe you have another financial goal, like saving up for a new house or boosting your contribution to your 401(k).
Worried about how to start a money savings challenge if this is your first go? Don’t be. “The great thing about frugality is that you can apply it at any level,” Frugalwoods says, whether you are trying to save 10 or 50 percent of your income. “The themes and the lessons are the same.”
2. The save the change challenge
Another possibility for those interested in learning how to start a money savings challenge is to earmark some of your extra cash, such as the change from regular purchases or the amount your bill goes down when the price drops on a recurring expense, for deposit into your savings account. For example, you might decide to sock away any change that’s less than a dollar, or every $1 or $5 bill you get back.
Source: discover.com