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Wednesday 9th February 2022
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Saving money isn’t always easy but developing simple habits will lead to serious benefits over time. The 1p money saving challenge is a great example of this, and it’s something you can start as soon as the year ticks over.
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Saving money isn’t always easy. When we talk about things like following the 50/30/20 rule, what we’re really trying to do is build up a healthier relationship with our cash. It’s all about developing simple habits that lead to serious benefits over time – and that’s usually worth a lot more than socking away a lump of cash every now and then.
For a quick guide to the 50/30/20 rule, take a look at our article, “What You Should Be Saving According to Your Salary”. For right now, though, let’s talk about how even the smallest baby-steps toward better saving habits matter. The 1p money saving challenge is a great example of this, and it’s something you can start as soon as the year ticks over.
Here’s the whole idea in a nutshell. Every day of the year, starting from the 1st of January, you’re going to save just one penny more than you did the day before. So, on the 1st of January you set aside a single penny. It doesn’t matter if it came out of your pocket or you picked it up off the street. Just put it away somewhere and mark your calendar to show that you did it.
When the 2nd of January rolls around, you save 2p – that’s on top of the 1p you saved yesterday, so you’ve got 3p saved already. On the 3rd, you save 3p (for a total of 6p stashed away). After that you just keep on going to the end of the year. See? We told you it wasn’t going to be complicated.
So right now, you’re probably thinking that these amounts really don’t seem like they’d be worth saving. After all, even on the final day of the year you’ll only be putting away a grand total of £3.65, right? The funny thing is, even though the challenge is incredibly easy to complete, that doesn’t mean it’s not worth trying. In fact, following the challenge for an entire year actually nets you a grand total of £667.95 (or £671.61 if it’s a leap year)!
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The beauty of the 1p money saving challenge is that it really doesn’t matter when you start. The savings will be mounting up from the first day, and you can keep going well past the end of the year to keep your momentum.
If you’ve missed the suggested kick-off date of the 1st of January and want to catch up rather than working from scratch, no problem! Just work out what you would have saved if you had started on the 1st and sock that amount away immediately. So, if your actual start date was, say, the 24th of January, you’d just add up all the previous totals to get £3 and start by saving that. Then, the next day, you’d just add 25p to that total and work from there.
It’s a classic for a reason. A simple penny jar is great for giving you a real-time, real-world sense of what you’re saving. Plonk your jar on a shelf or window sill, somewhere you’ll see it every day, and physically put your saved pennies into it. You won’t get too deep into the year before you have to get yourself a bigger jar, which is a great feeling in itself if you’d always felt like you couldn’t save money at all.
One thing to watch out for is the “cash-out tax” you might find yourself getting kicked with when you take your jar(s) to the bank at the end of the challenge. You could choose to carefully bag up all the loose coins yourself to deposit them, which is a bit of a chore but does keep your savings intact. On the other hand, dumping them into a bank’s coin-sorting machine is a lot simpler – but will typically cost you about 10% off the top for the convenience. With the kind of cash we’re talking about, that’s a big chunk of change to lose.
Obviously, the cash method won’t work for everyone. We don’t all deal in coins as much these days, particularly since COVID-19 reared its ugly head. Instead, you can use your online banking app or website to transfer the savings into a separate account. Depending on your bank’s rules and systems, you might have to do this monthly rather than daily. That’s slightly against the spirit of the challenge, of course, but stick to the plan and don’t skip your transfer dates either way.
Another way to go is to split up your yearly savings total into 12 payments and get them transferred automatically to your savings account. Rounding up, this would mean stashing away £55.67 per month throughout the year.
One cool little trick to help make what you’re saving “real” in your mind is to check your banking app to see what you typically spend on any given day. If you’re toward the end of the year and looking for a saving of £3 or more, you might spot a payment you’ve made before for something like a sandwich or coffee. Simply swap that for a drink or meal from home and sock away the cost you’ve saved. Remember, the 1p money saving challenge isn’t about hitting you over the head with the money you’ve been “wasting”. It’s not designed to tell you what kinds of things you can’t buy or do with your own cash. It’s supposed to show you how easy it can be to save real money with a few basic tricks and the right kind of thinking.
So, there it is – one of the simplest ways to get into the habit of saving some pretty serious cash. If you never believed you could save, give it a try and let us know how you did on our Facebook or Instagram page. Meanwhile, keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re always better off with RIFT.
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