Written by Darnell Darby
Monday, January 27th, 2020
I recently sat down to review my spending habits, and while there were admittedly a few negatives, the overall takeaway was overwhelmingly positive and ultimately invaluable.
The first thing I realized, apart from the fact that I spare no expense when it comes to food, is that I am quite the savvy saver. Any financial goal for every major event in my life has been achieved through a money challenge.
Here's how I come up with money challenges for my financial goals and how they work.
SMART Goals that Pay Off
I started saving at the age of 12, and years of trial and error have shown me that before I choose a challenge, I need to have specific, measured, attainable, realistic and timely goals (SMART). Whether you're saving for your future or to pay off debt, without specific goals, saving often feels like an impossible task.
Once you've chosen a goal, select a challenge that will make achieving your goal fun and compelling. Luckily, there are tons to choose from.
Learning to Challenge Myself
One of my first financial learning experiences was during university. My yearly tuition was between $5,000 and $6,000. Fortunately, I was able to save half of that over the summers by working full-time.
Half My Tuition (Yearly)
$2,500 - $3,000
In my research to find a method that would help me reach my goal, I discovered the very basic “monthly challenge," which consists of saving a specific amount each month.
My goal was to save between $250 and $375 a month. It was difficult at first, but as I saw my balance gradually start to grow, saving became fun and rewarding. I even found new ways to cut back on expenses, allowing me to save more and get to my goal faster.
By evaluating my finances, setting a goal and implementing a plan to achieve it, I learned how to be resourceful and diligent.
Pushing Myself Financially
The more I saved, the more motivated I felt to create an emergency fund using the popular “52-week challenge." This takes place over a full year. Each week I saved a dollar more than I did the previous week (starting with $1) until I reached a total of $1,378.
Friendly Competition to Encourage New Habits
Recently, my work colleagues and I participated in the “brown bag" challenge, where we all had to bring a homemade lunch to work every day for a full month, and the winner got a paid lunch to the place of their choosing. Not only did the challenge encourage healthy eating, but it also curbed my daily food spending. As a self-proclaimed foodie, this was hard, but to everyone's surprise, I won! It also helped having other people get involved in the challenge.
Finding What Motivates Your Saving
After reviewing my finances over the last decade, I realized reaching my financial goals wasn't the only motivating factor. It was the fiscal maturity, newfound responsibility and improved discipline I gained along the way that truly made me feel accomplished. Try a money challenge and kick start the new decade with big savings.