Are You Taking the 52-Week Money Challenge?

A 52-Week Money Challenge has been circulating on social media and personal finance blogs over the past few weeks. With the onset of the New Year, many people are feeling inspired by a new chance to meet their financial goals and a challenge is one way to get you motivated.

If you haven’t seen the 52-Week Money Challenge, here’s how it works. Start week 1 by depositing $1 into your savings. Yes, just $1. Each week, add an extra dollar to your deposit. So, in week 2, you deposit $2; week 3, $3, and so on. After your final weekly deposit of $52, you’ll have deposited a grand total of $1,378 into your savings. It sounds wonderful and easy, but give it a little more thought and you might find that it’s harder than it appears.

In the final weeks of the year, the weeks when people start spending more money on holidays, you’ll be giving up $30 to $50 from each of your weekly paychecks, which doesn’t sound like much until you consider that it’s actually $200 to $400 per month ($70 to $100 if you’re paid bi-weekly). Can you afford to set aside that much of your monthly paychecks? Probably not unless you either get a raise or gradually cut back on spending throughout the year to compensate for the increase in savings.

While the more popular version of 52-Week Money Challenge may not work for you, you can still participate. Just make some minor changes to the savings amount to better fit your finances.

Here are some ideas for alternatives:

Level the amount. The hardest part of the 52-Week Money Challenge will be the last weeks of the month. You can, instead contribute $26.50 each week and still end up with $1,378 at the end of the year. The first few weeks - those where you’re depositing $10 or less - won’t be as easy, but your savings will grow faster in the beginning and that may motivate you to keep going.

Come up with your own level savings amount that you’ll deposit every week this year. If you can save $20 each week, you will have saved $1,040 by the end of the year.

Maybe you’re paid bi-weekly, every other week, or monthly. Don’t let that be a reason not to follow the weekly challenge. Just alter the deposit amounts to fit your pay. Generally, if you’re paid bi-weekly or every other week, you’ll deposit two weeks’ amounts. Or, if you’re paid monthly, you’ll deposit four weeks’ amounts.

To make it easier, make it automatic. If you’ve chosen a level savings amount, $26.50 or some other amount, it’s easy to set up an automatic transfer from your checking account to your savings account each week. Your savings will grow and you haven’t done anything but earn the money.

If you’re increasing your savings each week, it can be hard to set up an automatic transfer – you’ll have to set up 52 different transfers, if your bank even has this functionality. Set a weekly reminder in your calendar, sometimes after your paycheck has been deposited, and make your transfer at that time.

There are dozens of worksheets on around the web that you can print and use to help track your progress. Just type "52 Week Money Challenge worksheet" into any search engine. Or, make your own worksheet. Create a table or spreadsheet with 52 lines and 3 columns. In the first column, number the weeks 1 to 52. In the second column, write the weekly deposit amount - which will be $1 to $52 if you're following the standard challenge. In the 3rd column, write the savings account balance which is that week's deposit plus the previous week's balance. You can make a 26-row table if you're paid bi-weekly, 24 rows for bi-monthly, and 12 rows if you're paid monthly.

Don’t quit if it gets too hard. Consider reducing the amount you’re saving, but continue making regular deposits into your savings account.

Finally, try not to take any money from your savings. Open up a separate savings account if you need to, just so your challenge money is completely separate from everything else.