The 1p challenge: the easiest way to save money
If your bank account is looking a bit sorry after the Christmas break, this money-saving hack might be just what you need.
As the new year gets under way, many of us are thinking about what we might like to do differently in the year ahead.
If money feels like a constant stress, or if you simply want to try to save a little bit, you’ve probably been scanning the internet or asking around for money-saving tips.
Unfortunately, a lot of savings or budgeting advice is unrealistic or aimed at high-earning workers (apart from our money saving advice, of course).
We personally don’t think that locking yourself in your room, refusing to go out with friends, and living on carrot sticks is a good way to save. You might end up spending less money, but it wouldn’t be much fun.
Instead, we recommend trying the money-saving challenge that'll barely impact your daily life, but still leave you with over £650 at the end of the first year.
The 1p saving challenge
Brace yourself, as we’re about to reveal one of the easiest savings tips we think we’ve ever come across.
It’s called the 1p saving challenge. That's right – a savings challenge that only involves pennies. It really does exist. But how does it work?
On the first day of the year, you put 1p away. On the second day you put in 2p, on the 3rd, 3p, and so on.
Do this for the entire year, and by the 365th day (that's the 31st December, to you and me), you'll still only be putting £3.65 away.
And what’s the best part of this? By the end of the year, you will have saved almost £700. In a normal year your total will be £667.95, but in a leap year it's even more – £671.61, to be precise.
Part of what makes this challenge so simple is how flexible it is. If you don’t want to be putting so much money away so close to Christmas, you could reverse things by putting £3.65 away on day 1, then decreasing the amount by a penny each day.
Alternatively, if you're not reading this until later in the year, you could still take part in the 1p challenge for 365 days but simply start it at a random time in the year.
It's simply a case of finding what works for you, but we're fairly confident that whatever you choose to do, you'll feel pretty happy when you’re basking in your effortlessly gained savings.
Another simple, easy and effective way to save is to up the stakes but save less regularly. Over a year it'll save you over twice as much money as the 1p challenge, but of course, that means sacrificing more money along the way too.
In week one you save £1, increasing the amount by a pound every week – £2 in week 2, £3 in week 3 and so on. In the final week of the year you put away £52, and overall you'll save a whopping £1,456.
However, it's worth looking at how the costs break down before committing. The first few weeks should be fine, but by December you would need to save £49, £50, £51, and £52, totalling £202. This seems a bit much, especially when it’s Christmas!
How to grow your savings
Saving hundreds of pounds is great, but what if we told you that there were easy ways to make that figure even larger? Enter automatic savings bots.
These apps work by monitoring your incomings and outgoings, and then every week or so they work out an affordable amount to save on your behalf (which you can cancel if you can’t spare the money).
Our personal favourite of these bots is Chip, as it pays you 1% interest on anything you save, plus an extra 1% for every friend you successfully refer to the app (up to 5%).
You can also manually (and very easily) deposit money into Chip, making it the ideal place to put your 1p challenge savings. And as if all that wasn't enough, you can even set it to work even when you're in your overdraft – ideal for students!
Among the other automatic savings bots we recommend are Plum, Cleo, and Folio, but if you prefer to go old-school with your finances, you could go for the more traditional route of savings accounts. High-interest savings accounts enable you to earn extra cash without putting in any extra effort.
While interest rates aren’t exactly brilliant right now, there is a possibility of earning up to 5% on your savings – a pretty good reason not to keep your cash under the bed! You don’t even need to deposit a fortune to open an account, with some only requiring £1.
How to get creative with saving
You might feel like saving money is pointless as a student. Just having enough money to live is your priority, right?
It’s true that savings come second to getting by, but if you can afford to put some money away, you definitely should. Having savings gives you more options to do things like travel during the holidays, or prevent a panic when that rainy day comes.
What's more, learning to save money is a pretty good skill to nail early on in life.
There are plenty of very simple saving tactics out there. For example, avoid spending money on coffee and expensive sandwiches when you can make them at home.
So next time a well-meaning adult suggests you’re spending too much money, you can prove them wrong by showing them how you’re saving!
Check out our list of the best student bank accounts to give yourself the best chance of financial success!