How to Do the 365-Day Nickel Challenge
Doing a money challenge is an excellent way to build your savings.
Some money challenges are effective but hard for most people to complete due to the significant amounts of money required toward the end of some challenges. By starting small with your saving habit, you can save a nice chunk of change without having to come up with prohibitively large amounts of money to stay on track.
Money challenges can be fun and motivating. If you have trouble saving money, the 365-day nickel challenge might be worthwhile. All you need is one nickel to get started.
What is the 365-Day Nickel Challenge?
The 365-day nickel challenge is a money-saving challenge where you put aside one nickel on day 1, two nickels on day 2, and three nickels on day 3. Continue increasing your savings by a nickel every day for one year. On day 365, you save $18.25, bringing your total savings for the year to $3,339.75.
How Much Money Will I Save With the Nickel Challenge?
When you complete the nickel challenge without missing a day for 365 days, you will save $3,339.75. You’ll begin by saving 5 cents on the first day. Then you’ll increase the amount you save by a nickel every day. On day 2, you’ll save a dime; on day 3, you’ll save 15 cents, and so forth for a year.
How Much is 5 Cents a Day for 365 Days?
5 cents a day for 365 days is $18.25. If you want to do the 365-day nickel challenge, it’s not about only saving 5 cents a day. You start with a nickel then add 5 cents to the prior day’s deposit every day for a year. If you complete the nickel savings challenge, you’ll have $3,379.75 on day 365.
How to Do the Nickel Challenge
The 365-Day Nickel Challenge is easy to start and simple to understand. You’ll be putting aside money, starting with a nickel, for 365 straight days. You then increase the prior day’s deposit amount by five cents every day for a year.
On day one, you put one nickel aside. Each day, you add $0.05 to the previous day’s deposit. So on day two, your deposit is $0.10, which brings your total saved to $0.15 on the second day. On day 10, you’ll be depositing $0.50, on day 100, you’ll be depositing $5, and on the last day, you deposit $18.40.
While the daily deposits seem small and insignificant, they add up quickly over time. If you don’t miss a day, you’ll have $3,339.75 in your savings account.
Keep in mind doing the challenge with actual nickels isn’t practical, as you’d need 66,795 of them. You probably don’t want to stand in line at the bank every day depositing physical nickels and getting strange looks from bank tellers either.
The point isn’t figuring out how to get as many nickels as possible or where to keep them. The point is to save thousands of dollars in one year’s time while you get in the habit of saving money regularly. You can move the money through online banking, use a mason jar or piggy bank, and then make a cash deposit when they fill up.
What Will You Do With $3,339.75?
If you need extra motivation to stick with the challenge, pick a specific goal before you start. For example, you could:
- Start an emergency fund
- Start a college fund for your kids
- Use the money for holiday gifts
- Put it toward your student loan
- Take a vacation
- Pay off any outstanding credit card debt
- Put it toward the down payment on a house or vehicle purchase
Whatever your savings goal is, start with the end in mind then go from there.
Why Do the Nickel Savings Challenge?
The 365-day nickel challenge helps you save money. The nickel challenge also helps you build the habit of saving, as you’ll be putting money aside daily.
It can help you eliminate bad spending habits too. As the amount you have to save gets bigger, you may decide to cut unnecessary expenses from your budget.
Toward the end of the challenge, it might get a bit tougher. On day 200 and beyond, coming up with $10 to $18.25 per day might require figuring out where that money will come from.
Keeping up with the challenge on a daily basis might mean making small sacrifices, cutting out impulse purchases, or finding ways to spend less on necessities and discretionary purchases. Those aren’t necessarily bad things, but freeing up extra money by slashing expenses to keep the challenge going can be difficult.
Creating new daily habits that contribute to your health, wealth, or happiness is good. Putting aside extra cash, establishing good money habits, and cutting back on wasteful spending are all good things. If you have a problem with overspending or have neglected to put money into savings, the 365-day nickel saving challenge might be just what the doctor ordered.
Other Money Challenges
Maybe the idea of savings challenges appeals to you, but you don’t think the nickel challenge formula will work for you. Or perhaps you’re looking for a fun money challenge for kids to teach them about the importance of saving money and building good savings habits. Try the original penny challenge.
The penny challenge is a 365-day challenge where you start with a penny, add $.01 every day, and you’ll have hundreds of dollars by the end of the year. With the penny challenge, the largest deposit will be $3.65, which should be doable. You’ll have $668 if you complete the challenge successfully.
If you want to aggressively save money by raising the difficulty level and the amount of money you’ll save, you could do the 100-envelope challenge. It’s not easy, and it might not be the most fun money-saving challenge if you struggle with it, but it is one of the more popular savings challenges. If you complete it, you’ll save $5,050 in 100 days.
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Sara Graham is a frugal living and household budgeting expert. Her writing has appeared on MSN Money, The Good Men Project, Fairygodboss, and several other online publications. She is the co-founder of KindaFrugal.com, a personal finance and frugal living blog.