Several of my friends recently sent me copies of a "52-week money challenge" that they're doing to save up about $1,400 this year. The challenge is best described by this table:
Note that I don't have an actual source for this table. It was merely sent to me by multiple friends. I'm sure there's an original source somewhere for this, but I never found an original source, just a ton of visual variations on it. Still, the math behind it is really simple, so it would be very easy to replicate it.
Anyway, the idea is simple. During the first week of the year, you save $1. During the second week, you save $2. Keep adding a dollar each week so that during the last week of the year, you're socking away $52. Even without interest, this adds up to $1,378 over the course of a year.
The appeal of the plan is obvious. When you first see it and look at the first week, you can't help but reflect on the idea that it only requires you to save one dollar this week, yet by the end of the year, you'll have more than a thousand. That seems like impressive growth.
Of course, the catch is that the later weeks are far more challenging than the earlier ones. If you start this in January, December's weeks are going to require you to put away $49, $50, $51, and $52, respectively. This plan is asking people to put aside more than $200 during the one month of the year when money is often the tightest.
Don't get me wrong, the idea of slowly growing your commitment to saving makes a lot of sense. It becomes easier and easier to find ways to sock a little bit away the longer you do it.
However, the idea of increasing your savings on such a smooth, straight line doesn't match reality. Our lives simply aren't a smooth, straight line.
One way people who save compensate for that is by having an emergency fund (cash stored away in a savings account for an emergency). Another way is through automatic investing, where money is taken automatically out of their checking account each week and invested for them, requiring them to live off of what's left in checking.
However, neither of these ideas really apply here.
Instead, I'd simply propose a little change to this "52-week money challenge." It doesn't really change much about the plan, but it does help with the fact that people have varying lives.
Each week, make it your goal to save as much as you can. Can you save $20 this week? How about $40? How about $52? The higher you can make that number, the better. You can bump that number up through little choices during the week.
At the end of the week, just cross off the line on the "money challenge" table that matches how much you were able to save. If you were only able to sock away $15 this week, cross off the $15 line. If you saved $52 this week, cross off the $52 line.
Why do this? If you just follow the chart as-is, you're going to eventually run into a week where it's not easy to make that goal. If you fail for a week, it's going to feel pretty tough to get back on the routine. On the other hand, some weeks are going to be full of opportunities and saving $40 or $50 will be much easier. On top of that, you're going to be most enthusiastic about this project at the start, which means it makes sense to try to cross off a few big numbers during the first few weeks.
Print off that table. Stick it on the fridge. Each week, save as much as you can. Cross off the line that matches how much you were able to save. If one week is a little worse than the one before it, no big deal. You can rebound next week.
Remember, the goal is to build savings in a realistic way, through the ups and downs of your life. Every week should involve some forward progress, but some weeks will be better than others. Even if you don't find the "52 week money challenge" to be particularly useful, there's still a great deal of value in keeping that principle of realistic savings in mind.
You don't have to set a new savings record every week. You just need to move forward all the time, at least a little.