The 1p Money Savings Challenge
What is the 1p savings challenge?
The viral 1p savings challenge is a great money saving method and likely be at the top of the list of many families New Year’s resolutions. The challenge is a great way to help people save £671.61 in 366 days by putting away a little bit of loose change each day, so that at the end of the year the piggy bank will be able to help fund the festive food and gifts, taking off the financial pressure in December.
It’s a leap year in 2024 and so there is an extra day; normally you would expect one less days savings, but the extra day of the year, which only happens every four years, means you can save even more!
By saving pennies as an increasing amount of money daily, people can build up their savings pot in a manageable way that won't break the bank but could make a big difference to a family's finances.
How does the 1p Savings challenge work?
The challenge is designed to start on January 1st, with a single penny, but could be started later as you can easily catch up by using your spare change. You start the challenge by saving 1p on the 1st of January then 2p on the 2nd of January, then 3p on the 3rd of January and so on – saving what you saved the day before, then adding a penny more each day – all the way up to £3.66 saved on the last day of December, although you may well end the challenge earlier to be able to use the money for helping towards your Christmas expenses.
It’s a fun way to save some money and getting the kids involved is a great plan as well as they enjoy the process of the saving challenge plus its also a good way to install a savings habit into their minds, especially good for young children as its a good financial lesson and helps to educate the child about the value of money, budgeting and savings, so its a win win!
So as an example, here’s how the challenge would work:
Day 1: Put in £0.01
Day 2: Put in £0.02
Day 3: Put in £0.03
Day 100: Put in £1.00
Day 101: Put in £1.01
Day 102: Put in £1.02
Double it on day 200...
Day 200: Put in £2.00
Day 201: Put in £2.01
Day 202: Put in £2.02
And continue until the 300th day...
Day 300: Put in £3.00
Day 301: Put in £3.01
Day 302: Put in £3.02
On the last day (31 December), put in £3.66, and it's time to cash in your jar.
If you've stuck to the plan, you should have £671.61 in total.
So what’s the best way to conduct your penny savings plan? The most logical solution would be to use a piggy bank or container to collect your loose change on a daily basis, and for many people that works really well, however we are all living in a more cashless society these days and so its quite possible that you wont actually have the cold hard cash available to be able to put away the required cash on a daily basis, I know I rarely have actual cash in my pocket!
If that’s the case for you as well, then look to online banking to for doing the hard work for you! Online banks such as the Monzo current account, has the facility to create money pots within your account that can be set up for savings, and are ideal for this sort of saving challenge. Monzo actually offer the facility to set up the saving automatically and it will take the required amount of daily from your main account and then transfer it to the savings pot. It’s a super easy way to do the challenge without having to mess around with loose change and is useful as you don’t have to remember to actually make the daily addition to the money pot!
If you haven’t already got a Monzo account, you can set one up using our referral link and you’ll get a £5 bonus when you set up your account and then make a first card payment using your account, which could be as simple as buying a drink, and that fiver will get you started with your savings!
If the idea of having to mess around with putting away small amounts of money every single day or setting up an online banking system doesn’t work for you, then bypass this daily challenge and do it monthly instead. You can simply transfer the monthly equivalent of the challenge to a savings account so you still have the same amount at the end of the year.
Do this by sending larger amounts to your bank monthly; transfer the figures below to your bank, or savings account:
You can send these amounts in any order you want, so if you know you’ve got an expensive month coming up, you could transfer a smaller months amount instead and equally if you have some extra money one month, you could then transfer a larger months figure to your bank account instead, the choice is yours!
Equally, and this is one of the top tips I think for those who would like the extra money to play with next Christmas but don’t need the hassle of the other methods, you could just set up a standing order to your savings account for £55.97 a month for the 12 months, which would give you the same figure at the end of the challenge, plus a couple of extra pennies as well!
You could also up the amount to £68 a month over 10 months and then use that cash to buy Premium Bonds instead and who knows you might win a prize to help boost your penny challenge significantly! I like this as you’re not going to earn much interest on sending the money to your bank account as interest rates aren’t great, and so you never know you might win up to a million pounds by purchasing premium bonds, and that would make Christmas 2024 pretty impressive!
Remember you won’t have your monthly payments premium bonds entered into the prize draws until the following month so Januarys payment will be entered into February’s draw, Februarys into March and so on. Allow a week for the money to hit your bank account once you withdraw your money from your premium bonds account, so withdraw that in early December or late November so you have the money for Christmas!
If you’re going with the old school, daily cash method it can be hard to remember where you’ve got to and how much money you’ve put in the pot, or need to put in the pot on that day. Therefore money saving expert Martin Lewis has come to the rescue via his Money saving Expert website and has a produced a free chart which tells you how much money to save each day and allows you to tick each day you’ve put money into the pot and so you can keep on track! You can download the free tracker as a pdf HERE.
Even if you don’t manage to put away all the money over the year, anything you’re saved will be an added bonus. This cash stuffing method is a great way to use your spare change to make a difference later in the year. Even if you just have a pot to add any spare change into, as and when you have it, it’ll help you out, and these days we can all use a little extra cash when expense get higher, such as Christmas!