The 100-envelope challenge requires a lot of cash on hand Fortunately, you can modify the 100-envelope challenge for your needs, and there are other savings challenges you can do if you like the framework and motivation a challenge provides. For instance, if your monthly essential expenses are already close to your monthly income, you might have too tight of a budget to afford to save this much. The 100-envelope challenge isn't realistic for everyone. The default design of the 100-envelope challenge may not work for you That way you're helping grow their financial literacy as you grow your savings.ĭisadvantages of the 100-envelope challenge Depending on how old they are, they may be able to help you write numbers on the 100 envelopes, choose an envelope each day, count out the right amount of money to put inside, or help you track how much money you have saved overall. If you have kids, you can have them join in the savings challenge fun. Once you've established a practice of setting aside money every day for almost 3 and a half months, it'll be easier to do so going forward.Īnd it doesn't have to stop with you. If you're not a natural saver, the 100-envelope challenge could jump-start a savings habit-and make it feel like a game instead of a chore. For some people, this may be substantially more than they otherwise would save over 3 months, and it could be just what they need to put themselves in a better financial position. Perhaps the biggest appeal of the 100-envelope challenge is that, if you follow it to the letter, you'll have set aside a hefty amount in a relatively short period of time. Saving a big chunk of cash in a short time You can complete it again in the same way, change up the challenge for the next round, or try out another money-saving challenge to keep your excitement level high-and your savings too. Think of the 100-envelope challenge as a stepping stone in a lifelong savings journey. When you complete your first 100 days (or however long you choose to complete the challenge), try not to stop there. Not sure what you would do with a chunk of change that large? Check out our guide on what to do with $5,000. You could use your savings from this challenge to start your emergency fund, if you don't already have one, to finance a special savings goal (vacation, anyone?), or as the start for a large financial goal, like a home down payment, kid's college fund, debt repayment, or retirement savings. It'll still help you save money-an extra $1,300-but it does so over the course of a year instead of 100 days. If customizing this challenge doesn't work for you but you're still in the mood for a fun challenge to save money, you might consider doing the 52-week money challenge. So envelope #3 would get $1.50 stashed inside instead of $3 while envelope #98 would get $49 instead of $98. Maybe you'd halve the amount you put in an envelope each week. That might mean picking out an envelope less often, like once or twice a week, or changing the dollar amounts associated with each. You can customize the 100-envelope challenge to fit your financial situation. That's right-1 + 2 + 3 + 4 and every other number through 100 equals just over $5,000.Īn important note: If saving $5,000 in 100 days isn't feasible for you-which it likely isn't for many people-don't let the sticker shock dissuade you from participating at all. After you put the proper amount of money in the envelope, seal it up and place it somewhere safe.Īt the end of 100 days, you'll have 100 envelopes containing $5,050. For instance, you'd put $3 inside envelope #3 and $98 inside envelope #98. The number on the envelope you choose is the amount of cash you should stick inside of it. Many people prefer to pick envelopes randomly to make the amount they save each day a surprise. You can either keep them in numeric order or mix them up. Prefer not to DIY this step? You can buy special 100-envelope challenge envelopes at online retailers. What's important is that you use each number only once. Others stick to classic white envelopes and a marker for numbering. Some people embrace their inner crafter and create colored envelopes with calligraphy. You can be as creative with this as you wish.
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