How to Do the 100 Envelope Challenge & Save $5,050

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    If you’re looking for new ways to save money and playfully learn about personal finance, why not try the 100 envelope challenge? If you decide to give this a whirl, you’ll have saved $5,050 by the end of the challenge in a short amount of time.

    The 100 envelope challenge is one of the most creative and fun money-saving challenges out there. At this point, you’ve probably seen the 100 envelope challenge Tiktok as well as variations on other social media platforms. Let’s talk about what it is, how it works, and what you’ll need to start this fun challenge.

    $100 bills in a brown envelope

    What is the 100 envelope challenge?

    The 100 envelope challenge is one of the most creative and challenging money-saving experiments around. The goal of the challenge (besides saving $5,050) is to teach you how to be consistent with savings and keep your yourself and your family members focused on financial goals.

    What You’ll Need

    For the 100 envelope challenge, you’ll need:

    • A bunch of envelopes – 100, to be exact
    • A marker
    • A varying amount of cash (or you can move money every time to a savings account if keeping extra cash around is too much work)
    • A box or container
    • Optional: A free printable 100 envelope challenge or spreadsheet to check off which amounts you’ve already saved

    You can also buy a 100 envelope challenge box from Amazon with prelabeled envelopes and a container if you want a very orderly and organized look.

    Once you’ve gathered your supplies, you’ll need to do the following steps:

    Step 1: Label your envelopes, 1 through 100. Feel free to get creative and fun by decorating them with stickers or hand-drawn images to make it even more fun.

    Step 2: Shuffle the envelopes so that they’re mixed up and no longer in order. Part of the fun of the challenge is the random amounts you’ll draw each time!

    Step 3: Place all the envelopes in a box, basket, or container.

    Step 4: Decide how often you’ll draw an envelope. You can choose to pull one daily, weekly, every payday, monthly – whatever you think will help stretch your savings abilities without putting your household in jeopardy.

    Step 5: For each envelope you draw, you’ll add that the envelope number amount of money to it. For example, if you grab an envelope with a 52, you’ll add $52 to that envelope. If having cash is too tricky, transfer that amount to a savings account instead.

    Step 6: Repeat step 5 until you’ve gone through all the envelopes. Once your challenge is complete, you’ll have $5,050 saved up!

    If you have a free 100 envelope challenge tracker, don’t forget to mark that number off the tracker so you can see your progress!

    How much money do you get after the 100 envelope challenge?

    After you complete the entire savings challenge, you’ll have saved $5,050. That’s a great kick start to a downpayment on a house, a fantastic vacation, or a nice chunk of your emergency fund.

    Is this Money Saving Challenge Right for Me?

    The 100 envelope challenge isn’t for everyone. There are a couple of reasons that it might not work for you:

    1. You have high-interest debt, like credit cards. You’re better off paying off any high-interest debt (over 6ish percent) before you jump into a savings challenge. Or, you’re behind on debts that affect multiple angles of your life, including unpaid parking tickets.
    2. You’re living paycheck-to-paycheck already. Trying to squeeze in a savings challenge when you’re already hand to mouth isn’t a great idea and could jeopardize your living situation if you aren’t able to pay rent or buy food. If things are that tight, I suggest trying some of these ideas instead:

    Tips to Succeed with your 100 Envelope Challenge

    Once you’re sure you have the resources to take on the 100 Envelope Challenge, you’ll want to follow these tips to ensure your success:

    1. You don’t have to use cash. If you don’t have cash around, that’s ok – set up a savings account that is only for this challenge. Then, set aside money from your bank account to your separate savings account as needed.
    2. Don’t seal the envelopes when depositing cash in them. If you’re ever in the mood to do this challenge again, you’ll be able to reuse the envelopes and save yourself some time and money.
    3. Pick your envelope in the morning. This way, you’ll know the amount you’re saving that day, and it’ll keep it top of mind throughout the day. Knowing the amount you need to save can be the best way to curb spending and help you focus more on your financial goals.
    4. Switch it up. If an every day money challenge is too much, make it weekly, bi-weekly, monthly – whatever works best for you. However, make sure that it’s still a challenge and that you’re stretching yourself so that you grow from the experience.

    The Pros and Cons of the Challenge

    There are several pros and cons to the 100 envelope challenge. You must consider these before you jump in and decide if they affect your willingness to follow through with the challenge or not:

    Pros:

    • The challenge teaches consistency and focusing on your goals.
    • It can increase your net worth by $5000.
    • It’s perfect for those big purchases you don’t want to pay credit card interest on, like vacations or big electronics purchases.
    • The challenge can be a great kickstart on paying off debt, saving up for a downpayment on a house, or building your emergency fund.
    • It’s an effective way to keep your savings at the top of your mind.
    • The challenge is easily customizable (see variations below).
    • It’s fun!

    Cons:

    • If you pull two or three (or more!) high numbers in a row, that can put a damper on your budget – and kick up your stress level. It could cause you to bail on the challenge altogether if it feels too difficult to achieve.
    • Not everyone has extra disposable income available to set aside larger chunks of a lot of money like this.
    • Keeping cash in envelopes vs. a savings account means you’re not earning interest on those savings.

    To me, there are more pros than cons. However, you have to decide if it works with your family, lifestyle, and budget or if you need to hold off until you tackle some higher interest debt.

    Variations of the Money Saving Challenge

    The great thing about the 100 envelope challenge is that you can do it repeatedly with a challenge variation. If a daily savings challenge feels overwhelming, why not put a twist on it like this:

    • Pull an envelope weekly.
    • Grab an envelope bi-weekly or every payday.
    • Pull eight to nine envelopes every month to complete the challenge in a year.
    • In six months, to complete the challenge, pull an envelope about every other single day (technically, every 1.825 days).
    • If the amounts are too high, try customizing the numbers on the envelopes. Try 50 cents to $50, or $1 to $50 with variations.
    • Try adding more envelopes if 100 isn’t enough of a challenge.
    • Or, take some away if it’s too much. Try 1 – 20 or 1 – 50 to tone the challenge down.

    What is the 50 Envelope Challenge?

    The 50 envelope challenge is just a variation of the 100 envelope challenge. You’ll label the envelopes 1 – 50 rather than 1 through 100.

    Other Money-Saving Challenges to Try

    Lastly, if the 100 envelope challenges feel like it’s too much, there are tons of other creative and fun money challenges to try:

    1. The no-spend challenge idea. Choose a week (or month) and try not to buy anything that’s not a necessity. Learn more about the no spend challenge here and grab some free printables.
    2. The 52-week challenge. In this challenge, you’ll work throughout the year to save $1378. It’s an easy way to save a little bit at a time without too much effort. Week one, you’ll save $1, week two will be $2, and so on up to week 52, when you’ll save $52. Learn more about the 52-week challenge here and grab several free printables.
    3. The $1000 savings challenge. It’s less money but there are several great ways to get that first $1,000 savings goals!
    4. Thirty-seven easy money savings challenge ideas. From saving all your $5 bills to the dime challenge, there are a ton of fun challenges that help you save your extra money. Learn more about the various other money-saving challenges here.

    The 100 envelope challenge is a great way to learn about personal finance and save money in an exciting, creative way. If you’re looking for new ways to get your savings on track without the burden of debt hanging over you, this could be just what you need! Take some time tonight or tomorrow to decide if this will work for you – it’s worth exploring all the different variations that are possible with this fun and easy-to-follow challenge.

    If you’ve started the challenge, let me know how it’s going in the comments below – I’d love to hear about it!

    Text that reads welcome to Debt Free Forties

    A forty-ish web designer/developer by day, a budget & financial fanatic by night. I’m a mom, wife, avid reader, and DIY enthusiast who’s tracking our journey to debt freedom. Read More

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