While people recover from the financial pinch over the festive period, many are looking for ways they can start saving money again. The envelope challenge can help you save over £5k in less than a year.
The trend is yet another savings challenge that has hit TikTok to help motivate you to save money.
READ MORE: The 1p challenge backed by Martin Lewis will save you more than £600 before next Christmas
What is the 100 envelope challenge?
Basically, you will need 100 envelopes numbered 1-100. Each number on the envelope will indicate how much cash you need to pop into that envelope so envelope number 1 means £1, number 2 is £2, with envelope marked 100 being £100.
Each week, you will pick two envelopes at random - give them a good shuffle so you don’t know which one you’re picking out. Once you’ve picked an envelope, you have to put in the number of pounds as is written on the envelope.
How much can I save?
The goal of the envelope challenge is that you will have saved £5,050 in less than a year.
However, if this is not a realistic goal for you, you cut back to 50 envelopes, lowering your savings goal to £1,275.
How long does it take?
The aim is to hit the 5k in less than a year - if you pull two envelopes a week, you will have completed the challenge in 50 weeks.
If you’re having a particularly good month financially, some TikTok users have recommended pulling a third envelope in order to reach your target quicker.
If some weeks you’re afraid to pull two high envelopes, people who have taken part in the challenge have recommended splitting the envelopes into two piles. If you split them from 1-50 and 51-100, you can choose if you’d rather select an envelope with a lower or higher value.
What if I don’t want to use cash?
Cash is not everyone’s preferred means of spending money or saving it - however it is recommended to use cash for this challenge as an added motivation to see how much you have physically saved so far.
Alternatively, you could try an online banking version whereby you set up a savings account or vault where you add the number you pull into a bank account rather than putting it into an envelope.
If trying the digital method, using a jar, put in scraps of paper numbered 1-100 and instead of pulling an envelope out twice a week, pull out two numbers from your jar and bin them once you’ve entered the cash amounts into your savings account.
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