Boosting Savings: $5 Challenge

are-you-up-for-the-challenge

In a previous post I briefly discussed money challenges and how people use them as extra motivators to either boost savings or pay down debt. Whether you’re saving for a vacation, a house or just want to improve your money management skills, you can never have too many tools or tricks at your disposal. This is why I encourage people to get creative about improving their financial behaviors. Not everyone gets as excited about personal finances as I do, so it doesn’t hurt to find a way to spice it up.

Today’s post is dedicated to the $5 challenge.

What is it: This challenge is a little bit more difficult than the others. As we become more and more technology-driven, we are increasingly becoming a cashless society. However some people among us still prefer cash. While that is not the case for me, there should still be a challenge for those who favor the old school way.

Every time you break a large bill, you take out all the $5 bills and you save them somewhere of your choosing for a year. For example, if you buy something for $13 and you broke a 20 to do it, you would get $7 back. Should you get back a 5 and two 1s, you would keep the $2 but save the $5 bill. Say you broke a $50 bill, and got $37 back in the form of a 20, three 5s and two 1s, you would save the $5 bills and keep the $22. Since this it could add up fast, I would recommend a bank account rather than running the risk of losing it by keeping the cash.

Outcome: The results will vary. The more 5s you get, the higher your savings.

Variations: If you’ve already done it, try the same challenge with a $10 bill as a booster.

Why I like it: It is not for the faint of heart. You’re savings are at the mercy of the cashier. If she’s out of 10s and gives you three 5s, the rules require that you save then entire $15s as opposed to having to save $5 if you got a 10 and a 5 back.

If you love cash, this is the challenge for you.

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