Guys, I love me a good savings challenge to bring the motivation. Because honestly, saving money can be boring.
Your savings account is sooooo slow at building and there’s so many other things you can think of to do with that money RIGHT NOW (not a very patient person here!)
A good savings challenge could be just what you need to kick your butt in gear and GO save that money!
What you’re going to learn:
– The top 7 savings challenges to build your emergency fund
– Why you need an emergency fund and how much you should have
– What kind of emergencies you should use your fund for
Why you Need an Emergency Fund
Your emergency fund is quite possibly the most important savings account you can have. Nobody’s perfect, life happens (and trust me, it will always happen!)
After we started listening to Dave Ramsey and really following his advice we saved up our $1,000 emergency fund (this is the first step) we actually had a real emergency.
We were coming home late at night in the middle of winter and I just had this weird feeling that Myles needed to slow down. Usually I have that feeling because I’m an A+ passenger seat driver and panic at the smallest things. However, not even 5 minutes later we hit a giant pothole in the road. 30 seconds later the car made a lovely ding confirming our biggest fears; low tire pressure.
We were able to pull off a mile up the road and sure enough our cheap, plastic rim was bent. The next day we took our ONLY vehicle in to get the rim replaced.
Christmas had just eaten away all our money, we were poor newlyweds and the concept of budgeting was brand spanking new.
I learned 2 lessons in that experience:
– Myles should listen to me more when I tell him to slow down
– Emergency funds save lives (even if it’s your cars life)
Now that I’ve got you sold on starting an emergency fund, let’s talk about how much you need.
How much you Need in your Emergency Fund
I’ve loved Dave Ramsey’s rule of thumb and think it applies so well to every situation, whether you’re a broke newlywed or broke with kids. The first part of your emergency fund is saving up $1,000 dollars.
1. Save up $1,000 dollars
After you have your $1,000 dollars in place you’re going to focus on paying off debt. I won’t get into all the details of how to go about paying off the debt, because Dave Ramsey explains it pretty dang well here.
2. Pay off remaining debt (besides the house)
After your debt is paid off (not including the house) you’ll save 3-6 months of your expenses for your emergency fund.
3. Save 3-6 months of your expenses
This means that if you have absolutely no income coming in you’d be able to live off your emergency fund for 3-6 months.
How to Calculate your 3-6 Month Emergency Fund
You’ll start by adding up all expenses then times it by 3. That will equal your 3 month emergency fund. Take the previous total expenses number and times it by 6, this will be your 6 month emergency fund. Your goal is to be between those two totals.
Monthly expenses –
Mortgage/rent: $1,500
Utilities: $55
Insurance: $115
Groceries: $150
Fuel: $55
Misc: $250
= $2,500 in expenses
3 month savings – $7,500
6 month savings – $15,000
If those were your exact expenses up above, first I’d be pretty scared that I know exactly what you spend, second you’d shoot for the $7,500 dollar to $15,000 dollar range for an emergency fund.
Obviously your expenses are going to look different than the ones above (unless I’m just really good). If you’re doing your budget every single month you’ll know exactly how much you’re spending on expenses.
If you need help budgeting as a beginner you can find an entire guide here.
Where to Keep your Emergency Fund
Now that you know how much to save for your emergency fund, it’s the matter of where to keep it.
For us, we feel better keeping it in the bank in a simple savings account. You DO NOT want to use this as an investment and want to be able to get access to it at any time.
Motivating Savings Challenges
Now onto the fun part! There’s no better feeling of accomplishment and that’s exactly what these savings challenges are meant to do.
$1,000 Emergency Fund Savings Challenges
1. This first one is an awesome started for saving that first $500. Once you hit that milestone, the second half seems to add up so much faster.
I love that it’s a 31 day savings challenge and the daily amounts that you save are so minimal that you won’t even notice it happening!
2. If you’re opting for a longer time frame to save up, this one is for you. It’s a 10 month plan helping your money grow to that $1,000 dollar emergency fund savings. She even has an awesome printable guiding you through each week.
It starts in January but you could easily start it in any month and follow along.
https://www.amomstake.com/emergency-fund/
3. This is a really unique way of saving your money per paycheck. It’s for families who already have a very tight budget or are lower income. There is a printable that you can follow along with to help guide you each paycheck.
A Realistic Money Savings Challenge for Smaller Budgets
4. Saving money has a lot to do with habits – and that’s exactly what this money savings challenge does! It’ll help you get into the habit of saving by doing it for 52 weeks – that’s right people a full year.
52 Week/$1,000 Savings Challenge: Free Printable Tracker
5. If you’re looking for something not quite as short as 31 days and not quite as long as 1 year when saving up your emergency fund, you could try this 12 week savings challenge. You can do a lot in 12 months, and saving up a $1,000 emergency fund could be one of them!
https://livinglowkey.com/money-saving-chart/
6. Now that you’ve saved your $1,000 emergency fund, paid off debt (besides the house) you can now focus on saving even MORE! This 52 week money savings challenge will help you save $5,000.
You could easily double the weekly savings and make it $10,000 at the end of the year. And yes, there is a totally rad free printable for you to follow along for all 52 weeks.
11 Things You’re Spending Too Much Money On: A Saving Money Challenge
7. Last, but not least – the $15,000 dollar savings challenge. We saved up $15,000 dollars in only 4 months. And while that sounds like a big chunk, we made some big moves to make that happen. A lot of hard work for 4 month paid off (literally). There’s even a savings tracker printable to color in as you reach your goals.
How we Made an Extra $15,000 Cash for a New Car in 4 Months
