8 Financial Challenges That Will Help You Save Money & Build Weath | Frugality Magazine (2024)

I’ll be the first to admit that sometimes personal finance can be a pretty boring subject.

On other occasions it can be downright scary (especially if you’re in debt).

But there’s no denying it’s importance.

So how do we make a boring yet essential subject more enticing?

Quite simply we turn it into a challenge – a game if you will.

By choosing a challenge and then doing your hardest to succeed at it you’re able to make long-term financial gains with minimal upfront effort.

And like playing your favorite video game it can also be fun to regularly test yourself and see if you can beat your last “high score”.

If that sounds good then here are some of my favorite personal finance challenges that will help you to save money, pay off debt and build wealth for the future…

Challenge #1: Create A Budget

Creating a budget should be the basis for all your other financial decisions.

It allows you to see where your money is going each month, and to set realistic targets for controlling your spending, thus speeding up the process of wealth accumulation.

The problem is that creating a budget is far from easy the first time, though fortunately there are a number of tools like Personal Capitalthat can help you to do just that.

So go on – put aside some time this week, settle down with your tool of choice and create yourself a spending plan.

If you want to take it “up a notch” then do as I do and take some time at the end of each month to see how you got on.

Congratulate yourself for success, mentally berate yourself anywhere you’ve overspent and take the time to see what other cuts in your spending might be possible.

As time goes on you’ll be shocked at just how much spending you can really cut if you take it a little at a time!

Challenge #2: Reduce Your Utility Bills

Utility bills; possibly the most boring expense that many of us have.

But increased competition for your broadband, phone line, gas, electricity and water mean that bargains can be had by savvy shoppers.

Don’t just accept what you’ve been paying; set out on a mission to slash your utility bills and save money for months to come.

The easiest place to start is with one of the many price comparison tools designed specifically to help you find the most competitively-priced utility companies out there.

The process of finding and switching your utilities takes mere hours (if that) and you’ll be shocked at how much money you could be saving right now.

Challenge #3: Start Saving (Even Just A Dollar)

If you’re struggling with your finances then it can be all too easy to put off putting money into savings.

After all, perhaps you’re struggling to make ends meet right now – so how on earn are you going to start filling a savings account?

Well there are two suggestions here.

Firstly, many of the other challenges listed here are designed to save you money and reduce your expenses. By following these first you will invariably find you have some disposable income to save.

Secondly, try investigating any workplace schemes that may be operating at your place of work.

In many cases you can automatically deduct a sum from your pre-tax salary and have it placed into a tax-sheltered investment or retirement fund.

And because it comes out beforetax it’ll cost you even less than you might expect.

Now here’s the clincher: saving money is like going to the gym.

The more you do it, the easier it gets.

So don’t feel the need to start saving $500 a month from the get-go (unless you want to).

Feel free to start small, and then just aim to increase your savings rate over time.

So long as you keep challenging yourself and increasing the amount getting paid into your account you’ll be able to watch with satisfaction as your wealth continues to grow in the coming years.

Challenge #4: Create A Financial Plan For The Future

Don’t leave your finances to chance; if you want to build real wealth then you need to create a plan and stick to it.

While financial plans can change over time – based on your goals and available income – just taking a few hours to chat about your finances with your partner and then create a simple “this is what we’re gonna do” document can really set you up for success.

Challenge #5: Ruthlessly Slash Your Spending

As a naturally-frugal person this is a challenge very close to my heart.

The process is pretty simple; at the end of each month sit down with the budgeting tool of your choice and figure out there spending cuts can be made.

For example could you spend less on groceries? Could you avoid eating out? Could you pay down more debt so your repayments are less? Can you spend less on rent?

Each month you do this your expenses will go down.

At the same time your disposable income goes up. And with it, your ability to grow wealth.

So don’t rest on your laurels; grab a pen and paper and figure out what changes you can make. Then at the end of each month look to prune further, making your progressively more frugal (and wealthy) as time goes on.

Trust me – my expenses have been decimated carrying out this simple challenge each month – and they keep on going lower. Call me sad, but this is my idea of fun! 🙂

Challenge #6: Cut Your Cell Phone Bill

In today’s world very few of us have no cell phone whatsoever.

But many of us are paying over the odds, either saddled with an over-priced tariff just to cover the cost of an expensive cell phone or simply because we haven’t looked to see if there are better deals around.

Here in the UK I have taken my monthly bill from around £40 a month down to £15 – and I still have minutes and texts left at the end of the month. I wrote a detailed guide about reducing your cell phone expenses here.

Challenge #7: Beat Your Interest Rates

Interest rates can either help you or hinder you.

On your credit cards, loans and mortgages, a lower interest rate will save you money. Conversely when it comes to your savings and investments you want to earn as much interest as possible.

So attack each of your financial products one by one, looking to reduce or increase your interest rate where appropriate.

Not only can this simple challenge make you extra money on your savings but also save you money on your debts – that’s means you’re winning on both sides of the equation.

Challenge #8: Land A Pay Raise Or Promotion

Most of the challenges we’ve talked about so far relate to savingmoney – but you can just as easily build wealth by earning more. Indeed, as you can only cut your budget so much, arguably increasing your income can be even more powerful.

Of course not all of us can change jobs at the drop of a hat, and there may not currently be an opening higher up at your current job. But considering the options and planning for them can be very beneficial.

As an example, my girlfriend and I recently sat down with details about the various pay-grades available at her job.

We worked out that in less than 12 months she could enter the next band – and benefit from a healthy pay raise – just by ticking off a few more minor responsibilities.

Armed with this knowledge – and a workable plan – she’s now ticking these off like crazy. At her next appraisal (early next year) she will have everything necessary to request – and land – a pay raise.

What are you doing to increase your future earning potential?

Question: have you ever tried any of these challenges? What do you do to make personal finance fun? Please leave your thoughts in the comments section below…