If you appreciate the concept of a rainy day fund, you will love the 100 Envelope Challenge. It’s a fun way for you to keep setting aside money that is not to be used until your rainy day. Do this challenge right, and you could find yourself at least USD 5000 richer in 4 months.
While this trick helps you save money, no doubt, there are also some demerits to the 100 Envelope Challenge. Are you ready to find out how to do the challenge? Read more to help you get started.
What Is The 100 Envelope Challenge?
The 100 Envelope Challenge is a viral money-saving life hack that first blew up on the social media platform TikTok a while back. It’s a unique banking system that encourages you to increase your savings.
This is a challenge that will last approximately four months. All you have to do is keep setting aside money each day for a new envelope until you reach the 100th one around the 4-month mark. There are a couple of variations of the challenge but they all allude to the same TikTok fad.
How To Do The 100 Envelope Challenge?
All you need to do is get 100 envelopes and number each of them from 1 to 100. Store the envelopes someplace safe like a shoebox or a locked cabinet. For the next 100 days, you pull out one envelope each day and insert the same amount of money as the number on it. So for instance, if you draw envelope no. 18, you need to put USD 18 into that envelope that day.
Do this for a hundred days straight and you will have USD 5,050 at the end of the challenge. You could use that money for a vacation or as a down payment on a new car, it’s up to you. Most people do the 100 Envelope Challenge, but depending on your income and living expenses, you could undertake some of the smaller variations like 50 or 20 envelopes.
Does The 100 Envelope Challenge Work?
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If you’re making at least USD 1,200 a month after rent and other living expenses, and your goal is to save USD 5,050, then yes, the envelope challenge works. It’s a nifty, fun, and motivating way to save money compared to depositing it in your bank. You can share your progress on social media if that helps you stay committed. However, if you don’t have the liquid funds, the challenge is pointless.
Staying committed is probably the hardest part of this challenge. There will be lots of times where you feel like tearing open an envelope so you can go to the bar with your friends or order a fancy meal. The only way to make it to the end is discipline and sticking to the bare necessities for a while. Given that it became popular as a TikTok fad, this challenge can be quite rewarding to you in more ways than just money.
How Much Money Do You Save With The 100 Envelope Challenge?
If you add up the natural numbers from 1 to 100 you will have saved USD 5,050 by the 100th day of your challenge.
Make more envelopes, and you will save more. However, if you happen to give up sooner, there’s no need to feel down.
Here’s a rundown of how much you still stand to save at different milestones of the challenge:
• By the 10th day, you will have saved at least USD 55.
• By the 25th day, you will have saved at least USD 325.
• By the 50th day, you will have saved at least USD 1,275.
• By the 75th day, you will have saved at least USD 2,850.
Featured image source: Pinterest.com