As the old saying goes, Christmas is the most wonderful time of the year – but it’s also one of the most expensive.
Research shows that the average British household spends an estimated £719 on the celebrations, on everything from food to presents to decorations, leaving many feeling the pinch when January rolls around.
However, with a little forward planning, next year’s festivities could feel a lot more affordable. The secret? Taking part in the penny challenge, a savings trick which could leave you with hundreds of extra pounds in the bank.
How does the penny challenge work?
The basic concept of the penny challenge is simple – you save 1p on the first day of the process, and then increase the amount by an extra penny every day after, until you reach the 365th day, where you save £3.65. Most people choose to start their penny challenge on 1st January, and end it on 31st December, but realistically you can begin on whichever date suits you best. Either way, by the end you should have saved more than £650.
Day 1: Save £0.01
Day 2: Save £0.02
Day 3: Save £0.03
Day 100: Save £1
Day 101: Save £1.01
Day 102: Save £1.02
Day 200: Save £2
Day 201: Save £2.01
Day 202: Save £2.02
Day 300: Save £3
Day 301: Save £3.01
Day 302: Save £3.02
Day 365: Save £3.65
It’s amazing how your loose change will soon add up – if you stick to the plan, your final total should be £667.95.
How to stick to the penny challenge
- Pick out a jar, purse or other container to store your savings in – or if you prefer to manage your money online, earmark one specific account for the challenge. Visually watching the pot grow each day is part of the incentive (and the fun!)
- Reevaluate your daily purchases, and make simple swaps to cut down their cost. The amount you’d usually spend on a coffee, for instance, could go into your penny challenge pot if you started making it at home instead.
- Set yourself an objective – it might be a home improvement, buying next year’s Christmas presents, paying for a holiday in the sun, or simply creating a safety net to keep in the bank. Having something to aim for makes the money feel more tangible – if you feel yourself getting fed up with putting money away each day, remember how good you’ll feel on day 365 when you achieve that goal.