Surveys tell us that nearly 60% of Americans have less than $1,000 in their savings accounts. If you’re one of the 31% of Americans who have more than $5,000 saved, you might be shocked by these stats–but there’s a good chance you’re as familiar as we are with just how hard it is to save! If you struggle to save money, the Penny Challenge might be for you.

The problem is that a lack of savings can cause huge problems. While we expect major health emergencies or natural disasters to throw us off track when we’re living that close to the wire, even something as relatively simple as a tire blowout can set us back in a huge way, and have ripple effects throughout our lives and relationships.

The truth is, a savings account helps us handle emergencies and get back on our feet safely. Saving, however, is anything but fun, and there’s a reason it’s so difficult–it seems like living expenses grow by leaps and bounds every year.

What is the Penny Challenge?

You might have seen the Penny Challenge floating around the internet and social media. It’s a self-challenge designed to help you save money. If you’ve ever participated in an office weight loss pool or a Fitbit challenge, you’ll be familiar with the concept of using something simple like small steps to add up to big rewards.

Here’s how it works: on January 1st, you save one penny. You can deposit your savings in a bank account, but our recommendation is to make it fun and super obvious, and deposit it in a glass jar where you can see it every day! On January 2nd, you’ll save two pennies.

Multiplying Pennies

On January 3rd, you’ll save three. By the last day of the year, December 31, you’ll save $3.65 (or, three hundred sixty-five pennies). When it’s all added up, you’ll have $667.95!

This kind of challenge is fantastic for somebody who wants to start small and nail the routine of saving. It’s extremely visual, and if it has any flaws, it’s that you are starting slow–in the big scheme of things, $667 doesn’t seem like a lot of money.

penny in jar

The Power of Investing

That’s simply a misconception. If you were to, say, add that $667 to your retirement accounts (that probably average a 7% return), in twenty years, your meager bunch of pennies will have turned into $2,584! Can you imagine your twenty-year number would look like if you did the penny challenge every year?

The 52-Week Challenge

The penny challenge is a great stop, but if you feel like you’d like to take things up a notch, you can try the 52-week challenge. On the 1st week of the year, you save $1. On the second week, you save $2, and so on until you reach the last week of the year and save $52. If you meet your savings goals each week, you’ll have saved $1,378, almost three times as much as if you’d been saving pennies!

The downside to the 52-week challenge is that it can be hard to save during those final weeks, especially because they hit over Christmas, which is one of the hardest months of the year for most people to avoid over-spending, let alone saving money!

How to Do the Penny Challenge

The most important thing to remember when doing the penny challenge is to stick to a chart! Print one out and tape it up so that you can see it every day. Better yet, don’t just put your pennies in a jar; mark off each day that you complete the challenge. The longer you go with a string of crossed-out days, the more you’ll hate breaking your streak and the more likely you’ll be to stick to your savings goal.

Even better? Get some friends in on the challenge, too! Having accountability and working together as a team to save money will help all of you get closer to your financial goals.

What is the Reverse Penny Challenge?

The reverse penny challenge is exactly what it sounds like. On January 1, you’ll save $3.65, on January 2, you’ll save $3.64, and so forth until on December 31, you’re saving a single penny.

This method works great for people who tend to start strong and not finish challenges or for people who often don’t have much money left in December. It’s especially helpful because you get to see major strides right away–no waiting months and months for your money to start building up!


Microsaving (saving your pennies) sounds so small it almost seems worthless, but financial experts know that the truth is in the consistency of your routine. Think back to the tortoise and the hare–it’s not the people with lots of money who win the race, it’s the people who learn to be consistent about saving. And that’s exactly what the penny challenge helps you do!

lady receives good news via her laptop

Cutting Expenses and Budgeting

If you want to succeed with the penny challenge, you’ll need to learn how to budget and cut expenses. Neither is difficult or hard and being able to save every day will help give you an extra incentive to do so!

Starting to budget and finding expenses you can cut at the beginning of the penny challenge means that when you hit mid-year and need to start saving a dollar or more every day, you’ll have the funds to do so.

Why All the Hype?

Even if you consistently spend more than you earn and don’t think an extra $667 can do much for you, the penny challenge will still make a difference. It will help you prove to yourself that you can reach a savings goal.

Next year, you can shoot for the 52-week challenge! It will help you build routine, as we mentioned earlier. And the penny challenge will help you replace the poor money habits you’ve probably been making with the kind that are good for you long term.

For example, running through the drive-through after work can seem like a reward for a stressful day, but we all know fast food isn’t doing anything for our health, and those receipts can add up over time! Learning how to replace those drive-thru runs with easy, delicious meals you can make at home will help you learn how to save money and improve your health, all at once!

What Should You Do to Stick to the Challenge?

The funny thing is that when our finances get healthy, that health often spills over into other areas of our lives–like our physical health or our relationship health! Maybe it’s the extra confidence we build or the fact that we’re teaching our brains good habits.

Either way, here are some tips for sticking to the challenge:

Marker checking off tasks
  1. Make a Plan – Your penny challenge is doomed from the start if your entire year’s plan for saving pennies is to dig through your couch cushions. Instead, learn how to make a budget. There are tons of great apps and financial services that can help with this. Just tracking your money for a month and seeing how much you spend eating out or on random expenses will probably surprise you!
  2. Envision What You’ll Do With Your Earnings – Even if you won’t be investing your earnings (but really, you should be!), thinking about what you’ll do with all the money you’re earning can help motivate you to stay on track.
  3. Get Accountability – Accountability can be one of the most helpful tools in reaching your goals. Even if you can’t find a partner to do the challenge with you, find somebody who will ask you how the challenge is going each week. Who knows–when they start seeing how well you’re doing, they might want to join in, too!
  4. Create Visual Reminders – We already mentioned how you should place the penny challenge chart where you’ll see it every day, but don’t forget to add a calendar so you can cross of those days, too! And of course, don’t forget the glass jar to save your pennies in, either.
  5. Start Saving Those Pennies!

Other Means of Saving Money

The penny challenge isn’t the only way to save money. Here are three more easy ways to challenge yourself:

  • Set up an auto draft from your checking account to a savings account to go through on payday (even $20 per pay period can add up over time)
  • There are apps and some banks that automatically round up your purchases to the nearest dollar–and save it for you
  • Challenge yourself to a no spend month, where you buy only the most basic necessities!

Wrapping Up

The penny challenge can be a powerful way to learn new savings habits and gain financial confidence. And don’t let the fact that it isn’t January 1st deter you. You can get started now with just a single penny. Download a chart so you can start saving right away!