Last Updated on February 27, 2023 by Melissa S.
You may have heard of the 1p savings challenge, or the penny savings challenge, and while this challenge can be started at any time of the year, there is definitely a surge in popularity at the beginning of the year.
Not only are people geared up with New Year’s Resolutions, but there’s something about starting a 365 day challenge on day 1 of the year that makes it appealing.
However, just like a lot of challenges and resolutions, it can be all too easy to start strong, and then crash and burn before even Valentine’s Day has rolled around.
In this post, we will outline exactly what the penny savings challenge is and how you can avoid the most common pitfalls that make many people give up on this seemingly easy challenge all too quickly.
What is the 1p savings challenge and how does it work?
The concept of the 1p savings challenge is simple – save an amount each day beginning with 1p on day one, then 2p on day two, 3p on day three and so on, until by day 365 you are saving £3.65.
Add all these totals up, and over the course of the 12 months you will have saved £667!
As the maximum daily amount saved is £3.65, which is not much more than a drink in your favourite coffee shop, it seems like quite an easy feat to achieve. However, bear in mind that while month 1 can be a breeze, months 11 and 12 can seem very costly where you are putting away over £3 each and every day.
Of course, if you are used to buying your lunch out or getting a coffee every day, you might not find this amount difficult to find. Or it might make you realise just how much these daily sandwiches and coffees are costing you long term!
How much could I save in a year?
If you completed the penny savings challenge successfully, you would have saved £667.95 over the course of 12 months, which would be a fantastic amount to put towards Christmas, a holiday/vacation, or a DIY project.
How should I save the money?
Some people like to physically save the money in a piggy bank or jar, and while this may not be a problem in month 1, you may find that you run out of coins and spare change once the totals start to add up.
I for one am somebody who rarely has cash, and when I do, I find it gets used up quickly for “cash only” situations. Having a physical jar of money within reach may also be too tempting to dip into, and all of sudden your total is down, and motivation to continue the challenge is lost altogether.
For these reasons, some people prefer to complete the penny savings challenges via their online bank. Certain banks and money saving apps such as Monzo and Plum have an automation for this challenge so the money is automatically taken each day, or rounded up weekly.
Of course, without an automation it would be a hassle to transfer 1p, then 2p and so on each day, so you may choose to round up a weekly or monthly amount, either manually or by standing order or direct debit.
Balancing the 1p savings challenge into daily, weekly or monthly amounts
If you wanted to balance out the amount saved to avoid the harder days, you could choose to average it all out. £667.95 divided by 52 weeks equals approximately £12.85 per week.
Monthly, £667.95 divided by 12 would be a saving of approximately £55.66 a month.
If you wanted to save daily, your amount would be £1.87 per day.
You could even set up a direct debit to transfer the money automatically.
This might take some of the “fun” out of the challenge but it also might be the most practical, and therefore achievable way for some people!
Variations to the 1p Challenge
If you like the idea of manually saving the money into a pot, but don’t want to be faced with a couple of tough months of saving over £3 per day towards the end, some people prefer to pick an amount at random and cross off the grid once it has been saved.
This way you can balance out the easier days with the more expensive totals.
You could also choose to complete it in reverse and make the first months the toughest!
However you choose to complete it, you can get a free copy of the penny savings challenge to print out within the opt-ins on this page.
Alternatives to the 1p Savings Challenge
If you think this challenge is too much of a faff for you, you can put your savings entirely on autopilot with Plum. Plum’s AI carefully calculates the amount of money you can set aside based on your income and expenditures.
I have been using Plum for over 5 years now and would highly recommend it. You can read my full review here.
£100 Monthly savings challenge
If you prefer short and snappy goals, how about this £100 in 1 month savings challenge? The principles work in exactly the same way as the penny savings challenge, just with larger amounts over a shorter time period.
In the image below, taken from my free printable, you can see the month has been divided up into 28 days for ease (which also means you can split some bigger amounts or have a couple of days off from saving!)
On each day you save an amount between £1 and £7, so nothing too eye watering. Following the same rules of the penny challenge, you can complete the days in order, or mix them up and cross off a random amount each day.
Similarly, you can also choose to do this savings challenge manually or via online banking.
If you stick with it, by the end of the month you will be £100 better off!
1% at a time savings method: Penny Challenge Version
This savings challenge works in a slightly different way and is flexible to be adapted however you wish.
The basic premise is that you decide on an amount you wish to save, for example, £1000. The chart is broken down into 100 boxes so each box represents 1% of the target, in this case £10. Each time you save £10, tick off or colour in a box.
To adapt this for the penny challenge, your total would be £6.68 per square. But remember, instead of 365 days you are dividing this into 100.
This doesn’t have to be the amount you save each day – and there is nothing to stop you rounding up to £700 to make each square worth a rounded £7.00.
Which savings challenge suits you?
I hope this post has given you plenty of ideas of how you can adapt the penny savings challenge to suit you, or ideas for different ways to save. Don’t forget to fill in the form to download your free savings printables to accompany the methods outlined in this post.
About the Author
Melissa is a working parent who left behind a senior management salary for a better work/life balance. Following her own money saving and money making strategies she was able to clear debt and live a life she loves. Blogging, selling digital products on Etsy and selling preloved items on eBay are her favourite side hustles. Read her story here.