If the resolutions you set yourself seem like a distant memory already, money-saving expert Martin Lewis has one that anybody can take up, starting now.
During the latest episode of The Martin Lewis Money Show Live, the financial guru explained the “1p Challenge”, which is probably one of the simplest and best-known ways to start building a money pot.
Martin explained to viewers: “There’s a big savings community out there who do this, it’s called the 1p Challenge.
“Basically, you save a penny on the first day of the year in a jar or piggy bank, 2p on the second, 3p on the third and keep going throughout the year - by the last day of December you’re saving £3.65, so that would give you £667. 95 in total.”
Martin added that even though we are nearing the end of January, all you have to do is add £2.53 today (Friday) and start from tomorrow, when you will just need to add 23p to get your savings back on track.
How the penny challenge works
Each day you save what you saved the day before, plus a penny more.
So you start by saving 1p, then 2p, then 3p a day – right the way up to £3.65 by the end of December.
If you start on January 1, then by December 31, 2021 you will have saved a grand total of £667.95, however, if you start now, you can easily catch up by adding what you should have put in from New Year’s Day - just £2.53.
Follow this penny savings plan:
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Day 1: Put in £0.01
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Day 2: Put in £0.02
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Day 3: Put in £0.03
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Day 4: Put in £0.04
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Day 5: Put in £0.05
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Day 6: Put in £0.06
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Day 7: Put in £0.07
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Day 8: Put in £0.08
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Day 9: Put in £0.09
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Day 10: Put in £0.10
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Day 22: Put in £0.22
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Total: £2.53
If you’re starting the challenge from January 11, just set aside 66p and you’re all caught up, then continue to add the relevant amount every day until day 100.
From Day 100 add:
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Day 100: Put in £1.00
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Day 101: Put in £1.01
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Day 102: Put in £1.02
Double the amount on day 200:
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Day 200: Put in £2.00
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Day 201: Put in £2.01
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Day 202: Put in £2.02
Continue until day 300, then add:
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Day 300: Put in £3.00
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Day 301: Put in £3.01
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Day 302: Put in £3.02
On the final 365th day, drop in £3.56 and it's time to cash in your jar.
If you have followed the plan throughout the 12 months, you should have saved £667.95 to start off the New Year.
Money-saver Neil got in touch with Martin to say he does the challenge the other way around so that he’s not having to put more money aside in December.
This method would mean putting away £3.65 on January 1, £3.64 on January 2, £3.63 on January 3 and so on.
To get caught up with this savings method, put in £77.91 today (Friday) and start on Saturday by adding £3.43, then £3.42 on Sunday and so on.
