The five dollar challenge is a savings builder

At The Penny Hoarder, we kind of like Abe Lincoln.

After all, our favorite coin has his face engraved on it.

But even though we like our pennies, we also like seeing Lincoln’s bearded mug on the front of the five-dollar bill. Saving a five-dollar bill is more profitable than hoarding coins.

How to save money with a five-dollar challenge

The five-dollar challenge is a simple money-saving strategy-it does not require much thinking or effort. You don’t have to do any mathematical operations. You don’t have to cut expenses. You don’t have to save a substantial sum of money every month.

All these challenges require you to hide each $5 bill you get as change. That’s it.

If you’re paying and the cashier hands you a bill with Lincoln’s serious face, don’t use it to buy coffee or a cheap lunch from the drive. Use the five-dollar bill for your savings.

Depending on the length of time you participate in the challenge, you may end up depositing a lot of cash. Five-dollar bills can add up quickly. Just set aside two US$5 bills a week and save US$520 in one year. And because the amount is quite small, your savings can be increased without even missing your 5 dollar bill.

Where to put the money

Separating all your $5 bills from other expenses is the key to success in this challenge. Many people who participated in the $5 challenge hid cash in cans, envelopes and even shoe boxes.

You can keep calculating your balance, or you can wait until the challenge is over to be surprised by the total.

However, if you don’t want to keep all your cash at home, please deposit your savings into your savings account every week.Your savings will be insured, you will stay away from your hiding place, and you can even earn interest-especially if you have High-yield savings account.

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Participate in the challenge when not using cash

If you are used to swiping your debit card anytime, anywhere, this does not mean that the five-dollar challenge is not for you. You only need to do some extra work.

When you shop, think about what change you will get if you pay in cash. For example, if your Target operating total is 84.25 US dollars, and you should have used a 100 US dollar bill to pay, you may receive a 5 US dollar bill, a 10 US dollar bill, and 75 cents of change. Before you drive out of the parking lot, please log in to your online bank account and transfer $5 to your savings.

For simplicity, you can decide to transfer $5 to your savings account every time you swipe your card. Or, you can be more selective and just add $5 to your account when making a specific purchase (such as filling up a gas tank).

Another option is, well, use cash instead-but only for yours Interesting money expenditure. Insist on swiping your card to buy groceries or toiletries, but pay in cash when you go to buy shoes or go out to eat. Any $5 change bill you receive will be-you guessed it-directly into your savings.

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Customized five dollar challenge

If loosening the $5 bill does not work for you, you can modify your money-saving efforts while still sticking to the basic premise of the challenge.

Save all the coins you get as change. (You know, the piggy bank is not just for kids.) Or you can put aside all the $1 bills you receive.

Using a smaller currency does not mean you will save less money. For example, if you often receive more 1 dollar bill change than 5 dollar bills, you may end up saving even more.

Have a savings goal

Whether you plan to stick to a savings challenge for months or a year, it’s best to have a plan to do something with the money you save.

You can buy some good things for yourself, such as spending a much-needed holiday or buying something on your personal wish list.Or you can use the money to reflect your financial goals, such as Reduce your student loans or Credit card balance.

Regardless of whether you decide to use your savings, keeping your ultimate goal in mind will give you motivation to stay consistent-and don’t mine your inventory until the challenge is over.

Nicole Dow is the senior writer of The Penny Hoarder.