How the 52-week savings challenge can help you save $1,300 in one year

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Maybe you want to get better at saving money, but it feels like a struggle. You’re not the only one: A Bankrate poll found that 53% of American workers say it’s difficult or impossible to consistently save enough money to feel comfortable for emergencies, retirement, or any other reason, given their current financial situation.

However, having a healthy savings account balance is crucial for staying out of debt and reaching your financial goals. Starting small and building positive saving habits can help you get the ball rolling. For many savers, the 52-week savings challenge is a great way to do just that.

The 52-week savings challenge helps you set aside a small amount of money each week that snowballs over a one-year period. The idea is that you learn to save money consistently over time and adjust that weekly deposit upward little by little.

The challenge starts with saving just $1 the first week, $2 the second week, $3 the third week, and so on. By the final week of the challenge, you’ll set aside $52. And at the end of the year, you’ll have a total savings of $1,378.

Experts say that these types of challenges can motivate savers to stick to a strategy. “Savings challenges work because they ‘gamify’ something that might seem dull, boring, or hard,” said Lindsay Bryan-Podvin, a financial therapist at Mind Money Balance. “We may be more likely to follow through when we take something challenging and put a fun spin on it.”

Here’s a breakdown of how much you can expect to save over the course of a year:

Where you put your money is just as important as how much you’re saving. Before you begin the savings challenge, think carefully about what type of bank account is best for your situation.

A traditional savings account can provide a safe place to store your savings with easy access to those funds. However, it may not be the best option when it comes to earning interest and maximizing your savings over time.

The national average rate for a savings account is just 0.39%, according to the FDIC. On the other hand, high-yield savings account rates can be as high as 4%.

High-yield savings accounts offer the same security and liquidity as traditional savings accounts, but also provide an opportunity to earn compound interest at a higher rate. This means your money will grow faster over time.

Another potential option is a money market account. This type of account works like a hybrid checking and savings account. Money market accounts also tend to offer higher interest rates than traditional savings accounts, along with check-writing and debit card privileges. However, you may be required to maintain a minimum balance in order to earn the highest advertised rate and avoid fees.

Read more: Money market account vs. high-yield savings account: Which is best for you?

If the 52-week savings challenge sounds like it could help you, here are a few steps you can take to get started:

Having a clear picture of what you’re saving for can help you stay motivated. Using this challenge, you can expect to save just over $1,300, which could be enough to pay off a debt, start an emergency fund, or pay for an upcoming vacation.

Read more: What’s more important: Saving money or paying off debt?

Before you start this savings challenge, assess your current financial situation to determine if you have the funds available to make weekly savings deposits. If not, you may need to figure out if there are expenses you can cut to make this challenge easier. For example, maybe you have unused subscriptions that are eating into your monthly budget that you could freeze or cancel to come up with extra cash.

As mentioned, there are several account types you can choose from. Each has its pros and cons; the best choice will be the one that helps you stick with your plan, avoid fees, and reach your goals.

Read more: What’s more important in a bank account: High interest or low fees?

Consistency is key when it comes to saving money. The goal is to build positive habits that carry on even after you’ve finished the challenge.

“These savings challenges can be helpful because they start out small and grow over time,” said Kendall Meade, a financial planner at SoFi. “They also get you used to saving, which can carry over once the challenge is over.”

Meade added that one pitfall to avoid is rewarding yourself after the challenge is over and spending that savings or spending more than you would have without ever doing the challenge. That’s why it’s important to have a clear goal in mind when you start.

Here are a few tips for getting the most out of this challenge and staying the course:

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