The 100 Envelope Challenge: A Fun Way to Save Thousands

A new internet challenge has taken the world by storm, promising to help people save thousands of dollars in just a few months. The “100 Envelope Challenge” is a simple yet effective way to stockpile cash for the future, and some super-savers have already collected over $5,000.

Saving money has never been more fun

Here’s how it works: you start with 100 envelopes, numbered from 1 to 100. Each day, you deposit the dollar amount that corresponds to the envelope number. For example, $1 on envelope number 1, $2 on number 2, and so on. In less than four months, you’ll have saved a whopping $5,050.

“When saving money becomes a ‘challenge,’ it can be a motivator, especially when it results in $5,050 of cash.” - Howard

The method was originally made popular by a creator known as Milly (@budgetwithmilly) on TikTok, where she educates her 45,000 followers on how to be economical. Check out her TikTok profile for more financial tips.

The beauty of the challenge lies in its flexibility. You can stow away money in chronological order or pick a random envelope on a given day. Either way, you’ll end up with the same end result: a boatload of savings.

The 100 Envelope Challenge is a fun way to save money

Experts agree that the challenge is especially beneficial for those who are more visual. Seeing the dollar bills pile up can be a great motivator, and it’s a lot harder to spend money when you can see it sitting in front of you.

“Methods like the 100 envelope challenge can help because it turns saving into a game, and you have a clear path and goal to follow, which reduces the mental load of planning and staying focused.” - Andrea Woroch

Of course, saving money is a net positive habit, but the envelope challenge is especially beneficial for those who are more visual. You can see the dollar bills that you are saving and not spending, rather than swiping a plastic credit card.

However, experts warn not to deposit so much cash that it disrupts your ability to pay off your credit card bill or results in an account overdraft. It might not be realistic to put away as much cash as the envelopes require, especially when you’re entering the double digits.

Luckily, no one is holding you accountable except for yourself, so you can customize the dollar amount to fit your budget. As Andrea Woroch notes, “Ultimately, you’re still saving - and saving more than if you didn’t participate in the challenge at all.”

While the 100 Envelope Challenge might not be realistic for everyone, experts offer alternatives or modifications to the challenge that relieve the stress of budgeting. For example, you could digitize the challenge by transferring a dollar amount from a checking to a savings account every day.

A high-yield savings account can help your money grow over time

That way, you get the best of both worlds: you’re saving money safely and raking in the compounding interest that accompanies putting money in the bank. As Howard notes, “A high-yield savings account will help your money grow over time, even after the 100-day challenge ends. We’re currently in a competitive rate environment which is great for saving.”

So, are you ready to take on the 100 Envelope Challenge and start saving thousands? Remember to stay disciplined, stay focused, and most importantly, have fun!