5 Ways to Save up to 5K by December

Recent findings from the Bank of England reveal that 34% of UK adults have no financial savings or less than £1000 in their account. As the cost-of-living crisis continues, much of the UK is apprehensive with regards to their financial future. Here, financial Advisor Pete Ridley at Car Finance Saver reveals the money saving challenges that can save you up to 5K by December along with the pros and cons of each.

The ‘In for a penny’ Challenge = £224

Perhaps the easiest challenge to follow, the 1p challenge requires participants to save 1p every day from Monday 15th May onwards. Starting late? No problem, simply backdate the pennies. Sticking to this challenge will save you £224 by Christmas.

Pros: The ‘in for a penny challenge’, is less intimidating than most challenges as it’s easy to follow and all financial contributions are small.

Cons: Missing a day may seem trivial as saving contributions are so small however, because they are so small, missing several days can dramatically decrease overall your savings pot.

Final Number Standing = Appox. £227

The brainchild of Budget Bro Joe, the final number standing requires savers to check their bank balance daily, a great habit as 57% of the UK population cannot confirm how much they hold in their bank accounts. Once the balance is checked, the ‘final number standing’- requires savers to save the last number of their balance. For instance:

Balance                                      Amount to save.

1,259                                           £9

566                                              £6

24.605                                         £5

By law of averages, saving via the final number standing method will save the average person £227 by December 23.

Pros: Easy to follow and creates a great habit in checking your bank account balance daily.

Cons: This saving challenge can get tricky if you enter your overdraft.

Pay Not to be There = £513.52

Missing an event to save funds or skipping a typical night out? According to recent research, the average consumer spends £73.36 on a night out with friends. If you are missing a night out, save what you would have likely spent. If its an event, save the cost of the ticket or entry fee. Skipping one night out each month, between now and December will save you a total of £513.52.

Pros: This challenge not only creates saving habits but can potentially create habits that are beneficial to your health.

Cons: Fomo!

Envelope your savings = £5,050

Obtaining 100 envelopes, number each from one to a hundred and shuffle. Pick one envelope each day and fill it with the amount shown. Over the course of 3 months, this will save £5,050.

Pros:

This challenge is not for the faint hearted as it requires participants to frequently save large amounts. Remember, you can always adjust the challenge to suit your finances. If stuffing an envelope, a day is unfeasible, choose just a couple a week, or even just the one. You could also reduce the number of envelopes from 100 to 50.

Cons: A big commitment but reaps big rewards.

Not this week, next week = £72

This biweekly challenge sees participants deposit multiples of 4 every other week into their savings. For instance:

Week 1: £4

Week 2: £0

Week 3: £8

Week 4: £0

Week 5: £12

Week 6: £0

Pros: This saving challenge is less intimidating than saving every week.

Cons: As the months go on, the higher the amount saved. This may require some preparation.