Money saving tips: Woman shares savings challenge that helped her save over £3,000 | Personal Finance | Finance
The 100 Envelope Challenge is a money saving challenge that involves numbering envelopes from one to 100 and filling those envelopes with the corresponding amount in cash. Alexandra Racon was able to use cash to help her make a more active effort to save.
By using savings challenges, she has been able to save over £3,000 that she would have otherwise spent.
Alex explained to Express.co.uk that she has been taking part in the 100 Envelope Challenge.
She said: “I started this at the beginning of the year when things weren’t as bad as they are now but it’s become second nature now.
“I pick one envelope a week so it’s been manageable to just put the amount away and not even think about it.
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“We’re coming into my ninth month and I’ve saved £3,457 just by saving a random amount each week and keeping the cash in an envelope.
“I’ve split the envelopes into two piles of one to 50 and 51 to 100 so I don’t get four large amounts in one month.
“I pick from the low piles more than the high pile in weeks when I’m struggling.
“With energy bills about to rise, I probably will need to dip into what I have saved, but it’s been such a relief knowing I have this extra cash around just because I made the conscious decision to start this before.
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In light of the Which? study, Savoo has put together a number of ways people can keep a good oversight of their finances.
One of the main benefits of using cash is that it reduces people’s risk of overspending, and in some cases, going into debt, compared to using a card.
Unlike credit and debit cards that encourage more spending, once cash is gone, it’s gone, and people are unable to rely on anything else to make a payment.
Physical cash payments may also help people avoid any impulse purchases, which many people have experienced.
They explained different saving techniques such as the envelope budgeting system.
This technique involves separating cash into individual envelopes to represent different spending categories at the beginning of each month.
Doing this will enable people to be extra conscious of what money is physically being taken out of each category, whilst also making them more aware of the areas you are spending the most.
Increasing awareness of people’s spending will then help them find ways to cut back on certain areas that they may not have realised they were overspending in.
Alternatively, people can collect their loose change in a jar over time to manage their cash effectively.
Over time this will build up and likely leave people with a significant amount that could help contribute to a food shop, a holiday, a new outfit or a meal out with friends.
