Have you heard of the 100 envelope challenge?
You probably have. But if not, it’s that viral money-saving hack that blew up on TikTok and other social media platforms. Many users claim it helped them save a lot of cash pretty quickly.
While it’s true that you can save over $5,000 in less than four months if you finish the challenge, some money-saving challenges aren’t all they’re cracked up to be. This particular money-saving challenge might not be for you.
Find out why below.
What is the 100 Envelope Challenge?
The 100 envelope challenge is a money-saving challenge where you save over $5,000 in one hundred days. Label 100 envelopes with the numbers 1 to 100. Each day, pull 1 random envelope. Put the amount of money written on the envelope in it and seal it. When all envelopes are full, you’ll have $5,050.
Why do the 100 envelope challenge?
Do the 100 envelope challenge because it can be fun and motivate you to build a regular saving habit. If you complete the challenge, you’ll have a large sum of money saved in a relatively short period of time. You can use that money to start an emergency fund, pay down debt, or to take a vacation.
Does the 100 Envelope Challenge Work?
The 100 envelope challenge does work. You will save $5,050 if you’re able to complete the challenge. The hundred envelope challenge is not easy, though. It requires that you save a random amount of money between $1 and $100 every day. Most people will find that hard, but there are easier variations.
How Does The 100 Envelope Challenge Work?
The 100 envelope challenge works by having you label 100 envelopes 1 through 100. Each day, you pick 1 envelope randomly, then put in the amount of cash equal to the number on the envelope. When all 100 envelopes are full, you will have $5,050. It’s an effective way to save a lot of money quickly.
How Much Money Do You Save With the 100 Envelope Challenge?
You’ll save $5,050 in 100 days with the 100 envelope challenge. You put a random amount of money between $1 and $100 in an envelope every day for 100 days. To start, label 100 envelopes 1 to 100. Each day, pull an envelope randomly and put in the amount of money equal to the number on the envelope.
100 Envelope Challenge Math
Some random facts and numbers pertaining to the hundred envelope challenge:
- When you label 100 envelopes 1-100 and fill them with the dollar amount equal to the number written on the envelope, you end up with $5,050 in your cash envelopes.
- If you complete envelopes 1-10, you will have saved $55.
- If you complete envelopes 1-25, you will have saved $325.
- If you complete envelopes 1-50, you will have saved $1,275.
- If you complete envelopes 1-75, you will have saved $2,850.
- When you pull one envelope randomly every day, the most you would have to save in one week is $679.
- When you pull one envelope randomly every day, the least amount you would have to save in a week is $28.
Perhaps the math involved with the 100 envelope challenge will help you decide to make it easier on yourself or more challenging, depending on how much you want to save and how much time you want to devote to it.
Flaws with the 100 Envelope Money Challenge
As you can see, when you have to come up with anywhere between $1 and $100 every single day, some days will be harder than others. In fact, you might have multiple days where you struggle to come up with the money to keep going with the challenge. That might not fit your budget.
If your bank balance isn’t currently where you want it to be and you’re having trouble saving money now, what happens when you pull a high-numbered envelope?
Over the next 100 days, you might have to come up with $50 or more to put in your envelopes several days in a row. If that happens, you might feel like there’s no end to the challenge in sight and wind up quitting.
Completing the challenge in 100 days might be unreasonable for a lot of people. If you have enough money to complete the challenge in 100 days, you might find a better use for the money. For example, you could get a month ahead on your bills, stash it in an IRA or separate savings account, pay off credit cards, put it in your emergency fund, or put it toward a down payment on a house instead of stuffing an envelope with cash.
Savings tricks and clever hacks might be helpful to get you started on building good money habits or getting rid of bad ones. But at the end of the day, the money you save doing this 100 day challenge is going to have to come out of your income. It’s not extra money that appears out of nowhere simply because you use this method.
If you can manage to free up thousands of dollars without neglecting anything, using credit cards, or falling behind on your bills, then the one hundred envelope challenge might get you saving money regularly, budgeting money more effectively, and finding ways to put extra cash toward your financial goals. But you don’t need a difficult savings method to establish good money management habits, lower your expenses, or meet your savings goals.
100 Envelope Challenge Variations
One challenge variation you might find easier is to to pull two envelopes per week instead of pulling one envelope per day. You’ll still have your $5,050 in cash at the end, but it will take you almost a year.
Other variations include pulling an envelope or two every payday, numbering the envelopes 1 through 50 twice, or simply labeling less than 100 envelopes and doing say a 50 envelope challenge.
With these variations, you could be doing the challenge a lot longer, doing the challenge for less than 100 days, or saving less money. But these options might be a lot more practical than trying to complete the 100-day money challenge.
Remember, the point is to put aside some money and get into the habit of saving regularly. The 100 envelope savings challenge isn’t supposed to make us feel bad, cause a lot of stress, or mess up our financial lives. It’s not worth trying some aggressive money-saving hack or new budgeting technique if it makes you miserable or worse off than when you started.
Should I do the 100 envelope money challenge?
You should do the 100 envelope challenge if you want to start saving money and it won’t cause you any stress or burden. Putting money away for a rainy day or a financial goal is good. Building the habit of saving money, is also good. The 100 envelope savings challenge can help, but it’s not easy.
It’s not the budgeting hack or saving trick it’s often made out to be by video creators on TikTok. Saving $5,050 in 100 days isn’t a miracle money hack. It’s going to be very hard for a lot of people to bank that kind of money so quickly.
Are there any other financial challenges I should try instead?
Money-saving challenges do make saving fun. And when you’re finding some fun in it, you’re more likely to stick with it. But you don’t have to do a 100-day envelope challenge.
There are plenty of money challenges you can do that won’t be as difficult as the hundred envelope challenge. You can do an easier 52-week challenge like the 365 day nickel challenge, a monthly savings challenge, or a 30-day challenge if a 100-day money saving challenge feels too long.
Here are some easy and fun money challenges you can start today: 12 Fun Money Savings Challenges.
That list includes the 100 envelope challenge, so really that gives you 11 you can pick from. If you’re looking for a fun challenge, there’s one saving challenge idea on the list you can start right now with one penny. Or you can do something like a spare change challenge or a no-spend challenge.
Whatever you decide to do, set a saving goal like paying off your annoying credit card debt or padding your vacation fund. Then choose a saving method. You don’t need clever money-saving hacks involving a bunch of envelopes. It just has to be something you can stick to over time.
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