How much impact can saving small change have? Quite a bit, as it turns out, if you try the penny challenge.
This simple savings plan helps you tuck away $667.95 over the span of a year — or $671.61 in a leap year. To take part, follow these easy steps:
- Begin by saving one penny on day one.
- Each subsequent day, add one more cent than you saved the previous day. For instance, on day two you’d contribute $0.02. On day three, you’d put in $0.03, and so forth.
- Keep up this pattern every day for a full year.
Important note: You’re not merely saving one penny per day. If you did, you’d finish the year with only $3.65 — barely anything.
The trick to increasing your savings with this challenge is increasing the amount you deposit each day, not just the cumulative total. So on day two your overall balance will be $0.03 because you add $0.02 to the $0.01 from day one. On day three, after making that day’s deposit, your balance will be $0.06.
Below is a table that illustrates how much you’d put in each day — along with the running balance — for the first week of the penny challenge.
Penny Challenge at a Glance
| Day | Daily Savings | Balance | ||
|---|---|---|---|---|
| 1 | $0.01 | $0.01 | ||
| 2 | $0.02 | $0.03 | ||
| 3 | $0.03 | $0.06 | ||
| 4 | $0.04 | $0.10 | ||
| 5 | $0.05 | $0.15 | ||
| 6 | $0.06 | $0.21 | ||
| 7 | $0.07 | $0.28 |
You start with tiny amounts, but your money compounds over 12 months. Since the daily contributions are minimal, you don’t need a lot of extra cash to grow your savings.
How Much You Can Save With the Penny Challenge
If you follow this savings plan for a full year, your deposit on the final day will be $3.65 and your year-end balance will total $667.95. (Yes, the math checks out.)
That $667.95 could boost your emergency fund or be used to reduce debt. Alternatively, you could earmark it for a trip or a shopping treat.
Decide in advance how you want to use the money. Having a meaningful goal will keep you motivated to stick with the challenge throughout the year.
An Easier Way: Do the Penny Challenge by Month
Finding enough loose change to add exact pennies each day is simple at first, but it can become harder as the weeks pass — especially if you rarely use cash.
One workaround is to collect your daily amounts and deposit them once monthly instead of every single day. By grouping the daily contributions and making a single monthly deposit, you won’t need exact change each day.
Savings Growth Month by Month
| Month | Amount | |||
|---|---|---|---|---|
| January | $4.96 | |||
| February | $12.74 | |||
| March | $23.25 | |||
| April | $31.65 | |||
| May | $42.16 | |||
| June | $49.95 | |||
| July | $61.07 | |||
| August | $70.68 | |||
| September | $77.55 | |||
| October | $89.59 | |||
| November | $95.85 | |||
| December | $108.50 |
Make your monthly deposit a priority by paying yourself before other expenses. Or set up automatic transfers from your checking to your savings so you won’t have to remember to save.
Leave the funds untouched and by year’s end you’ll have over $600 to use however you like.
Edited by Jamie Carter. Deputy editor Tiffany Wendeln Connors updated this piece.
