Retirement Income

Over60

How you can save thousands with the $5 challenge

How you can save thousands with the $5 challenge

Looking for a new way to save? A money challenge has taken over social media, allowing Aussies to save thousands with a simple trick.

The $5 challenge, as it is called, involves putting away any $5 note that comes into your possession into a stash you do not touch for a year. The important thing is to avoid spending the collected bills until the challenge is completed.

“Are you game to try? Trust me it works!” the challenge organiser wrote on a Facebook group.

Those who tried the budgeting hack in the previous years have shared their success stories.

“$1200 was saved this way in the last 12 months for me!” one wrote, saying she used the cash for a four-night getaway with her husband.

“It is brilliant and part of why I have gone back to using cash! When using credit cards I saved nothing, over the last 12 months I have already banked over $1000 between $5 and loose change!” another commented.

“Last year I had an extra $2700 for Christmas. I love doing this,” someone else shared.

One saved up enough to buy a Thermomix kitchen appliance, which retails at $2,089. 

“Today I met a customer who inspired me in more ways than one … For the past year Tracey has been doing the $5 challenge where she squirrels away any $5 note that comes into her (or her husband's) possession,” a merchant shared on her Facebook page.

“Tracey was aiming for $2089 to buy her Thermomix but with the $500 off right now – she had enough to order!!”

For those who often go cashless, there are also similar saving tricks with cards. One advised transferring any change to a savings account at the end of the day and round the balance “to the nearest 0”.

Another popular challenge is the 52-week challenge, where people are encouraged to set aside a certain amount of money every week for a year – $1 for the first week, $2 for the second week and so on.

One woman acknowledged that depositing a spare $40-50 in a week may not be as easy considering different financial situations. “Sometimes it is hard for some households, but even if u can manage to put away $2 a week, it all adds up,” she wrote.

An alternative version of this challenge is the 365 challenge, in which the amount of money to save corresponds to the day - $1 for the first day, $7 for the one-week milestone, and more.