How much money do you put into your savings account each month? If the answer is zero, you are not alone. According to the Report on the savings and consumption of Spaniards 2023 Prepared by Idealo, eight out of ten households in Spain fail to save or save less than 500 euros per month, with 12% not only not saving anything, but also consuming their savings to be able to pay the bills.
Inflation, loss of purchasing power and low salaries explain a large part of the problems that people have in saving, but there are also other secondary reasons that have to do with the way our brain works. Even people who have more money sometimes fail to save. This is where the 52 week challenge can help.
What is the 52 week challenge?
The 52-week challenge is a very simple savings program, but it requires consistency. It is a method that has become popular as a way to save more than 1,000 euros per year. Although it may seem like a very basic strategy, behind this challenge there are lessons we can learn about our discipline, planning, and the relationship we have with money.
The 52-week challenge is simple: each week of the year, you save an amount of money equivalent to that week’s number. In the first week of the year, you save one euro. In the second, two euros, in the third, three, and so on until you reach week 52, when you save 52 euros. At the end of the year, you will have accumulated a total of 1,378 euros.
It is not clear who invented the challenge, but it has become popular on social networks and among influencers of personal finances, which present it as a structured way of saving for beginners. It does not require advanced knowledge of finances or tools of any kind. It can be done using a simple piggy bank, if done in cash, or even using banking apps to transfer the money to another account. You just have to be constant.
The calculation of the total is based on an arithmetic progression. To add the consecutive quantities from 1 to 52, use this formula:
S = n/2 x (p + u)
- n: number of weeks (52)
- p: first term of the sum (1)
- u: last term of the sum (52)
The result is 26 x 53 = 1.378. This is the amount in euros that we will have saved at the end of the year.
Like all progressions, it is extremely easy at first. If we start with the new year, we will not even notice the savings for the month of January (a total of ten euros). However, in February we will have to save 26 euros in total, 42 in March, and so on until we reach the last four weeks of the challenge, in which in total we will have to save 202 euros.
For this reason, the 52 week challenge is more difficult than it seems. Towards the end of the year, when weekly amounts exceed 40 or 50 euros, many people find it difficult to maintain their commitment. But this also has a positive consequence: it forces us to plan our expenses.
If we do not adjust our budget or anticipate extra expenses in advance (which accumulate precisely in December with Christmas) it is easy for us to have to abandon the challenge. On the contrary, to finish it we will have to think about the future, and this is precisely what changes our psychological attitude towards saving.
Why does it cost us so much to save?
Beyond income and the high cost of housing or supplies, saving money is a difficult task because it requires time, discipline and a change in our consumer mentality. We live constantly bombarded by information and stimuli that drive us to consume more and desire instant gratification. Low prices on Aliexpress or Temu, Black Friday offers, constant ads on Instagram or suggestions on Amazon are designed to match our tastes and desires.
Added to this is the possibility of paying on credit or deferring payments, which increases impulse purchases, even if we cannot pay for them at that moment, without thinking about the subsequent consequences. Saving, on the other hand, requires stopping, planning and prioritizing, a process that can be tedious and less desirable.
Psychology also influences. A study carried out in Poland found that objective financial status (having more money) made saving more likely, but people were also more likely to save when they had a good, rather than negative, subjective perception of their financial ability, regardless of how much money they earned.
Personality and goals are another important factor. In a study in the UK It was found that even people who could save very little money ($100 in a month) achieved it more easily if the goals they set agreed with their personality traits. For example, a person with greater openness to experience will be more motivated to save for a trip.
Saving defies human nature, as spending is more fun and gives us a temporary illusion of wealth, although uncontrolled spending can leave us in a worse financial situation. Overcoming this urge requires focusing our attention on future priorities rather than immediate desires. An example is the control of microexpenses, such as daily coffee or subscriptions to apps and services streaming.
It’s also key to break down your savings goal into small, achievable steps, rather than trying to tackle a big number all at once. That is why the 52-week challenge influences our mentality towards money, because it forces us to practice saving constantly.
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