I love savings challenges, and few are as popular as the penny challenge.

It sounds so easy. Just saving your pennies every day can add up to hundreds of dollars a year in savings.

Use a new twist on the penny challenge for one of the best savings challenges and grow a small amount to thousands.

I tried the original penny challenge but quickly found a couple of problems that were derailing my progress. As a result, I needed to put a new twist on this old challenge to stay on track and meet my goal.

I came up with a way to make saving even easier and turn it into thousands of dollars.

What is the Penny Challenge?

The basic idea for the penny challenge is easy. You save one penny on your first day, two pennies on the second day, three on the third, and so on for 365 days. That means you’re saving the same amount you did the day before while adding another penny.

You can meet your savings goals from the change you find around the house or the change you receive from purchases. By the time you are done, you are saving 365 pennies on the final day.

The idea is to make saving gradual. By starting small, saving just pennies a day, you make saving more accessible and don’t have to sacrifice. I’ve built a chart of how much you save per week to follow along on your penny challenge and put together my savings challenge after the graphic.

best penny challenge idea
What is the Penny Challenge

Two Problems with the Penny Challenge

The first problem with the penny challenge isn’t apparent at first. Saving less than a dollar over the first weeks is an easy start. You might not be able to find $0.77 lying around the house, but you can usually put it together with the change from purchases.

Try making it to the final weeks of the challenge, though, and you’re trying to find almost $30 a week…that’s a lot of pennies. You’re not talking about saving your change anymore, which throws many people off.

what is the penny challenge
How to the Penny a Day Challenge

The second problem with the penny challenge is that even making it through the entire year, you’re only saving $667 total. That’s good for a nice shopping trip and maybe paying off some bills. Still, it’s nothing you’re going to get that excited about. You might not even get motivated enough to start the challenge.

I love the idea of savings challenges. So I thought I would take a shot at improving the penny challenge, getting to the most significant problems to help you save more money.

Using a Savings App with the Penny a Day Challenge

One of the most difficult things about the Penny a Day Challenge is remembering to save the pennies each day and tracking your progress.

It’s easy enough saving a few days of pennies, but it gets more challenging to track how many you need to save as you progress. Using savings apps can add a new element to the Penny Challenge and make saving easier.

In fact, one savings app I use makes the Penny Challenge automatic and will help you reach your retirement goals faster.

The Acorns app connects with your credit and debit cards to help you save money without even doing anything. After signing up, you link your cards and then spend normally.

For every purchase you make with a linked card, the Acorns app rounds the amount up to the nearest dollar and deposits the difference into an investment account. For example, suppose your daily double-mocha-latte-frappe comes to $3.73. The app will round it up to $4 on your card and put the remaining $0.27 into your investment account.

how does acorns app work
How Does the Acorns App Work?

This makes it easier to follow the Penny Challenge because you’re not scrounging for change in the couch daily. Instead, you spend normally, and the app does the rest.

Get started saving today, open a free Acorns account now

What I like about the Acorns app is that it combines this instant saving with a Robo-advisor, which makes investing easy. Just answer a few questions when you open your account. Then the app will suggest one of five investment portfolios built from professionally-managed funds in stocks, bonds, and real estate. 

All your money saved goes directly into your investments, and you pay no investment fees. The only fee is a $1 monthly charge, common among Robo-advisor platforms. 

Now there will come the point in the Penny Challenge where you’re looking for more pennies to save than what you get from rounding up your purchases, but the app will make it much easier to start. 

Improving the Penny Challenge

To make saving more manageable, especially those big weeks towards the end of the year, try finding places in your budget to cut. Instead of just making the challenge about the spare change you find around the house or the leftover from purchases, try cutting expenses and budgeting to meet your savings goal.

When I did the penny challenge, I cut back on drinks when I went out with friends. You’d be amazed at how much you can save by cutting back to one drink instead of two or three just one time a week. I ended up saving almost double my goal over the last few weeks.

Even if you only manage to save the $667 from the penny challenge idea, you can still turn it into thousands of dollars. Of course, not too many people get worked up over $700, but I don’t know anyone that would turn down $2,500!

There’s no trick here. Just invest the money along with the rest of your retirement money. At a return of 7% annually, $667 turns into $2,584 over 20 years.

Yeah, I know it doesn’t seem like a new twist on the penny challenge. You’d be surprised, though, how many people blow their money saved each year. If you spend it on a splurge at the end of the year. Then why even go to the bother of saving it in the first place?

Does the Penny Challenge Work?

The Penny a Day Challenge does work, but that’s if you can find the money to save every day. It’s easy at first, but by the end of the year, you’re saving upwards of $25 a week. 

Being successful with the penny challenge means finding ways to make your saving automatic, like with savings apps and methods to trick your spending into helping you save. 

The best part about the penny challenge is the savings habits you’ll build in a few short weeks. So even if you don’t make it the entire year, you’ll have built some savings habits in a few weeks that will help you control spending and put you on the right financial path.

The penny and other savings challenges aren’t just ways to save up a couple hundred dollars. Instead, use them to change your spending habits, gradually work into saving more regularly and make saving easier. It’s not about saving more money for a few months or a year but about learning to get the most out of your money.

Alternative Money Saving Challenges

There are many money-saving techniques and challenges, but the toughest part is finding the one that works best for you while reaching your saving goals! Below I have outlined 3 of my favorite money-saving challenges that may be better suited to you. 

  1. The 52-Week Saving Challenge

This is one of the most popular savings challenges because it is relatively easy and will save you $1,378 by the end of the year! This challenge is extraordinarily straightforward, and here’s how it works:

  • Deposit $1 into your savings in week 1 
  • Deposit $2 into your savings in week 2
  • Deposit $3 into your savings in week 3

Do this until you’ve completed 52 weeks and saved up $1378! By the end, you will have enough to buy something nice or some extra cash for gifts around Christmas! 

  1. 365-Day Nickel-Saving Challenge

Hoping to save a little bit more than just $1000 by the end of the year? If this is the case, try the 365-day Nickel-Saving Challenge. This challenge will allow for consistency if you don’t particularly like waiting a week or two to deposit. In this challenge, you will deposit money every single day for an entire year while putting in a little bit more each day. 

You will start off on day 1 by depositing a nickel, then on day 2, you deposit 2 nickels, and so on. Here’s an example:

  • Deposit $0.05 into your savings on day 1 
  • Deposit $0.10 into your savings on day 2
  • Deposit $0.15 into your savings on day 3
  • Deposit $18.40 into your savings on day 365

By the end of the 365 days, you will have saved up $3,300! Seems easy, right! If you’re feeling extra motivated, double it each day!

  1. $1 Bill Challenge

This challenge is relatively easy if you don’t want to think about having to deposit specific amounts on a fixed schedule. The way this works is straightforward – every time you receive a $1 bill as change, tuck it away in an envelope. If the envelope gets too big, move it over to a jar. Then, at the end of the year, count it up and spend that money on something fun! If you want to make this harder for yourself, you can do this with a $5 or a $10 bill! 

Another way to make some extra cash is to ensure you’re receiving the highest cashback rates on all purchases. If you haven’t done so, consider signing up for TopCashBack to access thousands of cashback deals and coupon codes. Perfect for increasing your savings on all of your online shopping!


Check out TopCashBack and Start Saving Today

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About the Author

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Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.