52 Week Money Saving Challenge – Really a Good Idea?

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52 Week Money Saving Challenge

52 week money saving challengeI am sure by now that most of you have seen all of the frugal bloggers posting their 52 week money saving challenge posts. After all, it’s the first of the year. Most of us have set the goals we will attempt to achieve in 2014 and are going great guns to get a good head start. If you have followed my page for any amount of time at all, you know I don’t always do what other people do. In fact, I live by the mantra that Dave Ramsey sets forth in his books: If being normal means being in debt, then I don’t mind being weird.

Here is my concern. I think that people look at this 52 week challenge grid, thinking it’s a good idea and making it part of their New Year’s goals. Here’s the problem: they aren’t curing a problem in their life, they are simply adding a positive behavior. Look, I will be the first guy in line to give you a high five if you have decided this is the year you are going to get out of debt. I will do back flips with you when you decide to get your $1,000 baby emergency fund in place with lightning speed. However, this 52 week challenge idea needs to be looked at a little further. The problem is that people honestly don’t stop to think about how money works. They don’t understand that when you are paying a 20% interest rate on $20,000 in credit card debt that it doesn’t make sense to save money each week of the year in an account that pays you less than 1% interest.

What Are Your Interest Rates on Your Debt?

Do the math with me: If you have $10,000 in debt at an average rate of 20%, you are spending $2,000 in interest just to carry that debt. On the contrary, saving a little over $1,000 by spreading it out over 52 weeks with a very nominal interest rate may get $1,000 in the bank in a year, but it will cost you $2,000 to do it. People are immune to the interest phenomenon because they can’t touch it and feel it. They pay the least amount possible on the debt and see the savings continuing to grow without ever realizing they are getting further in the hole. Wouldn’t it make more sense to put your 52 week challenge into debt reduction? Why not take the same model and use it to pay off the balance on one of those pesky credit cards that never seems to go away? Shoot, you may even be able to pay off 2 of them! That makes a lot more sense than putting your money into savings at a sub 1% interest rate.

52 Week Money Saving Challenge Alternative

I realize that this doesn’t apply to everyone. I realize that there are a lot of people out there that do this challenge for fun because they have no debt at all. However, if you have the first ounce of debt, you need to reconsider your position. When you look at your finances as a whole, you will thank me. You will never recover from your debt position if you are constantly robbing debt reduction payments to create a false sense of security in savings. Follow the model that we teach: save $1,000 as fast as you can. Get an extra job, have a yard sale, do whatever you need to do to get $1000 in the bank in 30-45 days. Then start paying on your lowest balance with every extra cent you can find. Leave your emergency fund for emergencies and assault your debt. Follow that model for 52 weeks and you will thank me next December when you have a cash only Christmas.


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  1. What if you apply the 52 weekly savings challenge to your house note every week?

  2. The 52 week challenge is something I will use because I am currently in a chapter 13 bankruptcy and need to save up for emergencies. I can’t pay anything down on my mortgage until the end of the bankruptcy (4 more years). What I plan on doing is saving this for the next 4 years and use it as a down payment on a new car as my 2007 dodge nitro will be done by that time. I figure if I can make it through this bankruptcy and save a little in the process I will have paid off everything except my mortgage and be good to go. I don’t think it’s a bad thing for everyone to do. Maybe use it as your Christmas money or your child’s college fund. My motto is something is better than nothing.

  3. This is the only way I know for sure I will save any money. I also know I will not make it to the end of the year but I will have saved some in case of emergency. I did this last year and made it through 6 months. This year I am transferring it straight to my savings account. If I run short one month I will know I have a cushion to fall back on.

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