NEW YORK: After about eight weeks, it’s a safe bet that many people’s “New Year, New Me” challenges have fallen flat. Too often we try to make changes all at once through some short-term physical or lifestyle tests (hello, Dry January) that don’t stick.
It’s the same in the financial world, where people attempt hacks in January and February to recover from financial fumbles the prior year, like overspending during the holidays.
I’ve tried many money challenges over the years, too. While I’d love to chalk it up to professional curiosity, sometimes I was buying into the notion that I could squeeze a little more out of my then-paltry income with some catchy strategy.
The truth: A lot of these savings challenges work in the short term but ultimately aren’t sustainable and could result in people feeling demoralised as soon as they quit.
It’s especially important to proceed with caution as they become more popular on TikTok and other social media platforms. Your financial behavior should be built on a foundation that is simple, easily automated and works for the long term.
BUDGETING CHALLENGES ON TIKTOK
Several years ago, a popular method was the US$5 challenge. It required you to pay for things with actual cash, and then whenever you received US$5, you had to put it into savings. After a few months, you could delight in having saved up a couple hundred dollars.
There’s also a 52-week challenge, which continues to be popular at the start of the year and is easier to do digitally. There are variations on this one, but the simplest is to start with US$1 in savings and add a dollar each week for the entire year. You’ll end up with an extra US$1,387 by the end of the year with a minimal squeeze because the increase happens so incrementally.