Cost of living: Retired couple reveal 'struggle' of crisis
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The 1p challenge helps participants put aside money every day of the year, starting with just 1p. The idea is that each day a person increases their savings by 1p, starting at 1p, then 2p, and so on.
Over the course of a year, a saver would amass £667.95 via this technique.
People usually start the challenge on January 1, with the task becoming more difficult as they approach the end of the year.
On the final day of the challenge, in a non-leap year, participants have to save £3.65.
Savers often draw up a challenge chart to mark their 1p savings progress, helping them to make saving money even easier to manage.
People usually take up the challenge at the start of the year but a person can begin at any time.
Those who want to visually see their savings grow keep the cash in a jar or money pot, while others simply keep it in a savings account.
Other savers who rarely handle cash may prefer to simply transfer the funds to a bank account each day, week or month.
Some may find the 1p challenge a bit difficult to manage, with the commitment to save every day.
Expensive times of the year, such as the build up to Christmas, can also make it difficult to keep adding to a person’s daily savings.
Some may opt for a reverse 1p challenge, starting with the challenge of saving £3.65 and reducing their daily savings by 1p each day.
This variation is more appealing to people who find it difficult to save around the festive period.
Savers are required to save the most money in January but getting the hardest part out of the way can be helpful.
Another way to reduce the pressure of the challenge is to set aside the money each week rather than each day.
The savings are the same as with the 1p challenge, but it’s not as intense as with the daily goal.
People who are paid weekly or who may forget to save every day may find this option preferable.
There is also a version for children, to get them thinking about reducing their costs even at a young age.
Youngsters can be tasked with taking on the 1p challenge themselves, and this is a great way to talk to them about the importance of finances.
It may be helpful to set up a jar or piggy bank so they can see their savings grow.
For the more ambitious, a person could increase the amount to 10p each day, with the challenge of saving £36.50 on their last day.
To achieve even more savings, a person can commit to a pattern of reducing their costs that will save them almost £1,500 a year.
The scheme works by each week saving £1 on Monday, £2 on Tuesday and so on up to £7 on Sunday.
The amount then reverts to £1 on the following Monday.
This will mean savings of £28 a week, or £1,456 over the course of a year.
People can achieve this by simple choices such as swapping takeaway coffee for one made at home.
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