The 100 envelope challenge is a money-saving activity. Begin with 100 envelopes. On each envelope, write a number from 1 to 100. Once a day randomly select an envelope. Whatever the number is on the envelope, put that amount of cash inside. When 100 days have passed, each envelope will be filled with cash and you will have saved a total of $5,050.
What You Need to Know
| > The 100 envelope challenge was originally created to give your savings plan a jump-start. > If you follow the exact plan and put the specified money in an envelope each day, at the end of 100 days you will have $5,050 in cash saved. > The 100 envelope challenge is not good for everyone and should be thought about seriously before diving in. > There are other options to jump-start your savings plan that are likely better for you. |
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Have you heard all the razz about the 100 Envelope Challenge, and now you are thinking about doing it?
If you don’t already have a solid savings plan in place, you shouldn’t do the 100 Envelope Challenge.
If you don’t know what it is, I can quickly fill you in.
The 100 Envelope Challenge is supposed to jump-start your savings, and at the end of 100 days, if you follow the challenge precisely as it is laid out, you will have a total of $5,050 cash in all your envelopes.
I’m not sure about you, but that would feel amazing to watch my money grow from $0 to $5,050 in just over 3 months!
Just hold on a few minutes before you head to the store to buy a cheap box of envelopes and start numbering them!
Keep reading to learn more about the hundred envelope challenge and why you might want to bypass it and focus on a more practical money-saving challenge
What Is the 100 Envelope Challenge?
The hundred envelope challenge, also known as the 100 Day Money Challenge, was introduced on the TikTok social media platform as a spin-off of the envelope budgeting method.
However, this challenge does not encompass your whole budget, but instead, it is a challenge to get you focused and push you to start saving money.
How does the 100 Envelope Challenge work?
This challenge follows the same concept as the envelope budgeting system.
Here is how it works:
- Label 100 envelopes with the numbers 1 to 100
- Once a day, close your eyes and pull out one envelope
- Whatever the number is on the envelope, add that amount of cash to the envelope
- Seal the envelope
- Repeat for 100 days in a row
- Add up the cash in your envelopes, and it will be $5,050 money saved
For example, when you draw your daily envelope if you pull out the one with the number 87 on it, you would put $87 in that envelope and seal it.
If the envelope had the number 15, you would put $15 cash in it and seal it.
It sounds pretty easy, doesn’t it?
Simply pull one envelope out of the stack, add money, and seal.
How hard could that be?
I can give you many reasons why you shouldn’t participate in this so-called fun challenge, and a couple of reasons why you should give it a green light.
Keep reading if you are looking for those answers.
However, this challenge does not encompass your whole budget, but instead, it is a challenge to get you focused and push you to start saving money.
What is the envelope budgeting system?
The envelope budgeting method is a popular technique promoted by financial guru Dave Ramsey that uses envelopes to hold cash for each budget category.
The purpose of using cash to pay every bill is that you cannot spend more than you make. It is designed to get over-spending your income in control, so you learn to live on the amount of money you bring home from your job.
Essentially, the bill isn’t paid if there isn’t enough money to put into the envelope. For this reason, you should focus on paying your essential living expenses first, such as rent or your mortgage, utilities such as electricity, etc.
Once the necessary bills have the required amount of money allocated, you can dive into the unnecessary or luxury budget categories such as eating out and recreation.
For example, if you have a budget category for entertainment, cash could only go into your envelope labeled entertainment if you had enough money left to fund that category.
Does the 100 Envelope Challenge work to increase your savings account balance?
Yes, it works if you follow it and stick to the plan for the entire 100 days.
Like any challenge or goal, it will work if it is followed.
For example, if I want to lose 25 pounds, I can’t eat the same way I have been eating for the duration of the diet and expect to lose weight. I must make changes if I truly want to meet and make the goal work.
The 100 Envelope Challenge works the same way.
For example, if you have a budget category for entertainment, cash could only go into your envelope labeled entertainment if you had enough money left to fund that category.
Pro Money Tip
If you decide to do this challenge and you don’t stick to the plan for the full 100 days, the money you save is still a quick win as long as you leave it in your savings account and don’t withdraw it.
How much money do you save in the 100-day money-saving challenge?
I created a chart to see how the money adds up to 5,050 dollars when you complete the 100 Envelope Challenge.
100 Envelope Challenge – Do the Math
100 Envelope Challenge - Do the Math | |||||||
Envelope 1 | $1 | Envelope 26 | $26 | Envelope 51 | $51 | Envelope 76 | $76 |
Envelope 2 | $2 | Envelope 27 | $27 | Envelope 52 | $52 | Envelope 77 | $77 |
Envelope 3 | $3 | Envelope 28 | $28 | Envelope 53 | $53 | Envelope 78 | $78 |
Envelope 4 | $4 | Envelope 29 | $29 | Envelope 54 | $54 | Envelope 79 | $79 |
Envelope 5 | $5 | Envelope 30 | $30 | Envelope 55 | $55 | Envelope 80 | $80 |
Envelope 6 | $6 | Envelope 31 | $31 | Envelope 56 | $56 | Envelope 81 | $81 |
Envelope 7 | $7 | Envelope 32 | $32 | Envelope 57 | $57 | Envelope 82 | $82 |
Envelope 8 | $8 | Envelope 33 | $33 | Envelope 58 | $58 | Envelope 83 | $83 |
Envelope 9 | $9 | Envelope 34 | $34 | Envelope 59 | |||