In August, Hannah began the “26 envelope challenge” using her Monzo Savings pots and is on track to treat her friends and family this Christmas as she has nearly hit her £500 goal
One woman will have saved £500 in just three months to spend on Christmas this year by following this one hack.
Hannah Cooney, 26, set herself the task of creating a cash pot which could be used to cover the festive season this year. In August, Hannah began the “26 envelope challenge” using her Monzo savings pots and is on track to treat her friends and family this Christmas as she has nearly hit her £500 goal.
The challenge is an incremental savings challenge where you increase the amount each time you put money away. For example, in envelope one, you would put away £1 and in envelope number 12 you would put away £12 and so on. However, this is not the only savings challenge Hannah has taken on.
Hannah has also taken on the 12 Mondays challenge, which sees her put away £10 every Monday across three months in the lead-up to Christmas. So by the time December arrives, she will have built a cash pot of £120.
Hannah told The Mirror: “I will have saved £300 by payday next week and I’m aiming to reach a final goal of £351. I am so close to completing it so I know I will fully fund this pot ready for Christmas. I am also doing the 12 Mondays challenge to reach my £500 goal, as this feels manageable to complete alongside my other challenges. I have saved £70 so far.”
Separately, the bingo hall manager and part-time financial blogger from Swindon has 12 savings pots with Monzo, alongside three savings accounts which gives her interest on her savings. Some of the pots include various savings challenges she is also currently doing, including the “Bubbles Challenge”, “Rainy Day Challenge” and “Fiver Fridays”. Others are just general cash pots, where she puts money away for bills such as her car insurance and MOT.
Hannah explained: “I always try to complete the Bubbles challenge every month, where I save £150. This challenge is by the wonderful BudgetwithIra, and it has different amounts in bubbles on a poster that you tick off every so often. I have completed this challenge many times over the last four months.
“The Rainy Day Challenge is where there are different amounts of raindrops on a poster that you tick off every now and then. This also helps me to save around £150 and I have completed this challenge many times. I also do a challenge called Fiver Friday, I do this every year and save £270.”
Hannah says she has always been a saver so managing her multiple savings pots and adding to them each month is not too much of an issue for her. She said: “When I was younger, I remember being given money for Christmas and not spending it until I was 100% sure what I wanted to buy.
“I would meticulously research whatever I wanted to buy, to see if it was a good deal. This is a financial habit I picked up from my parents and I still do now. I was also a cash stuffer before the pandemic and I loved it.”
In order to put cash away each month, Hannah uses the “sinking fund method” which is when you can sink money into your savings pots slowly. She explained: “I originally used to do this as a cash envelope stuffer, so I would pick a goal, like £500 to pay for my car insurance, and divide this by how many months I needed to save for, like 12 months.
“This would mean I need to save £41.66 every month to reach my goal. Doing it this way means I can save money all year round and not worry about these big bills.”
The 26-year-old does have to be a tad meticulous with her day-to-day spending to be able to put the cash she needs away. Although, Hannah says she tries to balance being a “hardcore saver” and “enjoying herself”.
She explained how she splits food costs with her partner 50/50, avoids ordering takeaway unless its a very special occasion and has a separate cash pot which she she only uses for petrol costs. Hannah also buys her clothes secondhand through stores and apps and shops in the sales.
She said: “I used to be quite strict and not eat out or go out, but I wasn’t mentally happy when doing this. Instead, I try and find ways to save money for when I do go out, such as using cashback sites and finding vouchers. I also meal prep for work, so I am not tempted to go to the shops during my working week.
“I also had a family emergency last year and it completely changed my perspective on life; it’s made me more aware of making sure I spend time with family and friends. Also, if I am doing a savings challenge then I will lock this money away and make sure I don’t touch it, to remove the temptation of spending it.”
“But I’m not perfect, and I do still go over budget sometimes – I try not to be too hard on myself though, and balance any overspend with a couple of extra no-spend days.”
Hannah says savings challenges are a “must” for anyone and for those considering starting one now – or in the New Year – she recommends starting small. She added: ” Even if it is just £5 a week, as this is a good place to start.”
“I find saving small to be the most effective method; I don’t notice the money leaving your account when it’s £1 here or £5 there. The 26-envelope challenge has been a great one for me – being able to save £270 without it affecting my budget has been great. It is also never too early to start saving for anything. If you use the sinking fund method where you put small amounts away each month, you will be surprised at how much you can save.”
Going forward, Hannah is planning to build on her LISA savings as she is planning to buy her first home in the next few years.
Full list of savings challenges Hannah has taken on
26 Envelope Challenge for Christmas
Across 26 weeks, you put away a small bit of money into an envelope and it increases as time goes on. So on week one, you would save £1, week two this would double to £2 so by week 12 you would put away £12 and by week 26 you would put away £26.
12 Mondays Challenge
Put away £10 every Monday across three months. This will see you build up a cash pot of £120.
£150 saving challenge
With this challenge, you are tasked with putting away £5 every day to save a total of £150. Hannah has completed two of these this year.
£110 saving challenge
This is very similar to the £150 saving challenge, you can put £5,£10,£20 into your savings pot each week – you decide how much – until you reach your goal and in this case, it’s £110. Hannah says she usually puts away the larger amounts on paydays and the smaller ones during the months when she is under budget or hasn’t spent any money.
A very simple challenge in which you put £5 away every single Friday.