Looking for an easy way to budget? This method starts with a single penny
Bank balances tend to be thin in the fallout of Christmas and New Year.
January is a month of scrimping for many and savings are, understandably, an afterthought. After an expensive festive season, saving money in January is just about as welcome as a diet on Christmas day.
But there’s a way to painlessly – even effortlessly – begin saving money on New Year’s Day. Fans of Martin Lewis may have already heard of the 1p savings challenge, which the financial expert shared on X that he does “every year”.
The 1p challenge explained
It’s a deceptively simple way to save. All you have to do is pocket 1p on the first day, 2p on the second, and so on. This slow and steady method of saving is approachable for beginners or anyone who wishes to kickstart their savings when there’s little to spare.
By the end of 2025, you will have scraped together £667.95, a sizeable sum to put toward your financial goals, like an emergency fund, holiday or a very nice Christmas.
The snowball effect means you’ll go from saving just a penny on January 1 – or whichever day you start – to £3.65 at the very most on the last day.
There’s also the option of doing it backwards by paying in more at the beginning, with the sum decreasing to 1p on the last day.
How to do the 1p savings challenge
The daily deposits can be done via digital banking or with an old fashioned jar of cash. To save you from falling behind, Martin Lewis offers a printable sheet to tick off the days and amounts to save in ascending or descending order.
Good news for Monzo customers – it is the first bank offering to automate the entire process. Monzo announced the new feature this week which will take out all the legwork of transferring the daily deposits. Participants can pause, stop, or withdraw the deposits at any time.
The firm is offering an extra incentive in the form of £10,000. Those who start the challenge by January 31, 2025 and complete it are eligible for the cash draw.
