Homebuyers

Saving for a Home? 4 Viral Challenges That Could Help You Become a Homeowner

Buying a home is exciting, but it often isn’t cheap. Between a down payment, closing costs, inspection fees, immediate repairs, moving, and everything in between, it’s good to have some extra money saved up.  

Here’s the good news: Viral savings challenges, such as those on TikTok, can make it easier and more enjoyable to put money away.

So, if you plan to buy a home, keep these four challenges on your radar.

1. The 100 Envelope Challenge can help you save money for 100 days

The 100 Envelope Challenge is where you label 100 envelopes from 1 to 100. Then, you pull out one random envelope each day. Whatever number is on the envelope is the amount of cash you put in it.

For example, if you pull envelope 53, put $53 in it. Or you pull them out in order, easing into the savings.

You do this for 100 days until you’ve saved $5,050 in the envelopes that can go into a home fund.

It’s alright if you can’t afford to put in as much. You can halve the amounts or extend the challenge if you need more time to save.

If you don’t want to use cash, use an online random generator instead. It can electronically transfer the chosen amount into your home savings account each day for 100 days.

“I like the idea behind the 100 envelope challenge,” said Scott Sturgeon, founder and wealth advisor at Oread Wealth Partners. “But…it seems like a ton of work. There could be better options out there to save up a large sum.”

While the 100 Envelope Challenge does take some persistence and commitment, it might be worth it if you could benefit from the visual motivation and want to build a savings habit.

2. The cancellation challenge can help you pocket savings

Monthly subscriptions can interfere with your ability to save for a home, especially if you have a lot of them. That’s where the cancellation challenge comes in.

Go through your recent credit card and bank statements to find subscriptions or recurring charges for things like the gym, video streaming, food delivery, software, and apps. Unless you use the subscription or consider it a necessity, cancel it. Then, stash the cash you saved in your home fund.

“I like the concept of this one,” said Sturgeon. “But unless you have a crazy expensive gym membership or something that is several hundred dollars per month, it's probably going to take a while to get you to your house savings goal.”

3. No-Spend Month Challenge could help you cut back

It’s all too easy to spend your hard-earned money on products and services you don’t really need. With the No-Spend Month Challenge, you get rid of all non-essential spending, usually for an entire month.

Of course, you can spend on essentials, like your rent or mortgage, utilities, groceries, toiletries, car loan, medical expenses, and other important bills and debt payments.

Just make sure you stay away from non-essentials, like takeout or restaurant meals, movies, concerts, salon service, new clothes, and more.

You may want to limit your social media use or remove retailer apps on your phone to avoid the temptation. Also, get creative and find free activities to help you occupy your time, such as outdoor hikes, trips to the library, and picnics in the park.

“Will the savings from one month really allow you to buy a home? Probably not,” said Sturgeon. “Could you maybe use it as an experiment to see what expenses are really ‘essential’ and in turn start spending less in the long run? Possibly so, which is why it might actually be worth a try.”

4. Use the 52-Week Challenge to increase your savings

With the 52-Week Challenge, you put away money every week for a year, increasing the amount by $1 every week. You match each week’s savings amount with the number of the week in your challenge.

For example, you’ll save $1 the first week, $2 the second week, $3 the third week and continue this until you save $52 in week 52.

If you stick to this challenge for an entire year, you’ll have $1,378 to put toward your home.

“I like this one,” said Sturgeon. “You could probably simplify it quite a bit to just make a recurring transfer into a savings account each week in the same amount and save yourself quite a bit of time.”

Should you try a viral savings challenge?

You can consider trying these viral savings challenges, but don’t be afraid to simplify your home savings strategy.

It’s alright if these options seem like they require too much work or if you try them out and simply determine they aren’t a good fit. Find something that works for you and your financial situation.

“I suggest having a designated account whose sole purpose is to receive recurring transfers out of your checking account, often each time you get paid,” said Sturgeon.

This strategy will force you to treat that account as your down payment fund so that you don’t put the cash toward a new wardrobe or a vacation to Maui.

“Depending on your timing, the account itself could be something like a high yield savings account that gets you a decent yield or an investment account,” said Sturgeon.