Personal finance experts weigh in on this famous social media budgeting method.
Fromloud budgetingtogirl math, TikTok is an endless source of trends and information about personal finance.
So what exactly is the 100 envelope challenge and how does it work?
What is the 100 envelope challenge?
So, if you pick envelope #32, you should put $32 dollars in the envelope.
At the end of 100 days, you should have a total of $5,050 in cash set aside.
The challenge can also progress linearly instead of randomly.
you’ve got the option to also adjust your totals to fit with your personal savings goals.
Ultimately, youre still saving and saving more than if you didnt participate in the challenge at all.
What are the benefits?
She noted that this daily challenge also forces you to practice money mindfulness.
Indeed, doing something positive for 100 days is a good way to develop healthier habits.
You have a daily goal that requires thoughtful planning to execute, Howard said.
What are the downsides?
podcast and author ofFinancially Lit!
To pursue the 100 envelope challenge, youll also need to be realistic about your financial situation.
She recalled trying a similar challenge with a plastic wallet that encourages $40 contributions.
I thought it would be an easy way to save $1,000 quickly, Howard said.
You could also miss out on extra earnings by saving your money in cash at home, she added.
A high-yield savings account will help your money grow over time, even after the 100-day challenge ends.
Were currently in a competitive rate environment which is great for saving.
Whats the best way to make it work?
Like any budgeting method, it works if you stick to it, Alev said.
For best results, make a plan for the money youll save prior to beginning.
Accountability buddies can provide great motivation in any savings endeavor, including the 100 envelope challenge.
I think it can work, but it does require discipline, Torres said.
So Id recommend inviting some friends to join in on the challenge to keep each other accountable.
I also like using savings tools that save for you, Woroch said.
That spare change can add up fast!
She added that you’re free to earn extra cash by pet sitting throughRoveror tutoring throughVarsity Tutorsas well.
That way youre taking advantage of earning interest and your money is protected.
For many, it takes more effort and thoughtfulness to dig into their online savings.
And dont be discouraged if you dont find the success you saw on TikTok.
What works for one person doesnt work for everyone else, Howard said.
