The 100 Envelope Challenge: Save $5,000 in 100 Days

No matter what your income is, saving money can be challenging. For some people, staying afloat to pay monthly bills like rent, groceries and utilities requires effort. Saving extra money on top of regular expenses could seem like an impossible task.

However, there’s a popular way to take the hassle out of saving money. It’s called the 100 envelope challenge and is perfect for those wondering how to save $5,000 in three months. There’s no need to cut out all extra expenses or live off the grid. For this 100-day money challenge, all you need are 100 empty envelopes and some determination.

Summary

1. Get 100 empty envelopes
2. Number each envelope from 1 to 100
3. Store your envelopes in a container
4. Shuffle the envelopes in random order
5. Pick an envelope at random each day
6. Insert the day’s money amount in the envelope
7. Put the filled envelope aside
8. Track your savings progress
9. Finish the challenge

What Is the 100 Envelope Challenge?

The 100 envelope challenge is a motivational way to save just over $5,000 in 100 days. This savings tool is a fun way to put some extra cash aside for future financial goals. Not many of us have thousands of dollars lying around, so the 100-day money challenge adds a twist to the concept of saving money.

How the 100 Envelope Challenge Works

Imagine saving $5,000 in only 100 days. It’s called a challenge, but the process is quite simple. You get 100 empty envelopes and write the numbers 1 to 100 on them. Then each day, for 100 days, randomly choose an envelope. Whatever number is on the front of the envelope you select for a given day, you put that amount of money into the envelope.

Using Digital Envelopes

Instead of using 100 physical envelopes, a more practical way of doing the 100-day money challenge is to do it digitally. Here’s how: 

• Download a 100 envelope challenge printable tracker with the numbers 1 to 100 on them. 
• Use an online random number generator to pick the daily random numbers that equate to the amount of money to save.
• Open a separate savings account to manually deposit or use direct deposit to automatically transfer the money during the 100 envelope challenge.

How To Save $5,000 in 100 Days

1. Get 100 empty envelopes. Use an envelope size that cash bills can easily fit into. Coins are fine to use, but they can be a hassle to keep in the envelopes.
2. Number each envelope from 1 to 100. Keep them in order for now; you will shuffle the order in the fourth step.
3. Store your envelopes in a container. Choose a container that works easiest for you. It can be a box, a basket or something else. An empty shoebox is a good option. 
4. Shuffle the envelopes in random order. The idea is to be surprised by the amount you save each day.
5. Pick an envelope at random each day. Without looking, take an envelope from the box. Try not to cheat and select an envelope with the amount you think that you can safely save that day.
6. Insert the day’s money amount in the envelope. Whatever number is on the envelope you pick, place that cash value inside. For example, if you pull the envelope with the number 50 on it, put $50 inside that envelope and seal it.
7. Put the filled envelope aside. You can place the filled and sealed envelopes in the back of the box or in a separate secure location until the 100-day money challenge is complete. If you use the same box, try putting a divider between the empty and filled envelopes or placing the filled envelopes upside down.
8. Track your savings progress. To motivate yourself not to quit the challenge, consider keeping a ledger of your savings either on paper or by using a spreadsheet or a free mobile app.
9. Finish the challenge. When your box of envelopes is either empty or replaced with cash-filled envelopes, you will have saved $5,050 and completed the 100 envelope challenge.

Pros and Cons of the 100 Envelope Challenge

Although fun, the 100-day money challenge has its pros and cons. Here are a few to consider before deciding to participate in this TikTok spinoff of the envelope method of budgeting.

Pros

• The challenge is an easy way to save cash quickly.
• Easy access to cash when you need it
• If your financial situation changes, you can stop and restart the challenge when you can.
• Can help create a money-saving habit

Cons

• It takes some motivation to finish the challenge.
• The box can be overlooked if it’s in a place you wouldn’t normally check.
• On some days, you may not have the cash to save.
• Having thousands of dollars in cash laying around could be risky.

Other Ways To Save $5,000 in 3 Months

By following these steps and tricks, you could save up to $5,000 in three months. 

Set a Goal and a Budget

If you want to save $5,000 in three months, you have to mathematically work backward in both your spending and time budgets. Saving $5,000 in three months would have the following breakdown of what you must save per unit of time:

• $1,667 per month
• $416 per week
• $60 per day

Pay Down Debt

Before you can start saving money, you must first pay off your debts. Here are two methods you can use:

• Snowball method: The snowball debt method focuses on paying off your smallest debts first. You would do this while simultaneously making minimum payments on other debts. Once the smallest debt is paid off, you move to the next smallest debt, then on to the larger ones, and it snowballs from there until you have crossed all payments off of your list.
• Avalanche method: The avalanche debt method focuses on paying off your debts in order of the highest interest rate to the lowest interest rate. This can feel like a lot at once, but it does save you money in the long run.

Evaluate and Limit Spending

Cutting down on unnecessary spending will help build your savings quickly. Here are some ways to do so:

• Do your own hair or nails instead of going to salons.
• Cancel your gym membership and work out at home.
• Cook at home and meal prep instead of eating out.
• Cancel any unused subscriptions that are on autopay.
• Make your own coffee or cold brew at home instead of going to cafes.

Lifestyle Edits

Changes to how you spend your money can be small or large. What you give up temporarily in the present could mean bigger savings in the future. Here are a few examples of how to save now:

• Sell your car and take public transportation. 
• Move to a less expensive neighborhood.
• Get a roommate.
• Switch from name brands to generic brands.

Final Take

How much money do you get from the 100 envelope challenge? In just over three months, you can save over $5,000. A major advantage of the 100 envelope challenge is its flexibility. The challenge can be very forgiving if you mess up or forget to save a day or two along the way.

If you have tried other ways of saving money and haven’t been successful, then the 100 envelope challenge might be the perfect tool to get you started. Following the challenge as prescribed can jump-start your savings and get you into the habit of saving regularly.

Caitlyn Moorhead contributed to the reporting for this article.