Rachel Cruze: Save $5K in 3 Months With These 4 Money Challenges

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Having some extra money saved up is always a good idea, but growing your savings can be tricky. In a recent YouTube video, personal finance influencer Rachel Cruze discussed four challenges that could help you quickly hit a big savings goal of $5,000.

Give one (or more) a try to boost your savings in just three months. 

Minimalist Challenge

You’ve probably heard of living a minimalist lifestyle. It’s all about simplicity and cutting out excesses to focus on what’s important. In the minimalist challenge, you apply these principles to your finances. 

The challenge is to get rid of a certain number of items you no longer need every day for a month. The number of things you have to clear out is the same as the day of the month. For example, on the 10th day of the month, you get rid of 10 items. 

Cruze recommended focusing on a different category each day, such as your pantry, closet or bathroom. Narrowing your focus can make the process less overwhelming so you don’t feel like you have to tackle your whole house at once. 

Take these items you no longer need and decide what to do with them. You can throw them out or donate them when appropriate, but also consider making some money by selling them on resale sites like eBay and Poshmark.

“You can make an extra 300 bucks by selling a designer bag on Poshmark that you haven’t worn, or maybe an extra $500 for selling a sofa that you never use,” Cruze said.

Each sale will help grow your savings, bit by bit.

Consumption Challenge

The next challenge Cruze suggested is the consumption challenge. In this challenge, you have to use up what you have before buying any more of that item. The goal is to be more mindful about your consumption so you can cut down on unnecessary spending. 

For example, you’ve probably gone to the store and bought more pantry staples even when you have plenty at home. You might get drawn in by a good sale or an interesting new product and think, “I have to have it!” But a lot of the time, you already have things at home that serve the same purpose. 

So, try the consumption challenge of using the items you already have — whether that’s food, toiletries, decor, clothing or anything else. Only buy new items when you’re replacing things so you know you actually need them. 

No-Spend Challenge

The no-spend challenge is a bit of a misnomer because you are still allowed to spend money, but just on essentials. As Cruze described, in this challenge, there’s “no eating out, no shopping, no excessive subscriptions — you literally cut everything back.” 

Maybe you cut out your streaming services or eliminate food delivery. The goal is to only spend money on things you absolutely need, like housing, transportation, healthcare and food. 

It will be difficult, but by the end of your no-spend month, you may realize you don’t miss the things you cut out that much. Then, you can adjust your budget going forward to only include essentials and things that bring real value to your life. 

Cruze mentioned that when she did the no-spend challenge, she realized how often she was casually buying things on Amazon that she didn’t need, though they’d be nice to have. Participating in this challenge can help you find areas of mindless spending so that you can cut them out and save money. 

100 Envelope Challenge

For the 100 envelope challenge, you take 100 paper envelopes and label them from one to 100. Every day, you randomly select an envelope. Whatever the number on the envelope, that’s how many dollars you have to save that day. 

For example, say you pull the envelope labeled 35. That day, you would take $35 in cash, put it into the envelope and set it aside. At the end of 100 days, you will have saved over $5,000. And the best part is that you never have to save more than $100 in a day. 

Cruze says many of her coworkers have tried the 100 envelope challenge. “It’s great because it’s a little bit of a game and it forces you into a system.” 

If you tend not to keep cash on hand, you can try an adapted version of this challenge. Open a separate savings account, and when you draw your daily envelope, move the corresponding amount of money into that account. Don’t withdraw any money from the account until the challenge is over to see how much you saved. 

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