Inside the savings challenge that can boost your net worth in one year

Is 2023 the year you’ll finally get your finances together? Smash your savings goals two weeks at a time with the bi-weekly savings challenge.

The last year has been financially tough for many Australians, particularly young ones. 

With the after-effects of the pandemic and global conflict contributing to a cost-of-living crisis, it’s understandable that for a lot of people, the prospect of reaching their savings goals seems impossible. 

One way to shake off the dollary-blues of 2022 and boost your dollarydoos in the new year is to gamify your finances with a good old-fashioned savings challenge. 

What is the bi-weekly savings challenge? 

The bi-weekly savings challenge is a way to reach your savings goal by the end of one year.

It’s also known as the 26-week savings challenge, which, if you stick to it, could see you (metaphorically) rolling around in a pile of cash by the end of 2023.

It works best for those who get paid fortnightly, but you can still complete the challenge if you get paid weekly, monthly, or if you’re a freelancer who gets paid sporadically.

It can be customised to suit your goal, lifestyle, and pay cycle.

How to do the bi-weekly savings challenge

There are two main ways to do the bi-weekly savings challenge. These include: 

• The one-up method
• The set-and-forget method.

The one-up approach to the bi-weekly savings challenge involves choosing a set amount you wish to begin with and then increasing your contribution by that amount every two weeks until the end of the year. 

For example, you might start off by saving $5 the first week. Next fortnight you would contribute an extra $5, saving $10. After two more weeks, that number jumps by an extra $5 to $15, and so on. 

Here’s how much you could save by the end of one year, starting with only $5:

So, starting with $5, using the one-up method of the bi-weekly savings challenge, you could save $1,755 – and that’s not even considering savings account interest!

If you’re able to afford larger contributions, using the bi-weekly savings challenge could really help you smash your goals and raise your net worth in as little as one year.

The other approach to the bi-weekly savings challenge is known as the set-and-forget method. 

Use this approach if you have a specific savings goal you want to reach. It’s a simpler method than the previous one, but just as effective if you stick to it. 

The set-and-forget method works best for those with a consistent income. 

What you’ll want to do is work out the amount which you want to save up by the end of the year, then divide it by 26 weeks to work out how much you’ll need to contribute each fortnight.  

For example, if you want to save $5,000 by the end of the year, you’ll divide it by 26 (weeks), to get a figure of approximately $192.30. 

So, you’ll need to be able to save $384.60 every two weeks – that works out to about $96.15 each week. Achievable. 

Of course, your goal will need to reflect the amount of income you realistically receive. So, don’t go shooting for a million dollars in one year if you’re not saving somewhere in the ballpark of… $38,461.50 every fortnight. 

Don’t get discouraged if you can only save a small amount of money every two weeks. Some savings is better than nothing, especially when you consider the transformative power of compounding interest. 

How to make the most of the bi-weekly savings challenge 

By pairing your bi-weekly savings challenge with a high-interest savings account, you could actually end up beating your savings goals. 

Compound interest is a saver’s best friend. 

By being consistent with your savings, which is what this savings challenge is all about, you’re rewarded with extra money at the end of each month. 

That being said, some savings accounts come with extra requirements which you’ll have to meet in order to actually get your bonus interest. However, some could still reward your savings efforts with a good interest rate. 

You can compare savings accounts with Mozo, as well as check out the best savings accounts in 2022, as chosen by the Mozo Experts Choice Awards, or have a look at some of the latest accounts below. 

Good luck!