Martin Lewis advises on savings accounts for deposits
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When trying to save money, the process of achieving the end goal can seem daunting. Savings challenges are a possible way of making saving more manageable.
The one percent at a time savings challenge is one of the challenges that are available which could help people save money.
As the name suggests, the challenge involves saving towards their savings goal one percent at a time.
With this challenge, the saver will need to map out ahead of time what their desired total is.
Once that has been done, they can save in small stages towards reaching their target.
The 1% at a time challenge may help you boost your savings (Image: GETTY)
This is done by dividing the desired amount of savings by 100.
The saver must then make 100 deposits into their savings to ultimately reach their goal.
Rather than needing to save an increasing amount every day or week, or attempting to save a large amount in a short space of time, this breaks saving up into small, manageable chunks.
One of the benefits of the challenge is that it is very flexible.
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The challenge can be tailored to suit the amount of money the saver wants to have by the end.
Also, there is no time scale set in stone for this challenge.
One can put money away as regularly as they see fit, without the pressure of saving every week or even every day.
This could mean only putting one percent towards the goal every month, as could be the case with a larger savings goal.
Interest rates for easy access ISAs (Image: Express)
They can still complete the challenge by consistently pushing towards the target on their own timescale.
For example, if one’s savings goal is £1,000, perhaps to be used for a holiday, they would only need to save £10 at a time.
For a larger savings goal, such as a house deposit, a larger saving would need to be set aside 100 times.
If a deposit of £10,000 wanted to be saved for, the saver would need to put £100 into their savings each time.
Taking up the challenge in order to save for a large sum such as this may make the process seem easier.
The 1% at a time challenge provides flexibility for savers (Image: GETTY)
It could take one’s attention away from an overwhelming amount they need to eventually save, and allow them to focus on the next one percent.
Some people may have a certain amount of cash available at the start of the challenge due to the lack of places to spend their money during the COVID-19 pandemic.
They could use this extra money towards the challenge and get a head start, rather than starting from zero percent.
The challenge may also be helpful for those who are trying to become debt free.
By breaking down the overall amount of debt one is in, they may find it easier to stay on track and chip away over time.