Last Updated on June 15, 2026 12:32 pm by Maxwell Aliang’ana

A majority of millions of people begin a saving challenge in January with a fair amount of excitement. They attempt the fifty-two-week challenge, in which the sum of the money they are able to save goes up by the week. They try ‘no spend month’—where they only purchase what is considered a bare necessity. They put coins in a spare change jar which would otherwise be misplaced. And each year, most of them don’t make it! Not because they are the laziest or poorest with money, but because these challenges are in opposition to human nature. In this article you’ll learn how most savings challenges never work and what behavioral research has discovered as what does.

The All Or Nothing Trap That Dooms Most Challenges
The typical savings challenge has a simple, but risky principle — you have to save flawlessly each and every time. The 52-week challenge is a commitment to pay a certain amount each week, and to not skip any payments. Thirty days of perfect discipline is required for a no spend month. The what the hell effect is a result of this all or nothing structure that behavioral researchers have found. Suppose that you have a diet and that you take one cookie. Then, of course, many people reason, “Well, I’ve already violated my diet, so I can surely indulge in the entire box’’. It’s the same situation with saving challenges. Your car needs some repairs and you only make it to the 52-week challenge one week later. Then, all of a sudden, it’s a bad time for the perfect streak. Your brain goes on autopilot: The goal has already been achieved. For the coming three months, so you end all saving. A well-designed challenge will allow for little failures but have the ability to come back from them; most challenges do not. They want it all and it isn’t the way human beings act.

The Pain of Small, Frequent Sacrifices Adds Up QuicklyOne more reason for failure in the savings challenge is that you’re required to experience some pain quite frequently. The behavior of people when they endure losses and sacrifices has been studied by behavioral economists such as psychologists Daniel Kahneman and Amos Tversky. Their study reveals that 10 small pains can be worse than one big pain of the same pain amount. For instance, forgoing each day a $5 cup of coffee for 20 days is more of a strain than taking a $100 dinner once. The most important thing you must remember is that each day you have to make a conscious decision not to have that cup of coffee. After making that choice repeatedly, you’ve used up your willpower. On day 15 you have become exhausted. It is just this sort of little sacrifice that most savings challenges are based on. The spare change challenge is to see each and every coin and consciously place it in the bank rather than putting it in your pocket. That’s 20 or so little choices a week. A little bit of your self-control is used up with each decision. After some time, your brain is physically exhausted and you don’t care. A better way would be to lessen the number of decisions you’ll have to make, maybe even have the savings automatic so that you don’t even have to decide.

The Visibility Problem and Out of Sight, Out of Mind
Most savings challenges require you to save money in a jar, envelope or a bank account that you don’t check out often. It turns out that behavioral researchers have discovered that goals that are invisible are not a priority for the brain. The jar goes under your bed, and you forget about it. You do not use the automatic transfer, since you don’t see the balance increasing. This phenomenon is known as the “visibility effect”. It’s easier to be motivated when one can see the progress that is made quite clearly and frequently. An improvement on the design would require you to see the fact of how much you were saving every day, maybe a widget on your cell phone or a chart on your refrigerator.

The Artificial Endpoint That Destroys Long Term Habits
The majority of savings challenges have a definite finish line. Thirty days. Fifty-two weeks. One hundred days. Behavioral researchers have discovered that these endpoints are used as “finish lines”. You save perfectly for 52 weeks and then when it’s over, you simply stop saving! There was no intent to stick with the habit, so it does not stick. It was created as a short-run race. Your mind gets used to saving for a set period and that’s it rather than it becoming a lifestyle. Thus, many people can pull it off by doing a savings challenge for a week or so, feel good for that period of time, and then get back to their way of spending money in a month. There was no change in their behavior from the challenge. It merely muted it down for the time. An effective one would be one without an end point – that’s a true one. It would make saving an automatic, long-term habit that you would do like brushing your teeth.

What Behavioral Research Says Actually Works
In light of these failures, what are the implications of the research for an alternative? First, automate everything. Automatic transfers have been proven to be almost twice as effective as any challenge of willpower, according to behavioral scientists, when you get paid. Automate, get rid of decisions and self-control. If you’re saving, you don’t see the money coming out of your account, so there’s no pain to it. Second, make progress visible each and every day. Create a chart on a wall, and colour in a new square for each saving. Use an app which notifies you each day with the amount you’ve collected. Thirdly, include forgiveness. Nobody is perfect, so don’t ask for it. Indulge in a few skips each month if it’s okay with you. Studies reveal that those who do not berate themselves for failing to save an occasional goal are able to save more in the long run than those who are “on a quest to perfection”. Fourth, link saving to an actionable, powerful purpose. It’s difficult to save for an uncertain time in the distant future. It’s real and motivating to save for a special trip, a down payment on a house, or for a child’s education. Remembering the one-year point is no reason to celebrate! Celebrate all the mini milestones: the first $100, the first month of saving, the first $500, the first year of saving, and etc.

The One Simple Change That Flips Everything
If you disregard all the rest of the advice, stick with this one from the study of behavior. Make the question more about what can I do to make saving easy rather than how much can I save? All savers work their way through this. They opened up auto-drafts. They have separate accounts which are difficult to access. They establish visual markers which help to easily see progress. They no longer need to use willpower because willpower is finite, it’s only good for a day. Those who do not succeed with their saving challenge are not a lazy and irresponsible bunch. They’re just doing what they have to do and it is something they can’t do by will alone. What makes the people who achieve success, successful, is they have created their environment in a way that saves are occurring naturally without having to be worked for. They’ve taken away the option of choice. The actual takeaway from behavioral research is that is the way it is. Don’t attempt to be someone different. Simply create another system of your cash.

Conclusion
The most common reason that savings challenges are unsuccessful is that they are based on fighting the person. They will make us feel bad about ourselves when we’re not. They make seemingly tiny requests of our willpower and expectation. They obscure our achievements when we can’t see them. They portray saving as being a substitute for the negative act of abstinence. They also have artificially built ends and therefore never develop actual habits. Fortunately, the issues of behavior have been addressed in the past by behavioral research. The tools that really work are those of automation, visibility, forgiveness, emotional goals and immediate rewards. It doesn’t have to be someone who has a lot of self-control. It doesn’t have to be someone with a lot of self-control, a superhero or anything. All you need to do is create a system where saving the default option. The next time you think, “What should I do for 30 days, so that’s it,” you should instead ask, ‘What can I do for the rest of my life, but at the same time, what could I do for the first time that will not require any willpower from me the next day, in a week, in a month, in two months, or a year?’,It’s not the challenge that’s going to save you more money, it’s the question.