There is a Tik Tok challenge that has emerged for several months. Discover the “envelope challenge” and the long-term benefits of this technique!
TikTok is a social network very popular with the new generation. There you can find all kinds of videos on new trends. It can also be a source of information on personal finances. THE “100 envelope challenge”, a particularly interesting approach which has established itself on the platform. It’s about a solution to save money through the envelope system. So, what is the 100 Envelope Challenge and how does it work?
Huffpost looked into the issue and asked financial experts to detail the method, as well as its advantages and disadvantages.. “The 100 envelope challenge is a viral money saving method in which you number 100 envelopes from one to 100″, explained Jack Howard, head of financial wellness at Ally Financial. And to continue: “Each day, you select an envelope at random and insert the corresponding amount to keep until the end of the challenge. So, if you choose envelope #32, you should put $32 in the envelope.”
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A very popular challenge on TikTok
After a hundred days, you could have a total of $5,050 in cash saved up. The challenge can also progress linearly rather than randomly. The alternative approach would be to start with envelope #1 on the first day and put aside $1 then $2 in envelope #2 the next day, $3 in envelope #3 and so on. . “Popularized by TikTok, the 100 envelope challenge is essentially a way to make savings more accessible“, revealed said Courtney Alev, a consumer advocate at Credit Karma.
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You can also adjust your totals based on your personal savings goals. “If putting that much money aside isn’t realistic, you can customize the amount per envelope to fit your budget, but it still seems like a challenge“, explained consumer finance and budgeting expert Andrea Woroch. And to specify: “At the end of the day, you still save – and save more than if you hadn’t participated in the challenge at all.”
A phenomenon that is not new
Although the 100 envelope challenge is linked to the TikTok era, the concept of putting cash in envelopes to encourage saving is not new. In fact, this has been around for quite a while. : “The envelope budgeting method has been around for a long time, but with a different objective”said the specialist, that previous versions required you to set aside a certain amount of money for each expense in your budget. “You can only use that amount, so if it runs out, you’re out – which can keep you from going into credit card debt and to follow a tight spending plan.”
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The envelope challenge presents many benefits. This is because it also requires you to practice mindfulness around money. In fact, doing something positive for 100 days is a good way to develop healthier habits. “You have a daily goal that requires thoughtful planning to execute“she concluded.
A graduate of CELSA, I have always been passionate about journalism since my early childhood. Originally from the South of France, I left Nice, my hometown, to come live in…