As the cost of living crisis continues to wreck our finances, we’re all trying to find ways to save a few pennies. What better place to find money-saving tips than on the clock app?
TikTok has become a huge resource for budgeting and spending advice – but do the hacks actually work?
Craft, the company building the future of documents, has analysed five of the most widely used money-saving challenges on TikTok to discover if they genuinely help people save money - or if they are simply myths.
“It can be tricky to discern what challenges and tips really work. Therefore, it’s important to do your own research and make sure the advice you’re getting is from a trusted source,” a spokesperson for Craft told HuffPost UK.
Looking to see if TikTok can help you save money? Keep reading.
1. Cash Stuffing
Cash stuffing is a technique that encourages people to budget by putting money into different envelopes based on different categories. You can use this technique to save towards anything from food shopping, clothing, or travel.
The concept is that by having physical money and tracking your spending, you can better control your finances and avoid overspending.
Does this work?
This method can be a great way to visualise your spending and stay accountable. Although this challenge can be effective, it isn’t for everyone. While you can definitely set out and achieve saving goals, the rise of cashless stores, restaurants, and online purchases makes the practicalities of only using cash a little less realistic.
2. The Penny Challenge
The aim of the challenge is to end the year (or the 365 days) with £667 saved. Essentially, the challenge starts by saving 1 penny on the initial day and adding another penny to the amount saved every day.
So if you start with 1 penny on 1 January, on 2 January you save another 2 pence, on 3 January you add 3 pence into your saving pot, and so on. If you stick to it, you will have saved £667.95 in total by the end.
Does this work?
If you’re someone that struggles to put aside money, this could be a tactic for you.
While the biggest challenge may come with remembering to put aside money each day - you can keep track of this on your phone and set daily reminders. Also, it means that towards the end of the year, you’ll have to put away upwards of £20 a week.
3. No Spending Month
Of course, there’s no better way to save money than by not spending at all - and videos under the ‘no spending’ challenge have gained over 2 million views on TikTok. The challenge essentially is to cut out unnecessary spending habits and only spend money on essentials such as bills and food shopping.
Depending on the rules you set out for yourself, the aim is to save as much money as possible and avoid spending on things like clothes, dinner, or activities and items deemed not necessary.
Does this work?
If you are cutting out spending in most areas of your life, you are definitely going to save a big portion of your income. So while this challenge works, it can also be an extreme way to save money - especially over the long term. But if you are looking for a short-term solution to saving some money, and want to challenge yourself, it’s worth giving it a go.
4.50, 30, 20 Budget Rule
Though this rule did not originate from TikTok, it’s becoming popular again on TikTok. The idea is to split your spending into three categories: needs, wants, and savings. With these categories, 50% is for needs, 30% is for wants and 20% is to put aside as savings.
Needs are generally classified as bills and food, while wants could be clothes, dining out, and hobbies, among other things.
Does this work?
This is an easy way to budget your income as you can incorporate it into your spending plan across the entire year. As a general rule, it’s an excellent way to make sure you are taking care of your spending needs, while still putting money aside.
5. The Savings Ladder
The savings ladder offers a new twist to saving for specific items you want. Instead of putting aside the exact amount of money for the item you’re looking to purchase, multiply the cost by 2, 3, or 4 to accumulate a larger amount.
For instance, if you are saving for an Apple Watch, you may need around £400 to purchase it. If you wait till you’ve saved £800 before purchasing, you’ll be left with £400, meaning you can purchase it and have money saved over.
Does this work?
This is an effective way to reward yourself every time you reach your target without dipping into savings. For people that love treating themselves to big-ticket items, this is a great savings tactic.