Two Cents readers are likely familiar with the 52 week money challenge—you increase your savings by $1 every week for a year. The first week you save $1, the next week you save $2, and so on, until you’ve accumulated $1,378 by the end of the year.
Some people prefer to flip the challenge—start with $52 the first week and work your way to $1, so you’re getting the hardest weeks out the way first and not setting aside $200 during gift-giving season. That’s all well and good, but if you want to supercharge your savings, then I’d try a variation of the 52 week challenge, tailored to your IRA or Roth.
I came across the concept from a commenter while digging through some old Lifehacker articles. And then lo and behold, he wrote it up for Hackerspace, an old Lifehacker community. The concept is this: You contribute $89 to your Roth or traditional IRA during week one, and then increase by $1 over the course of the year, to $140 in your final week. You’ll end up with just under $6,000, the limit for contributions this year (I’ve updated the numbers from the Hackerspace post to take 2019's contribution limit into account).
With tax rates low, this is an especially good time to take advantage of your Roth, if you have one, though with stock prices declining, it’s a good time to snap up more shares all around. Small, weekly contributions will also ensure you have dollar-cost averaging, which you can read more about here, on your side. Savings is good, but investing is even better.
If that sounds like a lot, and it is, play around with the numbers. The old starting point was $80, which get you near enough to $5,500, the old IRA limit, after 52 weeks’ time. Of course, it’s not meant to be easy, it is a “challenge” after all, so start with $89 and see if you keep adding until the end of the year. If you can’t, then set up automated investments of a manageable amount of money, even if it’s $10 every week or every month. Over time, it’ll all add up.