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52-Week Debt Reduction Challenge


debt reduction challenge

At the beginning of each new year, there seems to be a stampede of people looking to begin 52 Week Challenges. While the beginning of the year is convenient as it helps frame the 52 weeks of the challenge, there’s never a bad time to begin this type of challenge. The most famous of these challenges is the 52 Week Money Challenge which helps those who do it save $1,368 throughout the year. Before committing to this challenge, however, there’s an important question to ask yourself. Is this the best challenge to attempt considering your current financial situation? If you still have credit card debt, a better challenge might be the 52 Week Debt Reduction Challenge.

How the 52-Week Debt Reduction Challenge Works

The 52 Week Debt Reduction Challenge works basically the same way as the 52 Week Money Challenge. You take the week you’re one for the challenge and put aside that amount. In this scenario, the first week you put $1 aside, in the second week it’s $2, in the fifth week it’s $5, in the twenty-fifth week it’s $25 and in the last week of your year challenge, it’s $52. The big difference is that instead of saving the money each week, you’ll put the money toward credit card debt or any other type of debt you have and are trying to pay off.

52-week debt reduction challenge

Download a PDF version of the chart here.

It may not first appear that there’s a huge difference between the two challenges since at the end of the challenge, you have put $1,368 aside in both instances. The reality is that there’s quite a significant difference between saving money and putting money towards debt, and due to this it makes sense to opt for the 52 Week Debt Reduction Challenge if you have any debt. By using the money to pay off debt rather than to save it, you’ll end up reducing the amount of interest you have to pay on your overall debt. In other words, the money put towards the debt is actually worth more than the $1,368 created because you won’t have to pay as much in interest to the credit card company. This will save you more money in the long run.

Making Extra Money to Pay Off Debt

The big question then becomes where are you going to find the extra money to put each week towards debt reduction? Chances are you aren’t sure how to do this or you would have already started to put extra money toward paying down your debt. In this case, it can be beneficial to use a random money generator which will give you ideas on different ways you may be able to make some extra money. If you spend enough time looking at different ways you can possibly make a few extra dollars here and there, you should discover a few side hustles that’ll make enough that you can put aside enough to succeed in your debt reduction challenge goal.

Probably the most complicated part of the 52 Week Debt Reduction Challenge will be making payments toward the debt. The best scenario will have you paying off the debt each week as you have the money to put towards it. This may not be possible for all types of debts. Before doing so, contact your credit card company (or whatever company has the debt you’re looking to pay off) to ask if you can make multiple payments toward the debt during the month. If not, the easiest option is to make the payment once a month added on top of your regular debt payment.

In the end, you need to decide what is more of a priority when it comes to your current financial needs. Is saving money or debt reduction more important at this moment for your finances? This will determine if the 52 Week Money Challenge or the 52 Week Debt Reduction Challenge is the best one for you to accept. Putting an extra $1,368 over the next year toward your credit cards would be a big step in getting yourself out of debt and it’s a great way to make getting out of debt a priority in your life. If you have been considering doing a 52 Week Challenge, changing the focus from saving money to reducing debt may be the exact move you need to make to get the most out of the challenge.

Other Money Challenges to Try

Confessions Time: Hiding in Shame


I disappeared on you. And I won’t beat around the bush (I mean, the post title has “confessions” in it). It’s mostly because I got very spendy.

Three Paycheck Month

January has been one of those coveted three-paycheck-months for me. January’s rent was paid out of my December 20th check. I got paid on January 3rd, and that went to debt, savings, and monthly bills other than rent. And then I got paid on the 17th and blew more than half of it on unneeded items. Why? Probably because I’m riding high on a feeling of success right now. There was the news of my promotion, my extra-large bonus, and I’ve lost a little weight from maintaining regular exercise. I started running and lifting weights to keep the great sleep record I had in Nova Scotia going, and I’m feeling great all around. I know I owe this confessions post to you….here goes! But first, a photo of my frozen eyelashes. I have been running in some crazy weather, and I love it!

So Why the Shame?

The reception to my last post about spending a couple thousand dollars to go to Europe to see my family SHOCKED me. You guys, a year ago I was in financial shambles. I was still borrowing money from my little sister in university to cover bills! I had no idea how to get past the paycheck to paycheck cycle. For anyone interested, by the way, I have been keeping a calendar almost identical to this one for about eight months, and I credit this method entirely with my newfound ability to never go into debt on a paycheck any longer. I spent over a decade of my life adding to debt each month and stopped immediately last year. Since then, I’ve been actively knocking down debt and haven’t added a single dollar of debt.

When I started blogging here, I didn’t have a penny of savings (outside of the bare minimum for work retirement plan matching). This lady tried to save money her whole life and couldn’t manage it. And now I save by habit every single month, in many areas – investments, my savings account, and my retirement!

My Plan Is Not Your Plan

Let me repeat this again: I am not here to be aggressive about paying down debt. This isn’t going to be some magical transformation in which I am debt-free in five months, even though I could be. There is more than one way to skin a cat and the only one who has to be at peace with my choices is me. Some of my dearest family members are in their 80s and I haven’t seen them since 2017. I know what feels right in my heart. That said, I am taking into consideration the advice some commenters mentioned, saving for the trip and using my entire bonus for debt. I’ve got to crunch some numbers and see what I can do.

I’m proud of my radical transformation! I was a financial DISASTER last year. So, I decided to not go crazy but to get a few things done with the magic extra paycheck money that I had wanted to for a long time.

Confessions of a Spendy Blogger!

Where did the money go? Here are some highlights (or lowlights, as many commenters will likely feel):

  • $225 on a barely used $700 espresso machine with a lifetime warranty. I called the company and had the warranty issued to me with no problem
  • $210.50 for four tickets to the Toronto Blue Jays Home Opener. I haven’t missed a Home Opener since I was 15 years old. I’m a rabid fan and my mum, sister, and nephew are flying out to join me! They are paying for their airline tickets, so I got the Jays tickets. I took the lower seats out of my cart and swapped in nosebleed seats to save some cash.
  • $130 on Chinese New Year dinner at a beautiful seafood restaurant with nine of my friends. I took care of my Chinese friend’s dinner. She was devastated to not be able to travel home to see her family due to coronavirus. She’s also fresh out of school with little money and it felt like a nice thing to do. SIDE NOTE: This was one of the best meals I’ve ever had in my life, and the only time I went out at night since January 4th.
  • $92 on Noom. I mentioned I tried this back in September and I loved it! But at $59/month, I wasn’t going to sign up. They sent me an email offering me a full year for $92 and I signed up right away. I’m on week four now and I am forming habits I never thought I could. I’ve only lost a few pounds but I’ve shed a decent amount of inches and did I mention I AM SLEEPING LIKE A BABY? Life-changing.
  • $60 for brisket to make traditional corned beef for a dinner party on Friday. That’s sitting in my fridge for ten days and then will be delicious
  • $50 for a memory foam dog bed
  • $70 for a nice blazer and $18 for alterations.
  • $220 to my for-fun investment account, which is currently giving me 12% returns
  • $60 for two lunches out with colleagues (around $30 each)

Ending on a High Note

After my usual groceries and living expenses, I still have about $800 of that paycheck left.

For the first time EVER, I managed to track every single transaction in a month! I am using the One-Twenty-Five budget I mentioned in a previous post and it is working for me. Like, seriously working for me! Trying to automate all my transactions with Mint.com or YNAB just never worked, and I distinctly disliked trying to figure out what wasn’t being captured. With this new budget, I just log in to Google Sheets on a coffee break at work every other day and tally up my transactions from my various online accounts. I almost never use cash, so this is working very well! I’m so happy to see the numbers, but also pretty horrified. It had to be the most hedonistic month that I finally figured out how to track my spending.

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