100 Envelope Challenge — Is the Trend Just Another Way for Women to Feel Helpless Over Their Finances ?

Interested in trying the 100 envelope challenge on TikTok? You’re not alone. Money is something we’re all worrying about more and more. After all, it’s no secret that as the cost of living continues to rise, the average salary isn’t exactly keeping up. In 2023, 31% of Gen Zs claimed to be worried about their financial situation. A 2024 study found that almost half of young people have “money dysmorphia”, an anxiety about finances that happens even when the individual is relatively financially stable.

In this climate, it’s hardly a surprise that young people are searching for hacks to save a little extra each month — on TikTok, for instance, a new saving challenge is picking up steam. The 100 envelope challenge sees people stowing away extra cash every day in a dedicated folder. The challenge has had 6 million views here in the UK in the last month.

However, while the challenge may initially seem like a positive money-saving hack, some financial experts have concerns that it might actually be making our financial anxieties even worse, while simultaneously being an ineffective saving method.

“It makes total sense that Gen Z would seek advice on saving,” says Alice Leetham, Finance Expert at Moneyzine. “In this economy, many are feeling the squeeze, not least people who are just starting their careers and likely have a modest amount of disposable income.”

However, she warns that “gamifying saving” may have some downsides. Let’s explore why.

What is the 100 Envelope Challenge?

The 100-envelope challenge involves purchasing or making special money-saving binders with 100 envelopes. Each envelope has a target amount ranging from £1 to £100. The idea is that by filling up the binder over the course of the year, you’ll eventually save £5,050.

Is the 100 Envelope Challenge too good to be true?

According to Leetham, the challenge may have too many downsides to be worth trying. For one thing, although breaking down savings into 100 parts may feel achievable, in reality, saving £5,050 a year may be impossible.

“The 100 envelope savings challenge is something that sounds entirely reasonable on the face of it, but when you look at how much money you’ll be expected to save each month you realise it’s ultimately futile unless you’ve got a lot of disposable income,” she says. “Considering the average net monthly income in the UK is £2,297 according to ONS, I suspect you’d struggle to keep up with this challenge.”

In some cases, being unable to keep up with the challenge might even have an adverse effect on your mindset.

“These challenges feel akin to fad dieting,” she says. “Something that can, at best, leave someone dissatisfied with the results, but at worst, can leave people feeling disaffected and not wanting to engage anymore.”

There’s another downside, too — saving physical money in a folder may feel great, but it’s not actually a smart saving method. After all, you won’t accrue any interest if your money is simply sitting in a binder on your desk. “If you were to save that money in an online savings account, you would also benefit from the additional interest as well as your savings,” she suggests.

Is there a smarter way to do the 100 Envelope Challenge?

Leetham recommends trying a similar method with an online bank, such as Monzo’s 1p Savings Challenge, which is much more achievable. “On January 1st you would save 1p and on December 31st you would save £3.66,” she explains, adding, “Even if you’re late to the party and want to join in this year, it would only cost you around £40 to catch up.”

Plus, this kind of challenge means you would benefit from interest.

“I would wholly recommend this challenge as a way to dip your toes into saving,” she says.