This One TikTok Money Tip Is Shockingly Effective

It’s tough to deny the propensity of social media to occupy time and wield influence in our lives. There’s a seemingly endless array of topics you can find on most platforms, especially when it comes to personal finance. A recent GOBankingRates survey revealed that 32% of Americans use social media for money advice.

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It’s not always good though, as 27% of Americans reveal taking bad money advice from TikTok, according to a report by Edelman Financial Engines. It’s not all bad, though, as some recommendations found on TikTok can be quite helpful with your finances. This one money tip is quite powerful.

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The 100 Envelope Challenge

Saving more money is a challenge facing many Americans. The 100 envelope challenge on TikTok can be an effective way to alleviate the problem. The challenge sounds cumbersome, but it’s not.

You take 100 envelopes and label each one from 1 to 100. To begin, you take an envelope each day and place a dollar amount in the corresponding envelope. For example, on day one, you place $1 in the envelope; on day 20, you put $20 in the envelope, and so on.

If you follow it to the letter of the law, you will save $5,050 in 100 days.

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Why Is the 100 Envelope Challenge Effective?

Saving money can be challenging, especially for people living paycheck-to-paycheck or for those with little experience saving money. What makes the 100 envelope challenge effective is its simplicity.

It gives you a goal that forces you to save. Moreover, it’s straightforward to follow. In reality, it’s not a new idea. It’s a spin on the cash envelope budgeting method that has been used by budgeters for years to stay on top of their spending.

There’s a mental component to handling cash, too. The 100 envelope challenge makes saving a visual exercise, possibly encouraging you to continue to save versus mindlessly spending it, for example.

Tweaks You Can Make to the 100 Envelope Challenge

Saving north of $5,000 in a little over three months may seem overwhelming to most. If you can save that amount over such a span, that’s fantastic. But, the ability to customize this challenge makes it more effective.

As with most things in personal finance, you can personalize the 100 envelope challenge to fit your situation. You don’t have to fill the envelopes in subsequent order. You can shuffle them and fill them at random.

Alternatively, you can fill a set number of envelopes per week. Of course, this will delay reaching the end goal of $5,050 saved, but it’s still money saved. Finally, if you don’t want to deal with all of that cash, consider transferring each day to a high-yield savings account . This lets you earn interest on deposits and complete the challenge without keeping a lot of cash on hand.

Don’t overlook reducing the number of envelopes, either. You could set your challenge to 50, for example, as a more suitable option for you.

Know Your Situation First

Before following any financial advice, especially from social media, you must know your situation. The influencers on TikTok don’t know your particular situation in life, but you do.

For example, before following any savings challenge you don’t want to ignore high-interest credit card debt. If you have other high-priority goals, you want to keep those in mind too before following a money tip from TikTok, as it could delay reaching those goals.

It can be difficult to actively save money when you’re low on resources or new to managing your money. Following a money tip like the 100 envelope challenge can be a good way to begin to save and become financially stable. Just make sure you tailor it to your situation, if necessary, and don’t be afraid to regularly revisit it to make potential tweaks. Ultimately, don’t pursue every fad you see on social media. Instead, determine how it may impact your finances and if you will benefit from it.

TikTok isn’t always bad. Here’s one simple money tip it promotes that works well.

This article originally appeared on GOBankingRates.com : This One TikTok Money Tip Is Shockingly Effective