Good old-fashioned saving has gone viral.
It’s called the “100 Envelope Challenge” on TikTok, and it promises to put more than $5,000 in your pocket in just 100 days. Billed by influencers as a fun, easy way to save money, it’s geared toward young investors facing higher rent and grocery bills, student loan debt, and a general feeling of never being able to make the money last the month.
It works like this: Label 100 envelopes from one to 100. Since this is social media, after all, said envelopes should look really cool for the videos. On day one, put $1 in envelope 1. On day 2, put $2 in envelope 2. Continue this way until day 100, when your final savings deposit of $100 will bring you to a grand total of $5,050. Cue the exuberant videos with piles of money. One woman claims to have done it three times and saved $15,000.
It’s buzzy, but is it realistic? Not really.
First, where is the money coming from? Some people don’t even make $5,000 in 100 days. And, according to Bankrate, 57% of US adults can’t afford a $1,000 emergency expense. When broken down by generation, GenZers and Millennials are more likely to be worried about covering basic expenses, let alone stashing some away.
Second, the challenge is backloaded. Savers need to put away almost $500 in the last week.
Third, the idea of stashing five grand in a box under the bed just seems a little sketch. It feels a bit like a fad diet or makeup trend that seems great when you scroll but hard to achieve on your own.
There’s no question TikTok offers an abundance of questionable financial advice. But given how popular the envelope challenge has become, I decided to ask certified financial planner Doug Flynn of Flynn Zito Capital Management for his take.
“I’m all for whatever it takes to get people talking about saving money. That’s a good thing,” he told me.
“But it’s gimmicky,” he said. “It’s laudable to try to put some money away, but it doesn’t feel very goal oriented to me. What are you saving this money for?”
He notes the envelope idea is actually an old-school financial planning tool — one envelope for vacation savings, one for the car payment, one for dining out, etc.
But the envelopes today are more metaphorical in an era of instant account access and budgeting software.
And he questions the sustainability of the final week of the challenge. “Think about the functionality of the last five days — who’s actually going to be able to come up with $500 in the last week? Where is a GenZer going to go and find $98 today and $99 tomorrow?”
Even if you have some amazing side hustle or can sell Grandma’s jewelry, there are more viable ways to grow a legitimate nest egg.
The more sustainable plan is to save $5,000 over the course of a year, consistently, and putting those funds in an investment account or bank or credit union. Saving $13 a day equals $5,000 in a year, not including the interest. Save $5,000 a year starting at age 25 and, at average market rates, that grows to more than $1.1 million by age 65.
The envelope challenge videos have a get-rich-quick flair that is certainly viral and entertaining, but obviously the exception, not the rule.
“How many people will get past the second week?” Flynn asks.
Here’s the more boring, and sustainable challenge. Get up to $10 a day and stay there. Slowly edge up to $15 a day and think about where to park it. You want to periodically add into that savings. $15 turns into $5,000, and $5,000 into a million.
It’s more boring, it takes more time, it is more consistent — but it has more lasting results, says Flynn.
— CNN’s Kevin France contributed to this report.
