The $5 bill challenge is a simple, low-friction way to grow spare cash: stash every $5 bill you get and watch small bits of money turn into a meaningful buffer. This piece explains how the habit works, the pluses and minuses, how to adapt it if you rarely carry cash, and practical steps to protect or boost what you save.
If you want a saving method that doesn’t require spreadsheets or willpower marathons, the $5 bill challenge is worth a try. The idea is plain: every time a $5 bill lands in your hands, you set it aside instead of spending it. Over weeks and months, those handfuls of fives add up without feeling like a sacrifice.
How you run the challenge is flexible. Some people commit for a month, some for a year, and others stop once they hit a target number or amount. There are no strict rules — the value is in turning saving into a habit that feels like a small game rather than a chore.
“The $5 challenge is basically a savings habit disguised as a game,” said Bree Shellito, director of financial well-being for Ent Credit Union. “It works because it removes the decision making. You don’t have to wonder, ‘Should I save this?’ You just do it.”
There are clear advantages that make this approach attractive. First, it’s low effort: you don’t need apps, budgets, or a complex plan; you only need a place to put the bills. Second, it’s nonrestrictive: saving occurs in tiny increments, which means you’re unlikely to feel pinched while building a cushion.
Another benefit is how well it works for people who regularly use cash. If daily transactions regularly produce $5 bills as change or gifts, those fives compound quickly into a few hundred dollars over time. Even if the pace is uneven, the psychological boost of watching tangible savings grow can motivate continued good habits.
That said, the challenge has limits. Savings from this method can be inconsistent — some weeks you may collect several fives, and other weeks none at all, which makes it a poor primary strategy for urgent, time-sensitive goals. Also, cash sitting at home does not earn interest and can lose value to inflation, so it’s wise to move funds into an interest-bearing account periodically.
Another practical downside is that a growing share of people live largely cashless, so the $5 bill approach may not fit everyone’s habits. If you rarely handle paper money, this version of the game won’t produce meaningful results unless you adapt the rules in a way that suits digital life.
“If you try to adapt the challenge without cash, it becomes less of a $5 challenge and more of a round-up challenge,” Shellito said. “That means saving the change you would have received or rounding your purchase to the next $5, $10, or $20. It is still a solid strategy, but different from the $5 challenge.”
If you’re mostly digital, lean into round-up tools or micro-savings features offered by many banks that convert spare change into deposits. You can also treat the $5 idea as a mental rule: whenever your bank gives you cash back or you receive a small windfall, pull aside an amount equal to a $5 bill. Then periodically deposit those stacks into a high-yield savings account so they earn interest instead of sitting in a jar.
The $5 bill challenge is best thought of as a behavioral hack that complements other saving strategies rather than replacing them. It trains the instinct to save, creates quick wins, and can funnel otherwise idle cash into a separate spot. Pair it with a disciplined plan for deposits and occasional transfers into an interest-bearing account to turn those tiny gains into lasting financial strength.
