Inspiring Savings with a 5k Challenge

May 29, 2012

I managed to cross the finish line last weekend at the Kennett Run, a local 5k race I’ve run the past few years.  I don’t like to exercise, but this event provides enough incentives that even I am inspired to lace up my sneakers and hit the pavement.  Here are some of the tactics that got me motivated:

  • An online registration email a month in advance with a discounted fee
  • A free t-shirt
  • Times posted online and compared to prior years’ race times
  • Free beer, iced tea, Gatorade, donuts, pretzels, and pizza for those that cross the finish line

So what does this have to do with inspiring savings? Well, as I was running the course, I started thinking about if the incentives of free stuff and the encouragement from the bystanders cheering me on to the finish line gave me the motivation to finish this challenge, would the same type of hype be able to encourage employees to save during a workplace savings challenge?  I’m not the only one with this type of idea, as Harvard Business School Professor Peter Tufano, co-founder of Doorways to Dreams Fund(D2D) has been championing the idea of prize-linked savings challenges the past several years.  With a grand prize of $100,000 his 2009 Save To Win Project had 11,666 participants in the program who were winners—putting away over $8 million to fund future dreams and to cope with emergencies.

You can do the same type of challenge for your employees by encouraging your workforce to try to reach a certain level of savings – whether that be $500, $1,000 or even the $5k mark.  We all need an emergency fund, and what better way to kick off summer than to have a contest to inspire your employees to save their money instead of spending it on vacations or a new summer wardrobe?  According to Tufano “For many of us, the benefits of saving money are long-term and abstract, while the reward for spending money is tangible and immediate gratification. Perhaps the way forward, then, is to infuse the act of saving money with some instant, visceral payback – some excitement, anticipation and allure.”

Follow these ideas to kick off a savings contest:

  • Set a time frame – a 30 day challenge is ideal.
  • Host a financial coaching session to provide the financial education your workforce needs to get started.
  • Offer small daily prizes for those employees who sign up for direct deposit to a savings account or who turn in a budget.
  • Have a grand prize drawing for any employee who builds up their savings balance to your target – this could be as simple as a paid day off or free parking for the month.
  • Hold after-work events such as clothing swaps, toy swaps, etc.  in place of employees hitting the mall.
  • Host a “credit card shredding day” where employees get gift cards in exchange for cutting up their favorite credit card.

By making saving fun, you can help alleviate the stress and distractions that your employees face without the security of having a financial cushion.