If you think about it, saving a dollar a day sounds like a waste of time. I mean, how far can $1 really get? Well, surprisingly, further than you would probably think. The trick with any savings goal is to just get started. It might start off small, but like a snowball, it might grow into something big. So how much would you have if you save a dollar a day?
There are a few ways you could tackle this. You can either put a dollar into a savings account, put it in a money market account, or invest it in an index fund. All three of these options have their own pros and cons that we will explore.
So let’s Jump Right In and figure out how much you would save if you saved a dollar a day.
How much would you have if you saved $1 a day?
If you saved $1 every day for 50 years straight Into a normal checking account with no interest, you would have $18,250. $1 every day for 50 years into a money market account with 1% interest, would have $23,646.19. If you invest $1 every day for 50 years into an ETF earning 10.79% you would have $594,407.58
|Method of Saving||10 years||30 years||50 years|
|Checking Account (No Interest)||$3,650.00||$10,950||$18,250|
|Money Market Account (1%)||$3,837.72||$12,759.69||$23,646.19|
As you can see, depending on how you save that dollar, it makes a whole lot of difference! Let’s look at these different options closely and see where the differences lie when you save a dollar a day.
Save $1 a day earning no interest
If you save $1 a day for 50 years without running any interest, you would have $18,250. 50 years from now.
$18,000 is not going to be enough to retire on, considering inflation. However, if you live a relatively Frugal life and don’t have any debt, $18,000 is no laughing matter. It’s still a good chunk of money that can be used for your retirement strip, gifts for grandchildren, or even a toy. All for the cost of $1 a day. Not too shabby.
Save $1 a day earning 1% interest
If you save $1 a day in a money market account earning close to 1%, you will have $23,646 50 years from now.
Now that’s more like it! Sure, $23,000 is still not enough to retire on, but as I mentioned above, it’s still a good chunk of change. Imagine having $23,000 to spend however you want when you’re retired. That’s a pretty lavish trip or some fun toys that you can afford. Again, all for the cost of $1 a day.
Save $1 a day earning 10.79% from an ETF
If you invest $1 a day into an ETF earning 10.79%, you will have $594,407.58 fifty years from now (including ETF fees).
That is half a million dollars or investing $1 a day! This right here demonstrates the power of investing and compound interest. So many people are afraid of investing and would rather save their money in a savings account or checking account. Looking at this example, you will have well over half a million dollars if you simply invested in an ETF such as the S&P 500.
Using platforms such as Robinhood, it’s completely free and easy to get started that there’s no reason for you not to. $1 a day it’s such a small price to pay to have well over half a million dollars when it comes time to retire.
According to the federal reserve, 12 percent of adults would be unable to pay their current month’s bills if they also had an unexpected $400 expense that they had to pay. I hear a lot of people saying they have absolutely nothing left at the end of the month to save. How about if you start to save a dollar a day, on the days that you can.
$1 is not a lot of money. If you have $1 leftover in a day after expenses, then throw it into an ETF Like the snp500! Even if you did it in half the time, you will still have a lot more money than if you saved absolutely nothing. With compound interest, time in the market is everything! So if you’re going to start, start now!