Periodically, I see articles like this one, titled “Turn $1 a Day Into $67,815.”
These kinds of tips are inspiring, and I’m fortunate enough to be able to stash away $1 a day (and I think I’ll try to start after reading his final figure there).
But the author’s suggestion is that $1 a day is just the change from your purchases that day. I’ve seen other articles suggesting that the way out of debt is to not spend $5 or $10 a day and instead apply it to your debt or save it.
I feel like I live like a pretty normal bourgeois American, but I don’t spend $5 a day or $10 a day that I could cut out. Sure, some days I do spend that much — but generally, no. I do have a jar where we collect the day’s leftover coins. I get up to about $40 every three months or so. That’s half his minimum level.
The author has some specific suggestions for how to save even more – he projects $123 per month easily. His suggestions are:
- Take-out vs. dining out once a month – save $45 a month
- Manicure less often – save $15 a month
- Fewer trips to car wash – save $12 a month
- Video rental vs. movie monthly – save $11 a month
- Regular coffee instead of a cappuccino on weekdays – save $40 a month
The total annual savings of $1,476, he says, could grow to $278,040 in 30 years.
Now that’s just depressing.
- My dining out bill is usually closer to $35 for our family, so even if we substituted take-out (does this mean something like Chinese? That costs about $16) we would save $19.
- I never get a manicure. Save $0.
- I go to the car wash about every three or four months. Don’t think I’d better cut that down. Save $0
- We might go to a movie once every six weeks or two months. If I cut that out I’d never go. Occasionally we rent a DVD from Redbox for $1. Otherwise we get them for free at the library. Save $0.
- Regular coffee instead of a cappuccino on weekdays – aha! I do buy a latte, sometimes twice a week. I wouldn’t bother buying regular coffee out. Save $30
My total savings if I completely eliminate coffee out would be $49, not $123. That translates to $588 a year or $105,589 after 30 years.
It’s not so shabby, and likely worth doing. After all, $100k is nothing to shake a stick at. But if you already live relatively bare, cutting out “just a few luxuries” can feel like cutting out everything.
The quandary, then, is: Do you cut out “everything” and save, save, save, or do you throw your hands up and figure you’ll worry tomorrow?
I usually try to strike a middle ground. I don’t save our change jar proceeds for retirement — we either earmark the cash for date night or put it into our Christmas gift fund. Sometimes I am content to cut out “everything” (which I put in quotation marks because as a middle-class American, I’m rich by the world’s standards even when I feel I’ve eliminated all my luxuries). Other times I simply must have a latte, and I go ahead, and figure I’ll start again the next day.
Are you good at stashing away “extra” funds? Do you have a failsafe savings strategy? Do tell …