QoD: Which is most effective, Saving $5/day, $35/week, $150/month? (2024)

FAQs

QoD: Which is most effective, Saving $5/day, $35/week, $150/month? ›

Question of the Day: Which savings strategy is most effective: a) Saving $5/day b) Saving $35/week or c) Saving $150 per month? Answer: Saving $5/day. Do you think that setting goals is important when it comes to saving money?

If you put aside $5 per day, that's approximately $150 per month. And over the course of 30 years, you will have saved around $55,000 total. While that's a good chunk of change, it isn't $1 million or anywhere near it. The key is to invest those savings in a growth-focused ETF like the Invesco QQQ Trust.

That's because people are more likely to view the larger monthly number as an impossibility, while the smaller number feels more manageable, the researchers write. A “loss” of $5 in one day is more appealing because, well, it's smaller.

By saving just $5 a day, you'll have around $150 more in your monthly budget. Sock it away for a year, and a little more than $1,800 would be at your disposal.

Why 20 percent is a good goal for many people. There are various rules of thumb that relate to savings, whether it's retirement or emergency savings, but a general consensus is to set aside between 10 percent and 20 percent of your income each month for savings.

As you can see over 5 years $150 a week really adds up, allowing you to save up for your retirement or a house deposit.

Saving $5 per day

By setting aside just $5 per day (or around $150 per month) and investing it at a 6% return, your savings would grow to: After 10 years: $23,725. After 20 years: $66,214. After 30 years: $142,304.

Answer: Saving $5/day.

The 5-dollar rule is basically this rule that if something is less than 5 dollars or it's going to save me less than 5 dollars, if the amount that I'm worried about is $5 or less just do it. Don't even think about it.

$5 doesn't seem like a lot of money these days. For example, depending on where you are in the U.S. a McDonald's Happy Meal could be $7.89 in New York City and other major cities, but closer to $5 in other areas like Iowa.

How much is $5 dollars a day for 40 years? ›

So, let's say you're able to invest $5 a day over a 40-year period. At an average annual 10% return, you're looking at accumulating about $797,000 -- and you'll have only put in $72,000 of your own money over that 40-year stretch. That could serve as a very nice nest egg for retirement.

52 Week $5 Challenge

If you are super determined to save money this year, the 52 week $5 challenge is the way to go. For this challenge you save $5 your first week, and add an additional $5 every week going forward. So, week one is $5, week two is $10, week three is $15, and so on.

The first thing we need to know is how much $100 per week works out to on an annualized basis. There are 52 weeks in a year. That means that, after a full year of saving, $100 per week adds up to $5,200.

Saving just $200 a month may not sound like a big deal, but that's $2,400 yearly. This extra money can go a long way toward your other financial goals, like saving money or investing. Also, aiming at a “reachable” goal, like saving $200 a month, could eventually save much more each month once you get the hang of it.

Of course, your ending balance will look different if you wait to start building a retirement nest egg and therefore don't have 40 years to save that $100 every month. If you save $100 a month for 30 years, your ending balance may only come to about $197,000, assuming that same 10% return.

$5 daily is how much per year? If you make $5 per day, your Yearly salary would be $1,300.

Over the same period of time, that one dollar a day will earn $6690 in interest over 30 years and you'll end up with $17,492. If you manage to secure a 5% interest rate, your 30 years of adding one dollar a day will earn you $14,186 in interest, with the end result tallying $24,989.

Setting aside $10 a day could help you save over $1 million for retirement—but you have to start early. Although the thought of saving $1 million or more by the time you reach retirement age may seem overwhelming, the process doesn't have to be — especially if you start early.

Saving $5,000 in an emergency fund can be enough for some people, but it is unlikely sufficient for a family. The amount you need in your emergency fund depends on your unique financial situation. Consider these rules of thumb and other factors to calculate your ideal emergency fund amount.