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Small Savings, Big Impact

Spongebob Patrick,, I have $3 Dollars MemeWe hear sayings all the time. For instance, an apple a day keeps the doctor away. Which implies if you eat healthy, you will keep yourself and body healthy. That is solid childhood advice. However, we can use that same lesson in our finances. So I propose a new saying, “A dollar a day helps our investments pay.” Let me explain.



How many times a day or week do you stop and buy small items? You stop and get some gas and pick up a $1 candy bar. On your way to work and pick up a $5 cup of coffee. Or going out to eat with our coworkers every day for lunch for the 5 day work week. For the below example we will exclude weekends from our lunch column. Now, there is nothing wrong with this. I do think it’s important to treat yourself from time to time. We all have our things we love buying every day, myself included. But what do these purchases mean for our finance? How does this factor in, and why am I even discussing it in the first place?


If you follow the DGI community, you understand the potential for time value of money and investment growth. Let’s break down these numbers by simply what you would spend in these scenarios:


Yes I realize the numbers don’t all evenly line up and are a little fuzzy. That isn’t the point. We are more so just looking at the numbers and what they do.





Wow, even small amounts like this can add up to big amounts over time with the proper discipline. That is cash money in your pocket. Now on paper, this looks great in theory. But you might say in the grand scheme of things this really isn’t that much money at all especially since it took so long to build up. I agree, but as I mentioned, this is idle cash saved. We have done nothing with it at all. So let’s see what the numbers would look like if we invested all of this cash. If we plug in the numbers into my Future Portfolio Potential tracker, we can see find the results. For this example, we will use a small 3% yield per year (basically just collecting dividends) that will suffice, and this does not factor in market conditions, stock price changes, or volatility.



Can you believe that? We have easily doubled our money in all scenarios. Using the rule of 72 as stated by Investopedia: “The ‘Rule of 72’ is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.” For our example it will take us about 24 years to double our money. It’s hard to see exactly because we are also adding more capital over time into our investments. But you can clearly see the growth potential which works better in the long run than just holding onto and saving the money under your mattress for retirement.


Speaking of sayings, here are a few more. We have all heard “Cash is king.” I can think of so many things I would do if I had this kind of cash and makes me think twice when I get my cravings for caffeine. Another great quote from a friend of mine which also applies here is “work smarter, not harder.” While it applies in life, it also applies to your finances. You put your money to work for you and it will pay off in Dividends later. See what I did there DGI community? Small savings now can add up and make a big impact later. So as a parting phrase, “A dollar a day helps our investments pay.”


20 Responses to “Small Savings, Big Impact”

  • Great post. It is what David Bach calls the Latte factor.
    I enjoy reading your post. A great way to show people how small things can have a huge impact.

    Keep up the good work


    Pollie recently posted…The automatic Millionaire – Book reviewMy Profile

    • Dividend Daze:

      I have to keep reminding myself of this every day. Sometimes those $1 beverages on the way to work get the best of me lol.Thanks for stopping by.

  • Nice post! A funny named tool to help show these numbers:

    I’ve never verified the numbers against my own calculations, but solidifies the concept. Thanks for sharing!

    • Dividend Daze:

      Haha that is a great calculator. I have never stumbled upon that before. Thanks for sharing. And as always, I appreciate your comments.

  • Your coffee example is the exact same thing I say to friends or co-workers. I always calculate it on a 10-year base to see what someone could save. And thats even without investing the money you save.
    Mr. Robot recently posted…This is my (first?) buy for June 2017My Profile

    • Dividend Daze:

      It’s crazy to think how those small amounts add up so much. I’m guilty of it myself sometimes. We could do so many things with that money! Thanks for your comment.

  • Very good message. Many people have their budget destroyed by little purchases like this. It really gets scary when you see what investing would do.

    Nice post.
    Grant @ Life Prep Couple recently posted…How to Lose Weight – The Not So Secret First StepsMy Profile

    • Dividend Daze:

      I agree. And I think we are all guilty of purchases like this at some point. Budgets are made for a reason and these little things can add up way too fast. Compounding is an amazing thing. Thanks for stopping by and commenting!

  • I don’t think people realize the power of compound interest. I think that’s why Einstein said it was the 8th wonder of the world 🙂 I definitely agree that every little bit helps and these charts above definitely reinforce it 🙂 Thanks for sharing.
    Mustard Seed Money recently posted…One Way To Save 5% Each MonthMy Profile

    • Dividend Daze:

      Ah I knew there was something in my article I was missing. Should have for sure put that great quote in there haha. Your right, every little bit helps. Thanks for your comment.

  • Nice post. I keep telling everyone to save a lot and save early. I myself realized the power of compounding when i was 35 :-(, I hope it’s not too late. My daughter knows it from day 1 … she does not care about it yet 😉
    dividendgeek recently posted…Vanguard believes in active managementMy Profile

    • Dividend Daze:

      It’s never too late as long as you are smart about it and using it to your advantage. The important part is you are now aware and are teaching your kids. They will realize the full power of compounding eventually. Thanks for your comment.

  • Love the graph you showed there! Money articles with visuals are the best. Keep hustling for your finances.
    Brian Robben recently posted…10 Ways To Win Your Motivation BackMy Profile

    • Dividend Daze:

      Thanks Brian! Graphs and visuals always help. I need to find or make some more infographs here pretty soon. Thank you for the comment.

  • Great post and love the new saying. My husband is a big coffee drinker ( 2 to 3 cups a day) and it was only until we started tracking our monthly expenses in detail that he realized how expensive it was. As you showed above the costs really do add up. I don’t remember the exact number, but he was spending something like $150 dollars a month on just coffee! After seeing that he cut back to buying 1 cup a day 🙂

    • Dividend Daze:

      Wow that is a lot on coffee. You can buy a really nice coffee maker and do it at home for that price. Then there would be less cost going forward. It is amazing how fast it adds up. At least you guys are smart and caught on. Some habits are hard to break. But 1 a day is a lot better than 3. As long as you budget for it. Thanks for stopping by and commenting!

  • SMM:

    I like coffee a lot. But I usually drink it at work were it’s free 🙂
    And when I buy it from Dunkin Donuts sometimes, I always look for the on on sale. You’re right these small things add up and using cash is almost like a built in control to make us more aware of our spending. Finally I like to buy these small things with my family so that we all enjoy the experience together.
    SMM recently posted…How Do I Protect My Investments?My Profile

    • Dividend Daze:

      I usually just use my credit card for all purchases because I get free money in the form of cash back. But you make a great point, by using cash instead to make some of these small purchases, it gives you a visual representation of what you are actually spending. Physically see the money leave your wallet. Thanks for the comment. Hope to see you around the site more often.

  • I struggle with this so much. My vice is Starbucks. I hate it, but they know my name there AND they know my drink order. I won’t admit to going everyday but it’s darn near close. I used to go several times a day, but now I’m much more disciplined. Maybe I should start telling myself that a dollar a day helps my investment pay.
    Dividend Portfolio recently posted…How To Invest $20,000?My Profile

    • Dividend Daze:

      There you go. I do the same thing. There are a handful of places that I go around where I live that I am a “regular” at. But it costs you a lot of money to become regular status. I struggle too, but getting better. As always, I appreciate your comments.

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