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How Saving $5 A Day Can Change Your Life

How Saving $5 A Day Can Change Your Life

How many times do you spend $5 each day? That morning coffee, a quick sandwich at lunch, a snack at the gas station after work, or a drink out with friends at night can all cost $5 or more. What if you decided to not purchase one of those items each day? What if you made your coffee at home instead of buying it at a fancy coffee shop? What if you packed your own sandwich or decided to get water instead of a coke when you went out at a restaurant? Many people will say they don’t want to give up life’s little luxuries, but here’s what could happen if you did and saved the money instead.

If you saved $5 a day for a month, you would have $150. With that money you could do the following things:

  • You could buy a new smart phone.
  • You could buy a new bike.
  • You could buy a brand new outfit.
  • You could buy a really expensive pair of shoes.
  • You could pay your friend back.
  • You could buy your books for school.
  • You could have a nice day at the spa.
  • You could purchase birthday gifts for 5 friends or family members.

This could change your life significantly if you, for example, rode a bike every day and got in great shape. It could also barely affect your life if you only got to enjoy your new shoes every now and then. So why not save $5 a day for a little longer?

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If you saved $5 a day for six months, you would have $900. With that money you could do the following things:

  • You could finally repair your car.
  • You could pay for a month of rent.
  • You could buy a plane ticket to New York City for two.
  • You could pay for your gas for 3-5 months in cash.
  • You could get ahead on your electric bill.
  • You could finally start that emergency fund.
  • You could pay off your credit card.

Not bad for just giving up a tall café mocha every day for 6 months, right? You can easily see how $5 a day for six months can change your life. Having an emergency fund just in case could prevent you from going into credit card debt. Paying off your last credit card would make you feel so much freer, knowing you were financially stable. Buying a plane ticket somewhere fun could give you memories for a lifetime. Yet, if you saved for a little bit longer, here’s what could happen:

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If you saved $5 a day for a year, you would have $1,825 dollars. That amount of money could get you the following items.

  • You could go on a really nice weekend vacation.
  • You could finally buy your girlfriend that engagement ring.
  • You could put a down payment on a car.
  • You could donate it and make a difference to a charity of your choice.
  • You could pay for a college class.
  • You could fully fund an emergency account.
  • You could finally see the Leaning Tower of Pisa.
  • You could buy a really nice watch.
  • You could pay for 2-3 months of rent in cash.

All of these scenarios so far have involved spending the money you save right away, but what if you grow it instead? Many people say they don’t have enough money to do this, but here’s what could happen if you only save $5 a day for one year.

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You could take the $1,825 and invest it. Even if you add nothing to it, you could reap significant rewards. A very conservative estimate if your investment earns 4% and is compounded once a year shows that you could have $147,000 after 35 years. All you would have to do is give up life’s little luxuries for 1 year, invest that amount, and theoretically let it sit for 35 years.

With $147,000 to spend, you could not only change your life, but the lives of your family. With that you could do the following:

  • Pay for a modest home in cash.
  • Send all three of your kids to college.
  • Go on a luxury trip around the world with your spouse.
  • Start your own business.
  • Invest even more and make even more.
  • Buy an outrageously expensive car.
  • Quit working for 5-7 years.
  • Pay off all of your consumer and student loan debt and that of your children.

As you can see, the best way to change your life with just $5 a day is to save the money for the long term. Sending your kids to college will definitely change their lives. Quitting work for a little while and seeing the world will give you the experience of a lifetime. Paying off debt or buying a house in cash would be a tremendous personal accomplishment. The truth is, no matter what you do or how long you save it for, saving $5 a day for any length of time can make your life better whether it’s in a small or in a really significant way.

Featured photo credit: Making money concept via Shutterstock

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Catherine Alford

Catherine is the go to personal finance expert for educated, aspirational moms who want to recapture their life passions.

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Last Updated on June 26, 2020

25 Easy Tips on How to Save Money Fast

25 Easy Tips on How to Save Money Fast

“How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

You don’t really need to order in food. You don’t really need to buy expensive perfume.

Building from that, you can work out how your regular expenses can be reduced.

As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

And remember: a budgeted lifestyle does not mean a bad or boring one!

But first, understand what budget you can cut down on daily:

  • Regular expenses for the average adult (can be trimmed but not eliminated):
    • food
    • rent/mortgage
    • cell phone
    • insurance
    • socializing/entertainment
    • transportation
    • hygiene products
    • household bills
  • Irregular expenses for the average adult (can be eliminated or cut down a lot):
    • travel
    • clothing
    • medication (*depends)
    • grooming (hair, nails etc.)
    • gifts

Now, let’s dive right into the 25 ways to save money fast:

Save Money on Food

1. Bring a stock of food to the office/work

Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

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Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

2. Buy the store-brand version

Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

3. Eat cheaper cuts of meat

Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

4. Have group dinners

If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

Save Money in Transport

5. Get a bicycle

Save on gas money and bus/metro fares with this underrated mode of transport.

6. Use public transport and/or don’t get taxis

Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

7. Find the cheapest gas

Regularly check out where the cheapest gas can be bought.

Save Money in General Shopping

8. Shop online

Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

9. Sell your old stuff

Get your unwanted belongings up on eBay ASAP and earn a few dollars.

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Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

10. Bulk buying stores

For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

11. Become a flea market/car boot sale/street market guru

You can find original gifts and develop good negotiation skills at these places.

12. Generic brand medication

More often than not, the generic version of paracetamol and other basics work the same as the branded version.

13. Choose deodorant, not perfume

It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

Cut Down on Household Expenses

14. Printing

Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

Expand the margins of what you are printing as often as you can to save on paper.

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15. Minimize SMS and phone calls

A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

16. Shop around for insurance

Most people don’t spend enough time searching for the best insurance deal.

Keep a watchful eye out for deals and new competitors in the market.

17. Try re-negotiating your rent/mortgage

If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

18. Don’t get a TV

Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

19. Pool your internet bill with a neighbour

My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

Save Money in Socializing, Entertainment And Travel

20. Have house parties

Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

21. Open festivals, meetups and events

It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

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22. Volunteer

If you can’t pay for a ticket, volunteer and get to be there anyway.

23. Housesit

There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

Save Money on Hygiene and Beauty

24. DIY beauty

French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

25. Fewer haircuts/volunteer at a trainee hairdresser

If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

Bonus: Effective Money-Saving Tips for Everything

Here’s a summary of what you can generally do to save more money:

  • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
  • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
  • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
  • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
  • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
  • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
  • Stop and think. Do I really need it?

Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

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Featured photo credit: Unsplash via unsplash.com

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