Time to read : 3 Minutes
You might have seen the steady stream of Tik Tok videos of so-called financial experts spruiking what the benefits of saving or investing one dollar a day might be, or what happens if you paid one dollar a day extra on your mortgage.
When it comes to advice found online, applying some critical thinking is always recommended.
Not all of those people with a Tik Tok account have their numbers correct.
But … any amount of money that can be saved or invested has the potential to return more money.
What happens if you put $1 a day into your bank account?
The answer to that question depends on interest rates or rates of return.
With no interest involved, putting one dollar a day into a bank account (or a jar at home) will see you end up with $365 in a year.
Multiply that amount by 30 years and you’ll end up with $10,950.
Now let’s factor in an interest rate of just 1%.
If you deposited one dollar a day for 30 years, that $10,950 would earn interest of $1791 over 30 years, giving you a grand total of $12,593.
Bump that interest rate up to 3% and it makes a significant difference.
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.
See, compound interest is your friend.
But with other ways to invest a dollar a day, your results can be even greater.
What happens if you invest $1 a day?
The Standard and Poor's 500 (known as the S&P 500) is a stock market index that tracks the stock performance of 500 of the largest companies listed on the United States stock exchange. It’s one of the world’s most commonly followed equity indices.
The history of the S&P 500 shows an average annualised return of almost 12% since it started decades ago. To simplify, let’s work with a 10% annual return on your one dollar a day over 30 years and you will end up with a whopping interest profit of $57,124 – and a grand total of $67,926.
The bottom line
Doing something with your money can make you more money. Even locking it away in a bank account out of reach at a low interest rate helps you save, because you don’t have it in your pocket to spend on that second cup of coffee you really don’t need.
And, yes, 30 years might seem like a long time away. But you will be 30 years older before you know it. When you eventually get there, life could be sweeter with some extra savings.
Even if you don’t think it will make much difference to your own retirement planning down the track, it can be a cute (and productive) way to set savings aside for your children or grandkids.
Go deeper:
How to save money with your spare change
A Guide to Buying Your First Home
Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
FAQs
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.
How much would I have if I saved $1 a day for a year? ›
If you saved $1 a day for a year, do you know how much money you'd have? Roughly $30,000. This is totally 100% true. Well, 101.7% true.
How much is $1 a day for 10 years? ›
How much money will you have if you save 1 a day? ›
The £1 savings challenge involves putting £1 away each day for a year, saving you £365 in 365 days. Whether you choose to do this daily, weekly or monthly, you could transfer money into your savings account to take the temptation to spend away. You could even set up a standing order to make it super easy.
How many people survive on $1 dollar a day? ›
Surprisingly, over 1.1 billion people (15–20% of the world) live on less than one USD per day.
What if I save $20 dollars a day? ›
Saving $20 a day adds up to about $600 a month or $7,300 each year! Save $7300 for 20 years compounded at 5% and you'll have $253,450—over a quarter of a million dollars! That's quite a result for small, painless changes you can start making right now.
What is the 52 week rule? ›
Start with the base amount you want to save each week, then the rule adds $1 every week for a year. For example, if you start with $5 on week one, you'll save $6 on week two, $7 on week three, and so on for 52 weeks. In a year's time, you would save a total of $1,568.00.
How much is $30 a day for 1 year? ›
$30 daily is how much per year? If you make $30 per day, your Yearly salary would be $7,800. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.
What is the 52 week method? ›
There are no complicated rules to remember. Week 1, you save $1.00. Week 2 you save $2.00, and it continues through the year, adding one more dollar to each week's savings goal. By Week 52, you'll set aside $52.00, which will bring the year's total savings to $1,378!
How to turn 100k into 1 million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years. There are a lot of great S&P 500 index funds.
$25 daily is how much per year? If you make $25 per day, your Yearly salary would be $6,500.
How to turn 200k into 1 million? ›
Here are the five steps you can do:
- Evaluate Your Starting Point. Putting together $200,000 to invest is no small feat. ...
- Estimate Your Risk Tolerance. Your risk tolerance will determine what investments you're comfortable making. ...
- Calculate Necessary Returns. ...
- Allocate Investments Wisely. ...
- Minimize Taxes and Fees.
January starts with a daily savings rate of $1/day. Every subsequent month increases in $1 increments with December ending in $12/day. You can save a dollar a day for 365 days or have more savings per day and establish an even bigger savings pot at the end of the year!
Is it good to save $1 a day? ›
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.
Is saving $300 a month good? ›
Putting aside $300 per month by the age of 39 could set you up to be a millionaire by the time you retire. Investing in exchange-traded funds is a good way to minimize risk and simplify your overall investing strategy.
What is the $1 dollar a day savings plan? ›
What is the #SaveUpChallenge? The #SaveUpChallenge is a simple 30 day challenge designed to get you to save $465. Save $1 on day one and increase your savings by a dollar each day. After 30 days, you'll have saved $465!
How many $1 dollar bills are made a day? ›
The Bureau of Engraving and Printing (BEP) is responsible for producing new paper money for the Federal Reserve System. The BEP prints about 16,650,000 one dollar bills each day, and it costs approximately 4 cents to make a one-dollar bill.
How does the $1 challenge work? ›
Match each week's savings amount with the number of the week in your challenge. In other words, you'll save $1 the first week, $2 the second week, $3 the third week, and so on until you put away $52 in week 52.
How long does it take to save $1 m? ›
$1 Million the Easy Way
Putting aside someone's $40,000 in take-home pay every year—and earning that 10% return as described above—will get you to millionaire status in about 15 years. Halve those savings and you're still only looking at 20 years. It will take more work for sure, but it's a lot faster than 51.
