by Kathryn Bergeron June 2, 2016
While $50 might seem like a lot of money, making a few small changes can leave you with that much, or more, at the end of every week. “When you really think about it, saving $50 a week isn’t that much money,” points out Brandon Small, a Minneapolis-based Charted Financial Analyst and Certified Public Accountant. “If you do four cash transactions a day, you probably get a good chunk of that back in coins every week.”
Try Eliminating Unnecessary Monthly Expenses
“Regardless of how much money my clients make, there’s a common thread among many of them. They don’t realize where their money is going,” explains Small. “If you get rid of a recurring expense, you’ve essentially locked in those savings forever.” When savings becomes a goal, many people are able to look at their monthly bills in a new light. Some choose to make do with fewer TV channels, potentially saving $30 a month, or $7.50 a week. If you can trade your $40 membership at a full-service gym for a $19 membership at a good enough gym, or eliminate your gym membership altogether, you’ll save $5 to $10 a week. Brandon Small adds that “smartphone service is another opportunity to save, especially if you’re around Wi-Fi connections all day.” While you’re cutting your cell phone bill, consider dropping your landline to save even more money.
Ways to Pay Down Debt
While it’s usually a good idea to save, there is one instance where you come out ahead by spending your money: when you have high interest rate credit card debt. “Why would you put money in savings at 1 or 2 percent, at best, when you could use the same money to pay off a credit card at 15 or 20 percent?” asks Small. Using your extra money to pay down your debt will make it easier for you to save in the long run, since you can take what you’re paying on the debt and on the interest and put it right into savings. Since small credit card debts frequently have relatively high monthly payments, even paying off small debts can free up an additional $5 to $10 a week to get you to your goal.
Make Daily Choices
If trimming expenses and paying down debt can’t get you to your $50 goal, you may have to change some of your behaviors. Instead of going to the movies twice a month, go once. You can turn an evening that costs $40 with popcorn, drinks and candy into a $5 night for a DVD rental and bag of microwave popcorn. Eliminating two smoothies or blended iced coffee drinks a week can save you $10 per week, and eating at home one more time per week can save a few dollars — or more, depending on how much you usually spend.
Pay With Fives
Finally, if you really want to accelerate your savings, pay for everything you buy in increments of five dollars. For example, if you buy a 89 cent pack of gum, use a $5 bill, and if you buy a shirt for $16.99, use a $20 bill. When you get your change back, save it. “When you add a lot of small numbers up, they turn into big numbers very quickly,” points out Small. If you average $2.50 in change twice a day, you’ll have $35 left over at the end of the week and be well on your way to your $50 goal. On the other hand, if using cash stops you from spending money that you don’t really need to spend, save all of the cash and you’ll come out even further ahead.
What $50 Does
“What do you think $50 a week is worth?” asks Mr. Small. “It’s $2,600 a year, but when you start adding in interest, it grows very quickly.” For example, the Consumer Federation of America calculated that if you saved $50 per week every week for 40 years, you’d have $332,020 even if you invested it at a conservative rate of only 5 percent per year. This means that you’d end up with more than three times what you actually put in. Furthermore, if you just kept the $332,000 invested at 5 percent, it’d throw off $16,601 in interest every year without you doing anything.
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FAQs
If you average $2.50 in change twice a day, you'll have $35 left over at the end of the week and be well on your way to your $50 goal. On the other hand, if using cash stops you from spending money that you don't really need to spend, save all of the cash and you'll come out even further ahead.
How much money will I have if I save $50 a week? ›
If you invest $50 per week, that's the equivalent of $200 per month, or approximately $2,400 per year. Over a 30-year period, that would result in more than $72,000 in savings. It's a good chunk of savings, but it isn't a life-changing amount. This is where the power of compounding comes into play.
How much will I have if I save $100 a week for a year? ›
There are 52 weeks in a year. That means that, after a full year of saving, $100 per week adds up to $5,200.
What is the 50 30 20 rule? ›
Do not subtract other amounts that may be withheld or automatically deducted, like health insurance or retirement contributions. Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.
What is a good amount to save each week? ›
At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.
Can I survive off of $50 a week? ›
Planning out your meals so you use all of the ingredients, both raw and cooked, plus pantry staples and frozen goods means you can make a week's worth of dinners for around $50 in groceries.
Is saving $20 a week good? ›
Small amounts will add up over time and compounding interest will help your money grow. $20 per week may not seem like much, but it's more than $1,000 per year. Saving this much year after year can make a substantial difference as it can help keep your financial goal on your mind and keep you motivated.
What if I save $300 a month for 5 years? ›
What if you started working with an investment pro today and found ways to add an extra $300 per month into your retirement accounts? If you did that for just five years, you could add over $368,000 to your nest egg in 30 years.
Is saving $$200 a month good? ›
If you were to invest $200 per month over the course of the next 30 years, that would equate to a total investment of $72,000. That's significant, but it's through the effects of compounding that would get your portfolio to a more than $1 million valuation.
How to save $5000 in 3 months? ›
How to Save $5,000 in 3 Months
- Track Your Expenses. The first step to saving money is understanding where your money is going. ...
- Create a Budget. ...
- Reduce Unnecessary Spending. ...
- Increase Your Income. ...
- Automate Your Savings. ...
- Save on Utilities and Subscriptions.
Spending around 30% of your income on rent is the golden rule when you're trying to figure out how much you can afford to pay. Spending 30% of your income on rent can help you reach a healthy balance between comfort and affordability. On a median income, 30% should get you an apartment you can truly call home.
Which strategy will help you save the most money? ›
The 5 Most Effective Strategies To Save Money For The Future
- Set Your Goals Early On. Setting a financial goal early on will boost you to stick to your savings plan. ...
- Understand Your Cash Flows. ...
- Open a Savings Account. ...
- Rethink Debit Cards. ...
- Monitoring Your Spending. ...
- Revise Your Emergency Fund.
Zero-based budgeting is a way to plan how you use each dollar you earn. This budgeting style may give you greater insight into your finances and provides you the flexibility to customize your budget each month. Zero-based budgets require advance planning, particularly for those with inconsistent incomes.
How much money should you have by age? ›
Fast answer: Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on. See chart below. The sooner you start saving for retirement, the longer you have to take advantage of the power of compound interest.
What if you save $50 a week? ›
If you invest $50 per week, that's the equivalent of $200 per month, or approximately $2,400 per year. Over a 30-year period, that would result in more than $72,000 in savings. It's a good chunk of savings, but it isn't a life-changing amount. This is where the power of compounding comes into play.
Is saving $600 a month good? ›
But when it comes to what they need to be saving, it depends. So, if we're starting with a 30-year-old, they should be probably saving close to $580, $600, at least, a month. And that's if they're going to earn a high rate of return. So it depends on how aggressive and risky that they're looking to be.
Is saving 50 dollars a week good? ›
Investing $50 a week, which translates to approximately $200 a month, is an excellent way to build your savings without putting a significant strain on your budget. Over a year, you'll have invested $2,600, and this consistency is key.
How much is 50 a week for a year? ›
$50 weekly is how much per year? If you make $50 per week, your Yearly salary would be $2,600.
How much is $50 a week in a month? ›
How much is your salary? $50 weekly is how much per month? If you make $50 per week, your Monthly salary would be $217. 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.
How much is $50 dollars a day for a week? ›
If you make $50 per day, your Weekly salary would be $250.
