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.
How much money would you have if you got $1 dollar a day? ›
Your $1 a day could turn into more money than you think
| After… | Your $1 a day will be worth… |
|---|
| 5 years | $2,451.20 |
| 10 years | $6,398.88 |
| 20 years | $22,995.91 |
| 30 years | $66,044.35 |
Jan 16, 2024
But if you put 1 different dollar daily then you will have (365×10)+ (2 or 3) * = 3652,3653 dollars after 10 years.
How much is 1 dollar worth in 20 years? ›
Real growth rates
| One time saving $1 (taxable account) | Every year saving $1 (taxable account) |
|---|
| After # years | Nominal value | Nominal value |
|---|
| 20 | 3.56 | 41.02 |
| 25 | 5.00 | 62.94 |
| 30 | 7.07 | 93.87 |
7 more rowsMatch 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.
What is the 52 week rule? ›
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 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.
How much is $5 dollars a day? ›
If you make $5 per day, your Yearly salary would be $1,300.
How many hours is $100 dollars a day? ›
If you make $100 per day, your hourly salary would be $13.16. 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 38 hours a week. How much tax do I pay if I make $100 per day?
At $10 per second, you'd have over $10,000,000 in less than 12 days. $600 per minute, $36,000 per hour and $864,000 per day.
How to save $1000000 in 10 years? ›
In order to hit your goal of $1 million in 10 years, SmartAsset's savings calculator estimates that you would need to save around $7,900 per month. This is if you're just putting your money into a high-yield savings account with an average annual percentage yield (APY) of 1.10%.
What is the 365 day money challenge? ›
If you want to start smaller, consider the 365-day penny challenge. For this challenge, you'll need a big jar and a whole lot of pennies. You'll put one penny in the jar on Day 1, two pennies on Day 2, and so on until you're putting 365 pennies on the last day of the year.
What happens if you save $100 dollars a month for a year? ›
If you save $100 monthly for an entire year, you'll have $1,200 in the bank. But if you keep your savings in a savings account, you'll also earn interest. After one year of keeping $1,200 in a high-yield savings account with a 4.5% APY, you'll earn $54 in interest.
What if I save $5 dollars a day? ›
By consistently saving $5 a day, you'll have $1,825 in a year. With an average 7% annual return and the magic of compound interest, this amount could grow to over $2,500 in five years and more than $4,600 in a decade. This small daily saving habit can have a big impact on your financial future.
How much if I save $5 dollars a day for 1 year? ›
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.
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.
How much is 1 dollar a day doubled for 30 days? ›
A dollar doubled every day for the 30 days that make up an average month would amount to $1,073,741,824. Yes, that is over a billion!
