It seems like everyone would have told you this by now, but do you know that most people fail to save even 1 dollar a day? Putting back money is as simple as taking a dollar bill out of your pocket, wallet, or purse every day and stashing it into a small bank or envelope. At the end of the first year you will have $365 saved away ($366 in a leap year).
What makes this system so simple is that you can even skip a day as long as you put in an extra dollar for each day you miss. Never go more than a week without putting money into your savings bank.
Dollar bills are easy to come by. Saving a dollar is not so hard as saving $100, either. Even college students — who quite often find themselves hard up for cash — can usually scrounge together $7 per week.
So while it may sound like trivial advice to talk about ways of saving $365 a year, over 90% of all Americans fail to do even this much. Just putting aside 1 dollar a day gets you into the habit of not spending all your money. So think of the bright side: you will never be completely broke.
But then the obvious question arises of what you should do at the end of the year. Here are three suggestions:
Get 3 $100 Bills Reward yourself for reaching your goal by spending $65 on yourself, but take the remaining $300 and put it into $100 bills that you keep in a safe place. After 2 years of saving $1 a day you will have 6 $100 bills. After 3 years of saving $1 a day you will have 9 $100 bills.
Deposit Your $365 Into a Savings Account You did well to put that money aside. Not put it into a savings account that isn’t tied to a checking account. If you don’t use the money for “overdraft protection” it will grow over time. Every year you can add another $365 to the savings account. This is your long-term small savings plan. In just 5 years you’ll have close to $2000 — and this should be in addition to other savings plans you use.
Invest in Government Securities Despite the annual budget wars in Congress the US Government remains the most secure investment opportunity available and you can invest in government savings plans through Treasury Direct. Minimum investments vary by plan but you can spend as little as $100 on some plans. There are even options for sending your tax refunds directly to your government savings and/or investment accounts. NOTE: You will need a checking or savings account at an American-licensed bank.
Most people ignore the opportunity to save less than $400 a year but over 20 years you’ll end up with between $8000 and $9000 depending on how you invest these “small savings”. Even 20 years from now that won’t be an insubstantial sum. Don’t think of this as too trivial a method for saving money. Rather, think of it as a chance to change your spending and money management habits.