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Small Change Adds Up Over Time

After high school I worked at a local coffee shop in my small town where I earned tips. Mostly, people would leave the change from their coffee. We had paper cups sitting on the counter that we wrote”tips” on in sharpie and people would leave us a quarter or fifty cents. Getting a dollar in the cup was a big deal.

It was during this time that I really learned the power of small actions over a long period of time. I worked with one other counter girl in six hour shifts. We waited on 200 to 300 hundred people during our 6 hours and would walk away with about $30 in cash, each. (We also made a regular wage, not a waitress wage.) I worked 5 days a week so I was making $150 a week in change. That’s $600 a month or $7,800 a year. I was making almost $8,000 a year in quarters!

Every day I would bring home my tips and put $6 aside. I had this little wooden box in my kitchen and I would just drop $6 into it everyday. After a year I had over $1,500 in that box. Painless savings. I never counted on receiving a certain amount in tips so $6 less wasn’t hurting me.

What if we applied that lesson to today. I don’t get tips anymore but that doesn’t mean the same lessons don’t apply. I could put aside a dollar a day. What if I did? What if YOU did? Do you ever say “Oh, it’s only a dollar.” Thinking what difference could it possibly make? What if every day you took one dollar out of your wallet and put it in the cookie jar? How much would you have?

Well, obviously, you’d have about 30 per month. But let’s say that at the end of every month you sent that money off to your Roth IRA. Now were talkin’! If you did that for 30 years and earned 8% a year you would have $47,000. If you put two dollars per day in the cookie jar you could have $95,000. Two bucks! Who cares about two bucks, right?

I’m going to try this out. I hope you join me. I wish it was the beginning of the year but that’s ok. We can’t wait til the perfect time to begin. Today is the day. And it just so happens that today is my birthday so that will have to be enough of a fresh start. Starting today I’m going to take $1 out of my wallet and put it into my Roth IRA. I’ll start with $1 and then bump it up to two at some point in the future. Baby steps.

I just got $47,000 richer. Did you?

7 thoughts on “Small Change Adds Up Over Time”

  1. Learning how to save is very important! There are a lot of lessons that come from saving, one of which is not going into debt to get something, delaying gratification and setting priorities. All important life lessons.

  2. Happy Birthday Ashley.
    Interestingly, we are in the process of implementing an allowance plan for our three children. We’re thinking that $5 per week is reasonable, but we would like them to save $1 from every pay day. We’re using it as a financial learning opportunity. I think it will add up very quickly, and a little interest will surely make their eyes bulge. The kids and I are equally excited.

  3. @Hunter: Thanks! We give our kids an allowance, it works out to be about 50 cents per day if they do their chores. My son has over $200 saved up! He’s 5. It really does add up if you don’t spend it.

    @Krantcents: yes delayed gratification has been put aside in our society today. But it’s the key to success!

    @Justin: We save our change too. I think I’m going to write a post just about that. We always spend it though when we get a substantial amount saved up. Probably should just put in our IRAs.

  4. I know this is a little off topic, but I’ve started taking out $25 a month to fund my Roth IRA. I know it’s a little larger, but I would still consider it small in the grand scheme of finances.

    I think in either my example or you change one, it’s important to just get started now. It’s proof that almost any amount makes a difference, so don’t delay and just get to it.

  5. @Hunter:
    I read this article a few weeks ago. I totally don’t have kids yet, but I wish my parents would have known these things and taught me better money management.

    @Ashley, I just found your blog and I’m loving it so far. Keep up the good work and I’m going to work on implementing the $1/day rule at my house. 🙂

  6. @Hunter
    Of course now that I posted I just saw another amazing thing you might want to look over in regards to your kids. Good luck!

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