Saving $5 a Day Can Help You Become a Millionaire

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Saving $5 a day for a year adds up to $1,825, and for some, that's a lot of money. Just think of how many things you can buy or what bills you can cover with that money. Does going out of your way to save $5 a day sound like a good idea?

You don't have to be a personal finance guru to understand that you'll be much better off down the road if you save money every day. It won't make you wealthy, however, there are definitely some great benefits if you save $5 a day for a year and longer.

In this article, we'll go over how to save $5 a day, what happens when you invest $5 a day, how to make $5 a day, and if saving $5 a day even matters.

Let's jump right in.

Why Saving $5 a Day Matters

Saving $5 a day might not seem like much, but saving any amount of money is important, as it gets you into good habits. You could argue that there are bigger fish to fry, such as paying off debt or increasing your income.

Those are important things to do as well. However, if saving $5 a day means cutting out something small like that morning snack at the gas station, or bringing lunch to work instead of buying it, then you'd be surprised at how much you can save given time.

Saving $5 a day won't make you rich. Instead, what it will teach you are good savings habits. Those that cut out their $5 morning coffee and make the coffee themselves start saving money in other areas of their life.

The people who are frugal about their morning coffee are the same people who are saving money by bringing lunch to work, not having expensive habits on the weekends, and in general, being smarter with their money.

So, while saving $5 a day itself might not make you wealthy, the habit you form could lead to great wealth over your life.

In fact, if you were to invest $5 a day from the time you were 18 to the time you were 60 and assumed you averaged an 8% ROI, you would have just over $630,000, having only invested $76,650 of your own money. That's the power of compound interest.

Aside from developing good saving habits, putting $5 a day aside will help you create an emergency fund, start a retirement account, help you get out of debt faster, allow you to enjoy more special occasions, and help you save up for major purchases.

When combining all of these factors, saving $5 a day will help you reach financial freedom down the road.

What You Can Do With $5 a Day

If you're saving $5 a day for a single month, you would have $150. Here are multiple great things you can do with $150:

• Buy a new outfit
• Upgrade your footwear
• Pick up a bike
• Pay down credit card debt
• Date night with your spouse or significant other
• Get a week's worth of groceries without dipping into your grocery budget
• Pay some or all of your electric bill. Here's some great ways to lower your electric bill.
• Invest it in many ways

If you save $5 a day for a year, you would have $1,825. Here are some things you can do with just shy of $2,000:

• Get a “free” month of rent or mortgage
• Take a vacation
• Buy a new computer
• Pay down student loans
• Fund and start a side hustle
• Invest in an IRA
• Make more money with your money
• Pay your family's mobile phone bill for the entire year

How to Build Wealth With Just $5 a Day

If you're not paying down debt, you could invest your $5 a day. Let's look at some examples where your money might be better off than simply in your bank account.

Let's examine what happens if you were to invest $5 a day for 40 years into two types of accounts.

The first strategy is to invest all your money in a high-yield online savings account with an interest rate of 0.5% APY. In the second example, you invest in an index fund, which earns an average of 8% per year.

Below is a table that shows what your total balance would be as the years went on.

Year	Savings (0.5%)	Index Fund (8%)
1	$1,829.58	$1,900.19
2	$3,668.34	$3,958.61
3	$5,516.31	$6,188.46
4	$7,373.54	$8.604.01
5	$9,240.08	$11,220.72
10	$18,714.08	$27,959.33
20	$38,387.63	$90,178.51
30	$59,069.87	$228,637.69
40	$80,812.50	$536,757.27

As you can see, when you invest just $5 in the stock market for 40 years, your money grows astronomically faster, especially as the years go on.

This is how compound interest works in your favor and how you can build wealth with just $5 a day and is a reasonable way to build wealth when you have nothing currently.

Can you imagine how much wealth you would build if you invested more than $5 a day?

How to Save $5 a Day

There are many different ways that you can save $5 a day. Whether you specifically save $5 each day or you average that per day over the course of a week or a month doesn't matter.

The idea is that you're constantly saving small amounts of money so that you build good habits and have more money for things you need, such as paying off debt or investing for your future.

1. Make Your Own Breakfast

A lot of people get breakfast at a restaurant or on the go, such as at a MiniMart. This can add up to $3-$5 every day. Instead, spend a few extra minutes at home and make something.

Oatmeal takes a few minutes, as does a bowl of cold cereal. Have some spare time? Make eggs.

2. Cut Back On Soft Drinks and Energy Drinks

Soda can cost $2 per bottle, and energy drinks can cost more. Not buying these have the added benefit that it's good for your health to drink fewer soft drinks and energy drinks. If you buy three soft drinks per day, you're saving $6 a day simply by cutting out soda.

3. Lower Your Living Expenses

Do you have subscriptions that you don't use? Is your cable bill too high? Cancel subscriptions that you no longer use. Check out the app Trim, which will negotiate your bills for you.

The average user saves $685 over their first year. This comes out to almost $2 per day.

Go through the process of lowering your monthly living expenses to continue to save money each day.

4. Pay Down High Interest Credit Cards

The higher your balance on a credit card, the more interest you'll pay each month. While it's best not to carry a balance, life happens.

By paying down a credit card, you'll have less expense coming from interest, and the monthly payment will be lower as your balance approaches zero.

5. Eat Out Less to Save $35 Per Week

The average person spends over $3,000 eating out every year. You and your significant other may spend over $35 a week on a single meal out when you include food, drink, tax, and tip. Eating out one less time per week will save you an average of $5 a day.

When you eat out less, you'll need to shop smart for groceries. Use an app like Ibotta when you go grocery shopping. This app gives coupons and discounts at grocery stores all over the country.

6. Shop Less Often

Take a break from shopping on sites like Amazon. It's easy to impulse buy and overspend when you're surfing online stores, and one of the best ways to save money is to simply not spend it. Next time you see something that catches your eye, ask yourself, do you really need it or simply want it?

Then, sleep on it for at least one night. Most things that we won't satisfy our desires for only a short period and then what we bought collects dust, thus wasting the money we spent. Check out this article on how to curb impulse spending.

7. Find Out if You Can Work Remote

Some office jobs may be open to allowing you to work remotely one or more days a week. Each day that you work remotely is one less day you have to drive your car.

This saves on gas and car maintenance and could lead to saving $5 a day or more when you factor in other things you're not spending money on.

8. Set up Automatic Transfers

Perhaps one of the easiest ways to save $5 a day is to transfer it automatically from your checking account to your savings account every single day. This simple action creates an automated savings plan that will have a big impact on your bank account over the long term.

How to Make $5 a Day

How can you get $5 right now? This might be easier than you might think. A simple side hustle could easily add up to $5 a day, or $150 per month.

It shouldn't be too hard to make $5 or more per day with a simple side hustle. That extra $150 per month could go towards your credit card debt or student loan payments.

It could also go to your emergency fund, which is best fit in a high interest savings account, such as a CIT Bank online savings account.

CIT Bank offers high-yield savings, money market, CDs, and custodial accounts designed to help you maximize your personal finances.

View your rates here.

If you want to earn some extra cash, one option is to take surveys on sites like Swagbucks, Survey Junkie, or InboxDollars.

It will take two to three hours to earn $5 on most survey sites, so it may make more sense to find something that's a better use of your time, especially if you want to make more than $5.

Here are some other things you can do to make $5 a day:

• Test websites at UserTesting.com
• Hire yourself out on Fiverr
• Write articles on Textbroker
• Do transcription work on Rev

What is the Save $5 a Day Challenge?

The save $5 a day challenge when you make it a point to save $5 a day, every day, for a year. You essentially pay yourself daily by creating a $5 a day savings plan. It's a simple way to create good savings habits.

This challenge isn't just about saving $5 a day; it's more about becoming self-aware. Paying attention to how much you spend each day and identifying areas where savings can happen will help in your quest to make $5 a day.

Once you are aware of how much money you have coming in and going out, it is easier to adjust your lifestyle. You can then make informed decisions about how you spend money on things like eating out or entertainment, which will help you save $5 a day and build wealth.

Saving $5 a day might not seem like much, however, when you put it all together at the end of each month and year, that's a lot of money.

Saving $5 a day for five years is equivalent to saving $11,250, and that's not counting any interest or investment value you gain over that time. 

Wrapping It Up

As you can see, saving an extra $5 a day goes a long way and has the potential to improve your financial situation over time. Aside from having more money, you'll also increase your savings rate, which means you'll have saved more of your income each month.

What benefits have you found from saving money each day?