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Every Little Bit Adds Up

March 6th, 2006 ·

Many personal finance experts urge us to cut out our daily lattes or muffins or lunching out and save the difference. The $25 or $50 saved every week seems such a small, piddling amount, that it can’t possibly make a difference, right? It actually does and I have a personal story to illustrate the power of saving small amounts.

Recently, my wife was looking at her stock purchase plan account and was pleasantly surprised to find that she had just over $10,000 in the account. It all started with her contributing a small percentage of her salary to participate in the program. Her employer matches her contribution dollar for dollar and every two weeks, the combined amount is used to purchase shares.

My wife’s contributions to the plan work out to just over $25 per week. In a little over three years of saving a little bit of money every other week (and her employer’s stock has practically gone nowhere in that time period), she has accumulated a tidy sum. Granted, $10K is not a million dollars, but with a little bit of growth and continued addition to the savings, it can grow into a nice big chunk of cash. So gather together a few toonies every day and start saving, for a journey of a thousand miles begins but with a single step.

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7 responses so far ↓

  • 1 Tim // Mar 7, 2006 at 1:32 am

    This is a great example of regular savings contributions adding up to large sums of money. Good work! Keep taking those steps…

  • 2 FMF // Mar 7, 2006 at 12:01 pm

    GREAT post!!!! I’m adding it to my weekly roundup this Friday!

  • 3 Jerry Maguire // Mar 7, 2006 at 6:22 pm

    Every little bit does certainly add up. Someone needs to come up with an automated way to “pay yourself”. Wouldn’t it be great if you were on your way to Starbucks and you could just decide to instead charge $4 that went into your “latte savings” account somewhere…

    What I like even more is when you say that “10k is not a million dollars.” I am trying to make one million out of $20k so I actually think her 10k could be someday!

  • 4 Free Money Finance // Mar 10, 2006 at 4:46 am

    Star Money Articles for the Week of March 6

    Here are interesting posts this week from the MoneyBlogNetwork members and beyond: Five Cent Nickel highlights ten new money scams. Blueprint for Financial Prosperity spotlights Mapgirl’s Fiscal Challenge. Consumerism Commentary thinks the future is …

  • 5 Loki // Mar 30, 2006 at 12:35 pm

    Great post - every little bit does add up. People would be surprised to learn the extra money they would have in the long run with economizing when it comes to filling up with gas when it’s high, paying ATM fees, buying starbucks lattes and heavy tipping at restaurants.

    I think you should do an article/examine the effects of tipping over the long term. Another hot topic of debate as far as I’m concerned.

  • 6 Yve Kosugi // Aug 10, 2006 at 12:53 pm

    I’m all for economizing and saving money, but would like to warn against the danger of becoming “cheap”. There is a difference between frugal and cheap. Everyone knows the “cheap” guy or gal who weasels their way out of paying their fair portion of a restaurant bill. Ever been the one left holding the bag? It’s not nice having to srape together tip to cover other people who feel that they “don’t need to tip” and leave just enough to cover what they consumed. And sometimes not even that. Or worse, the guy who has the steak and lobster, two scotch and a beer and then thinks it’s okay to split the bill even/steven. Nice trick. That’s cheap. If you don’t want to tip (sorry that it’s an ingrained custom here), don’t go out. Try Japan or some other place where it’s not customary.
    Be frugal not cheap! If you decide to go out and spend money, enjoy yourself and do it properly. How can you have a good time if you are agonizing over every penny. We all know what a night out costs. Budget for it if you need to and then enjoy it.

  • 7 Bill // Nov 28, 2006 at 8:10 am

    We also have $25.oo come out of our checking account weekly to go into a savings account and don’t even notice it… not at all! It’s amazing how it adds up. If only I had an employer matching my contributions!

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