$3.00/Day to Save $34K in Interest
What if every day you put $3.00 in a savings account, and that savings account returned 5% per year, how much would you have at the end of 30 years? Roughly $65,000 (gain of approximately $33,000 including taxes), all that $ for less than the cost of a Starbucks each day. So why doesn’t everyone do this?
Most people try to be savers but find it very difficult in our consumer driven society. The need to have the next best thing or enjoy experiences with our friends has us constantly dipping into our accessible savings. It’s easy to do, a little here, a little there and before you know it, what you put away for the month is gone.
Current Rates of Return
You’d be hard pressed to find a guaranteed rate of return over 1% in the current investment climate. Even if you managed to save $3.00 every day and never touch it, invested at 1% you would see an ending balance of roughly $34,000 (a gain of approximately $4,900). You could invest in the stock market, which has been volatile the last few years. This may yield a greater than 5% return, but is not guaranteed. Many people are already accepting market risk through their 401K for a large part of their retirement.
How Can I Save $34K?
I’m sorry to say the example above with the savings account that pays 5% doesn’t exist. So what can you do to see those kind of returns?
Check out this example…
Mortgage Principal – $200,000
Term – 30 Years
Interest Rate – 5%
How much do you think you pay in interest over the life of this Mortgage?…..$186,511
Crazy right? That’s almost double the amount you borrowed.
The largest waste of your money is DEBT.
What would happen if you applied just $3.00 a day to that same mortgage? How much do you think you would save?….$34,700 !!
For less than a cup of coffee each day, you save over $34k in interest. You can do that! And guess what.. You pay off your mortgage 5 years earlier. This little trick works even better for high interest debt such as credit cards, auto & student loans.
Snowball is an iOS App similar to Bank of America’s Keep the Change program, but Snowball applies your spare change to your high interest debt. Whether it’s a credit card, auto loan or a mortgage, Snowball can help you pay it off a little bit at a time and save $1000s in the process.
Connect your accounts and Snowball collects spare change from your everyday transactions and applies it to your debt. You can pay off anything with Snowball… Credit cards, student loans, auto loans or even your mortgage. Snowball works with over 3,000 creditors.
The built built in savings calculator will estimate your savings and Snowball will track your progress as you accelerate the pay off of your debt. And because such a small amount is withdrawn each time (a cup of coffee), you won’t need to make any major adjustments to your monthly budget.