How Saving $50 Per Week Can Transform Your Financial Future
In the world of personal finance, there’s a common misconception that significant wealth requires large initial investments. However, the truth lies in the consistent action of putting money aside, regardless of the amount. Because it’s not merely the amount you save, but the action of starting to put money aside that sets the stage for your financial future.
Almost 2 years ago, I embarked on an experiment that demonstrates this principle. I made a conscious decision to allocate $50 from my weekly earnings to invest in the market. Every Wednesday, like clockwork, $50 found its way into my Vanguard account, a modest yet consistent contribution amounting to approximately $2,600 annually. These funds were directed into Vanguard’s Total Stock Market Index Funds (VTSAX). However, to get started I had to invest $3,000 initially to open the account. Historically VTSAX has had the following returns as of 2/29/2024:
The notion of saving $50 per week might seem inconsequential, but as it turns out it can have quite a significant impact on your financial future. Let’s delve into the impact of consistently saving just $50 per week and how it can transform your (and my) financial future.
Starting Small, Dreaming Big
It all began with a simple decision: to allocate $50 from my weekly budget towards savings. At first glance, it did not seem like much—perhaps just enough for a dinner out. But therein lies the beauty: it’s a manageable amount that doesn’t require drastic lifestyle changes yet sets the stage for profound future financial transformation.
Let’s look at the results of this disciplined approach over the past 2 years: with a total investment of $9,740, my portfolio’s ending balance stands at $12,367.14, translating to a gain of $2,627.14. I know, it’s not earth-shattering, perhaps, but a testament to the power of starting early and remaining steadfast in one’s investment strategy. That’s a gain of an additional year of weekly $50 contributions or a side hustle that made me $2,627.14 in 2 years. Not bad. But as you can see, if you do the math, there are times I was able to add a little bit over $50 for that week. According to the graph provided by Vanguard, the figures below represent my investment gains and rate of return as of February 29, 2024. I understand that these returns may fluctuate over time, as I’ve observed them vary in the past.
The Power of Consistency
Week after week, as you can see that seemingly insignificant sum adds up, quietly building a foundation for a better financial future. Whether you’re saving for a specific goal—a down payment on a house, a dream vacation, or retirement—or simply building an emergency fund, the key is to stay consistent. But now imagine, doing this for 30 years. Yes, that’s right 30 years.
Here’s a breakdown of those results at five-year intervals assuming a 10% annual return and investing $50 each week (but remember to get started I had to first invest $3,000 to open a VTSAX account with Vanguard). To figure out your own calculations, you can use this Compound Savings Calculator.
TOTAL YEARS | ENDING BALANCE (10% Return) |
0 – Total Initial Investment $3,000 |
|
5 – Total Invested $16,000 | $20,704 |
10 – Total Invested $29,000 | $49,218 |
15 – Total Invested $42,000 | $95,140 |
20 – Total Invested $55,000 | $169,097 |
25 – Total Invested $68,000 | $288,206 |
30 – Total Invested $81,000 | $480,032 |
Looking ahead three decades, it’s remarkable how a $50 per week investment can transform into something truly extraordinary. After reviewing the chart provided, I’ve developed an even greater appreciation for including my $50 weekly investment in my budget. Now, let’s delve into the numbers a little bit more.
The Stock Market’s long-term average return of around 10% per year provides a comforting assurance for my $50 experiment. Despite the market’s inevitable ups and downs, making the investment automatic keeps emotions checked and the unwavering consistency in my investments promises generous returns. Please note, that the market will go up and down during this investment journey.
Per the table above, as the initial five years pass, my investment of $16,000 has the potential to yield a return of $4,704 at a 10% rate—an encouraging foundation for what’s to come.
With each passing year, my confidence in the growth potential of my portfolio only strengthens. By the 15th year, having invested a total of $42,000, the fruits of compound growth become increasingly evident, with my investments swelling by $53,140 to reach a total of $95,140. WOW!!!!! I like that number!!!!
But it’s when I reach year 30 that a smile inevitably graces my face and I jump with joy. With a cumulative investment of $81,000, the returns are nothing short of astounding. Through the steadfast commitment to consistent investing, that humble $50 per week ballons into an impressive $480,032—a staggering gain of $399,032. That’s $399,032 that I didn’t have to trade hours of my life for—it’s money that worked for me! And that’s time that wasn’t taken away from my family and loved ones. How many working hours would it take you to make $399,032?
Beyond the financial gains, setting aside $50 per week also lays the groundwork for a robust financial safety net—a shield against unexpected expenses, job insecurity, or economic downturns. This cushion offers peace of mind and empowers me to navigate life’s uncertainties with more confidence. Do you think it would do the same for you?
Every dollar saved is an investment in the future. Whether it’s earmarked for retirement, further education, or pursuing lifelong aspirations, the money set aside today has the potential to unlock boundless opportunities tomorrow. It’s never too late to start saving, let your money work for you.
So, the next time you are tempted by a $50 purchase, remember you have the choice to spend it or invest it. That consistent, disciplined investment—no matter how small—has the power to yield substantial growth over time.
$50 Weekly Savings Challenge: Track Your Progress and Watch Your Wealth Grow!
Take the first step today and join us on the $50 Weekly Savings Challenge. By committing to save $50 each week, you’re not just setting aside money—you’re investing in your financial future. Let’s turn those spending habits into opportunities for long-term wealth accumulation. Are you ready to start building your financial freedom, one week at a time?
We’ve created a simple form to help you save $2,600—one sweet step at a time! Print out this form and get ready to see your savings blossom.
Here’s how it works: Each time you invest, cross out one of the honeycombs. If you manage to save a little extra in any month, jot it down in the Bonus section. By the end of the year, all the honeycombs should be crossed out, and you can tally up any Bonus amounts to see your grand total.
Whether you’re just starting your financial journey or well on your way, remember: consistency is key. Set up that automatic deposit today, stick to your plan, and watch your wealth multiply over the years. Your future self will thank you—and reap the rewards!
Download the free $50 Per Week Savings Challenge PDF file!
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Note: We are not financial advisors. The content on this website are for educational purposes only and merely cite our own personal opinions. The 10% return is not guaranteed, and there will be years the market goes up and down.