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How Much Does $20 A Week Amount To Over Time?

I know a lot of people think that they cannot afford to save money because they have too many bills or don’t make enough money every week to actually put anything aside. But for those of you in this situation, I wanted to point out how even $20 a week can add up over a long time. You may not think that $20 is a lot of money and that you have better things to spend it on right now. But $20 is a very attainable goal that you should set for yourself even if you are strapped for cash. The figures below figure you are only putting the $20 into a Money Market Account (Like ING Direct), earning 4.3% interest. Sure, there are ways to make more money on your money, but we are only talking about a safe, automatic investing program. People without a lot of money are always cautious of investing in anything risky, and money market accounts are probably the safest way to invest.

Starting with $0 in the account and depositing $20 per week will help you pile up:

$1,062 in one year.

$2,171 in two years.

$3,328 in three years.

$5,798 in five years. (And enough to pay cash for a decent used car…no car payments!)

$12,988 in ten years.

$21,903 in fifteen years.

$32,955 in twenty years.

$63,650 in thirty years.

$110,835 in forty years.

$183,371 in fifty years.

Did you notice how the money starts to almost double every ten years even though you are still only investing $20? That’s the power of compound interest! I realize it is difficult to think this far out when you are struggling today. But with just a little effort and investing on the safe side, you can still put away a hefty chunk of change over the years. Just think…you can help your young children pay for college, you can pay cash for a new car somewhere down the line, you can fix up your house, you can start putting more away for retirement. Starting at only $20 now, you might be able to do $50 or more every week when you get a little older and start making more money. The earlier you start, even if it is only with $20, the better off you will be. Try to find that $20 every week to put into savings; it will be well worth it in the future!

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Comments (16)

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  1. That’s more or less how I started with ING Direct. Those few dollars in the beginning that didn’t amount to much interest have now grown and I love seeing it grow every month. A similar strategy can be used in a 401K program at work. A person can start with 1% of their paycheck if they don’t think they can afford to put more. I think most will realize that the 1% doesn’t really take a lot out of their pockets but can still add up especially with a company match.

  2. m says:

    I love these types of posts. They are so motivating for someone like me without a ton of money to work with at the moment! The actual numbers make a great difference in showing how worthwhile even smaller amounts are (not that $20/mo. is small for many people, but the principle applies to any amount–time and interest make a major difference and saving is worthwhile no matter how little you can afford to put away.)

    Thanks a lot for this post!

  3. I wish the time value of money was ingrained in the minds of children from day one. How come basic finance and business skills aren’t taught every year along with the other subjects?

  4. PinoyTech says:

    The problem is that most individuals don’t really think much of 20$.

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  10. Rob says:

    Not to discourage savings, but…

    After taxes and inflation, 20 bucks a week will be worth a little over 26 grand.

    Rough estimate using:
    http://cgi.money.cnn.com/tools/savingscalc/savingscalc.html

    Play around with it.

    Problem is that 20 x 52 x 50 = 52,000.

    You’re losing money. Having an emergency account is great, but for long term investing consider something a little more risky. Index funds, etc.

  11. david says:

    The point was to encourage people to think long term. I am not losing any money, but this is for people who don’t save anything. Thanks for the comment.

  12. Rob says:

    Losing might be a strong word, but after taxes you’ll be unlikely to keep up with inflation. I don’t see the compound interest from an ING or similar account as being sufficient to motivate people to save. It’s important, but more to save you from credit cards and other unwise forms of borrowing in the future.

    Also, will ING really have interest rates over 4% for the next 50 years? This is a sincere question. I don’t know.

    Investing 20 bucks a week in a well diversified but not too concervative IRA for 50 years could be the difference between taking a taxi to you doctor’s appointments or having to ride the bus when you retire.

    That image could motivate….

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  14. The first big savings for the target audience comes from breaking even on the investment (after taxes/inflation) and then not financing a car at 10%. They can tweak their returns once the good habit takes root.

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