Do you have a daily indulgence that seems so trivial in cost that you see no harm in continuing to … well, indulge in it? Perhaps a Starbucks habit, eating lunch out, a pack of cigarettes, a candy bar, buying a daily newspaper from a newstand, etc.? Or not even a daily habit but a frequent one?

Consider this. Say you have a latte from Starbucks everyday, which only costs $3.00. But think about that $3.00 a day put into a savings account for x number of years, say until retirement. Ever wonder how much that $3.00 a day can be worth?

I used the Future Value Calculator below with the following figures: $0 initial investment, $90 monthly addition ($3 x 30 days), and the savings account interest rates from my current credit union savings account: .80% for balances under $999.99.

Firstly, keep these points in mind:

• This calculation is based on a regular credit union savings account interest rate and there are other high-interest savings accounts with higher APYs.
• There are savings accounts for which interest rates increase with the balance (but I only used the original .80% rate throughout because it would’ve taken me a really long time to figure it with changing rates and balances.)
• In this calculation, the interest is compounded monthly, but there are accounts that compound interest daily (such as my credit union).

So, in actuality the total savings and interest would be higher than below, but I think these figures would sufficiently illustrate my point.

Not bad for $3.00 a day, eh? And this was with a flat interest rate of .80% for the entire term. Put (or leave) those $3.00 a day in a high-yield savings account and it could become a down payment on a house, a car, or a backup nest egg in addition to your retirement account. After all, you may be fortunate enough to live another 30-40 years after retirement, and it wouldn’t do to run out of money when you’re 95.

I’m not saying that you should completely deprive of all pleasures in life. An occasional treat is fine and can contribute to the non-monetary aspect of the value of life. But just remember the next time you’re about to throw money away on a transient purchase (a item of no lasting value), the more you save, the more you’ll have — the original saved amount plus the interest.

Feel free to try the savings calculator below to find out how much you are saving by not eating out, getting rid of cable, staying in a few nights a month instead of going out, etc. Remember, this calculator only uses a flat interest rate, so your savings in real life may be more if you put your funds in a high-yield savings account.

Have fun! (At least I always do when I’m counting how much money I’m saving.)

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