According to a survey by The Motley Fool Ascent, the typical American household has $1,200 in savings. Further, the Federal Reserve reports that only 34% of Americans feel as though their retirement savings are on track. Each of those numbers represents a whole lot of potential anxiety. We repeat these statistics not to worry you, but to offer a word of encouragement.

If your finances are a bit frayed at the moment, you may not feel as though you can’t afford to build savings or plan for retirement, but that may not be true.

Here, we look at what would happen if you could manage to invest only $20 a week — just $2.86 a day.

How much you could earn

Here are the steps we’ve taken to arrive at the figures in the table below.

  • We multiplied your weekly investment by the number of weeks in the year: $20 x 52 = $1,040.
  • We divided your annual contribution by the number of months in the year to come up with a total monthly contribution: $1,040 ÷ 12 = $86.66.

We assume that you will invest the $86.66 in an individual retirement account (IRA) or other brokerage account and earn an average annual return of 7%.

After 5 years, you would have… After 10 years, you would have… After 15 years, you would have… After 20 years, you would have… After 25 years, you would have… After 30 years, you would have…
$5,935 $14,259 $25,933 $42,307 $65,273 $97,484

Data source: Author’s calculations

As time passes and your budget stretches, you can add more to your investments. At first, it may only be $5 or $10 more, and that’s okay. The idea is to keep moving in the right direction. Before you know it, you may be investing more than you imagined you could.

Less than $3 a day

If someone told you that you need to come up with more than $1,000 annually to invest, it could feel overwhelming, especially if you’re living paycheck to paycheck. Fortunately, you can forget about coming up with more than $1,000 and simply focus on finding less than $3 a day.

Here are some ways to make it happen.

  • Start a coin jar: Rather than allowing change to gather at the bottom of your purse or on top of your dresser, practice throwing spare change into a jar at the end of each day. It adds up surprisingly fast.
  • Make some bill changes: If you haven’t checked out area utilities recently, find out if your current utility carriers have any competition in town. If so, there’s a chance you could knock a few dollars a month off your utility bills.
  • Shop around for insurance: You can easily save hundreds of dollars a year by shopping around for new homeowners or auto insurance, especially if you bundle policies. Many insurers have made the process easy by offering online quotes. If you feel bad about leaving your current insurance company, don’t. It’s up to you to look out for your bottom line.
  • Negotiate with creditors: If you’re having a tough time paying your bills each month and fear your credit score has taken a hit, call your creditors to learn if there’s help available. For example, if you’re currently caught in a debt cycle due to high interest rate credit cards, ask if the credit card company will lower your rate as long as you continue to make regular payments.
  • Sell stuff you don’t need: Walk through your home and determine which items you no longer use. Once you know what you can do without, sell them at a garage sale or through an online marketplace.
  • Save a few dollars a week on groceries: Use a price comparison app that shows you nearby stores where you can find the lowest prices on the things you need.
  • Use cash back apps: Once you sign up, you’ll earn money back on the things you buy anyway.
  • Cancel subscription services: If you pay for five streaming services, decide which ones you can easily live without.
  • Use your tax refund throughout the year: If you routinely receive a tax refund, adjust your tax withholding at work so more money reaches your checking account each month.

There are many ways to bring in small amounts of cash. However, it all begins with believing you can do it. Naturally, the earlier you begin to invest, the more time compound interest has to grow your money, but that doesn’t mean you should give up just because you think you’re too old. It’s never too soon — or too late — to contribute to your future.

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