by The first step can be the hardest. It takes real effort and determination to begin a new journey. Improving your financial future can begin with making small tweaks and changes. Once you get the momentum going you might discover that “this is fun” and begin to find additional ways to locate investment or savings dollars.
We want you to start with the journey of finding $50 in your monthly budget. For some this will be easier than others. Regardless of where you are at we want you to make a commitment to finding $50.
If you are still with us then terrific let’s get into finding $50! For those of you who have $50 burning a hole you can skip to the bottom of this post where we show you how much that $50 can be worth and give you a couple of places to invest it.
How Often Are You Winning From Lottery Tickets?
We can hear it now…but it’s fun to play the lottery! We get it however the average American spends $223 on lottery tickets according to a study by Time. The odds are highly against you in the lottery. Various studies have the chances around .009%. This means that you are nearly guaranteed to take a loss on the entire $223.
Other studies show that Americans spend as much as $1,000 annually on lottery tickets. That is $83 a month. Depending on which study you want to use that means you might be spending somewhere between $18-$83 monthly on lottery tickets.
We aren’t going to ask you to give up the entire amount, although we think that would be a great idea so let’s say you cut your lottery ticket buying by 50%. You will have somewhere between $9 and $42 saved monthly. For those who will point out that $42 is not half of $83 we realize that we are rounding up so you can have more money in your pocket.
Enjoy Starbucks Maybe Just Consider Reducing How Much You Enjoy It
For some reason many finance folks love to come after Starbucks. You hear such things as avoid Starbucks altogether, give up coffee, or make all your coffee from home. We won’t disagree with the math that says if you do so you will have more in your pocket on a monthly basis however there is a balance.
If you do happen to go to Starbucks daily, where the Barista may know your name and order, and you spend $4 per trip $5 days per week your annual Starbucks bill is $1,040 or $87 a month.
Let’s be completely honest and admit Starbucks can bring great joy and cutting it out entirely seems a bit drastic. With that said we need to find $50 a month so we have to make some sacrifices. Let’s say you agree to cut 2 of your 5 days from Starbucks. By cutting those two days you will have put $416 into your pocket on an annual basis or $35 a month.
Reducing How Much You Spend at Convenience Stores
According to Statista 33% of people who made purchases at a convenience store made a purchase between $5 and $9.99. Let’s use the low number to be conservative and say you visited a store twice a week. On an annual basis you would spend $520 or $43 a month.
You can still buy Red Bull, full disclosure we love having sugar free Red Bull, you just may want to buy them from the grocery store or a warehouse store and get them from home.
Again we aren’t going to make you go cold turkey. Let’s say you cut this in half and you would put an extra $20 a month in your pocket.
How Much Have We Saved Now?
From just these three categories you could save somewhere between $9 – $97 per month depending on which options you selected. In this scenario you still get to go to Starbucks and visit convenience stores. We haven’t made you go cold turkey and we found you three categories where you can quickly locate $50 monthly.
How Much Difference Will $50 Even Make?
There are many who would say “Why bother it’s only $50?”. While $50 will not cause you to retire a millionaire it will, in under 2 years, put you ahead of the 70% of Americans who do not have $1,000 in savings.
In the chart below we demonstrate what would happen if you invested that $50 in savings in a mutual fund earning 8%. While $50 may not seem like much $13K sure is quite a chunk of change.
Mutual Funds That You Can Start with $50 a Month That Mirror the S&P 500
The two funds below have a $0 minimum to get started. This means you can get started month one!
