It is pleasantly surprising how saving what initially appears like a trivial amount of money quickly adds up to a fairly significant size. Sometimes, it is simply a matter of taking the first step and letting inertia take over from there. And when money is taken off a paycheck even before it reaches the chequing account, it is not even missed. Time and compounding will do the rest. The following post was originally published here on 07/03/2006.
Many personal finance experts urge us to cut out our daily lattes or muffins or lunching out and save the difference. The $25 or $50 saved every week seems such a small, piddling amount, that it can’t possibly make a difference, right? It actually does and I have a personal story to illustrate the power of saving small amounts.
Recently, my wife was looking at her stock purchase plan account and was pleasantly surprised to find that she had just over $10,000 in the account. It all started with her contributing a small percentage of her salary to participate in the program. Her employer matches her contribution dollar for dollar and every two weeks, the combined amount is used to purchase shares.
My wife’s contributions to the plan work out to just over $25 per week. In a little over three years of saving a little bit of money every other week (and her employer’s stock has practically gone nowhere in that time period), she has accumulated a tidy sum. Granted, $10K is not a million dollars, but with a little bit of growth and continued addition to the savings, it can grow into a nice big chunk of cash. So gather together a few toonies every day and start saving, for a journey of a thousand miles begins but with a single step.