How much “It’s only $5” really costs you over time

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The everyday purchases we make of five or ten dollars may not seem significant, but when repeated day after day after day they become incredibly costly. Breaking your routine spending habits and cutting back expenses just a little bit over time can lead to large benefits to your future self.

To illustrate this, let’s look at what an average person might spend every day on food during an average working day where they buy a morning coffee, go out to lunch with co-workers, then hit the vending machines for an afternoon snack.

Morning Coffee

Last time I checked, a 20 oz. cup of simple coffee at Starbucks costed $2.35. On the other hand, many offices have free coffee available to workers. Even if your office doesn’t offer free coffee, you can make a 20 oz. cup of coffee at home for around 10 cents.

This chart shows how not spending $2.35 per workday adds up over time. This chart and all of the other charts below assumes you work 5 days per week, 50 weeks per year, and any savings you realize are invested once per month and grow at a rate of 8% per year.

  Coffee from coffee shop Free coffee at office Coffee from home
Cost 2.35 0.10
Daily savings   2.35 2.25
Weekly savings   11.75 11.25
Monthly savings   48.96 46.88
Annual savings   587.50 562.50
Investment balance after 10 years   8,957.04 8,576.51
Investment balance after 20 years   28,838.44 27,613.28
Investment balance after 30 years   72,968.00 69,868.05


The cost of lunch at a restaurant can vary widely of course. At the low end I have heard Clark claim many times that an average lunch will cost him around $3. On the high end, it’s not too hard to get carried away and spend $20 on lunch at a fancier place. For the sake of our calculations, lets say you go to Subway, America’s second biggest restaurant chain, and get the turkey sandwich, chips, and drink, which will cost you about $6.

A much lower cost alternative would be to make your own turkey sandwich at home and bring along some chips you bought from the grocery store. I used’s recipe cost calculator and found that 2 slices of bread, along with a serving of sliced turkey, mayo, cheese, lettuce, and a side of chips will cost you around $1.54.

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If you don’t always have time in the morning to make yourself a sandwich before work, the most popular meal at my office around lunch time is frozen dinners, such as Lean Cuisine. Those aren’t a bad deal either, as you can pick one up for about $2. So let’s see how much you can save by not going out to lunch:

  Sandwich, chips & drink from Subway Sandwich, chips & drink from home Frozen meal
Cost 6.00 1.54 2.00
Daily savings   4.46 4.00
Weekly savings   22.30 20.00
Monthly savings   92.92 83.33
Annual savings   1,115.00 1,000.00
Investment balance after 10 years   16,999.35 15,244.89
Investment balance after 20 years   54,731.78 49,083.07
Investment balance after 30 years   138,484.20 124,191.65

Afternoon Snack

It is not unusual to start to feel just a little hungry late in the afternoon, so we will say that our imaginary average worker hits the vending machines to get a bag of chips and a can of soda for $1.75. That doesn’t seem too expensive, but you could save a little buying chips from the grocery store and bringing them with you every day. A healthier alternative would be to bring a couple ounces of mixed nuts, which happens to be my favorite afternoon snack. Let’s see how the savings add up:

  Chips and drink
from vending machine
Chips from home Mixed nuts
Cost 1.75 0.44 0.75
Daily savings   1.31 1.00
Weekly savings   6.55 5.00
Monthly savings   27.29 20.83
Annual savings   327.50 250.00
Investment balance after 10 years   4,992.60 3,810.77
Investment balance after 20 years   16,074.37 12,269.30
Investment balance after 30 years   40,671.91 31,044.19

Total cost of food from a day of work

Those are some pretty big numbers, so now I am curious what happens when we add all the potential savings from those small purchases together:

  Total daily cost of
coffee, restaurant
meal and snack from vending machine
Total cost of cheaper options
Cost 10.10 1.98
Daily savings   8.12
Weekly savings   40.60
Monthly savings   169.17
Annual savings   2,030.00
Investment balance after 10 years   30,948.99
Investment balance after 20 years   99,644.59
Investment balance after 30 years   252,124.11

Pretty incredible right? After 10 years I would be able to save up enough for a luxury car (my idea of a luxury car might be different than yours), after 20 years I could save up enough to completely pay for the first house I owned, and after 30 years I would have enough to completely pay for the house I own now, plus 2 luxury cars!

The lesson here is that savings accounts are like a brick building. They can be be built brick by brick, day by day, and after all those small pieces are put together they can grow into something enormous.

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