Small changes to your life can add up over time. Especially when it comes to your money, finding small and SMART ways to save can potentially be the difference between thriving versus surviving in retirement.

Due to the power of compound interest, you’ll be surprised how quickly saving even nickels and dimes can add up. Imagine saving an extra dollar a day, it adds up to $365 a year.

If you saved that extra $365 and put it into an investment that earns 5% a year, it would grow to $465.84 by the end of five years. After 30 years that amount be $1,577.50! That’s the power of compounding.
With compound interest, you earn interest on the money you save and on the interest that money earns. Over time, even a small amount saved can add up to big money.

Here are the common everyday expenses where you can look to save.

Photo by Steve Johnson on Unsplash

Food

It is easy to overspend on a latte or snack. Eating out is expensive and adds up over time. To save money, create a meal plan during the beginning of the week. This can help prevent impulse spending.

For common items used regularly, buy in bulk and look for generic brands. Often the quality will be similar yet more inexpensive.

Luxury Items

The rich an afford to purchase luxury Items such as expensive wine, expensive perfume, and expensive watches. When starting on your journey towards building wealth, it is SMARTER to hold off on buying luxury items you may want but don’t need.
If you are tempted to purchase something, ask yourself these questions:

• Do you need it?
• Will the costs significantly improve your life and help you generate more wealth?
• Can you use that money in a better way?
• Do you need to put it on a credit card?

If you answered yes to any of these questions, then it is probably SMART to hold back. Wait 24 hours before making a purchase. Often that extra time will help prevent bad impulse purchases.

Interest on Debt

Whether it be student loans, credit card debt, the best business loans, shop around to make sure you have the best rates. A difference of one percent interest on a car loan can be thousands of dollars. In the case of a mortgage, it could be tens of thousands of dollars.

Fees

This can be any fee, from bank account fees, late fees, or unnecessary investment fees. Look at your expenses and see if you are paying more than you should. Remember, millionaires are built one dollar at a time!

Automatic Savings

Pay yourself first. Every paycheck have a portion put into your emergency fund or investment account. This way you are not tempted to spend it.

Start with a small manageable amount and then increase it over time. Get to the point where you are maxing out on your IRAs and are able to put at least 15% of your income.