Ten Dollars a Day

Posted on December 3, 2009
Filed Under Snowflakes | Leave a Comment

Ten dollars doesn’t seem like very much. If you’re like a lot of people, if you found ten dollars on the street it likely would be spent by the end of the day. If you lost ten dollars, it probably wouldn’t seem like a huge loss. If you spent ten dollars on something you didn’t really want or need, you probably wouldn’t feel it was overly extravagant. The problem, though, isn’t that ten dollars isn’t very much money. The problem is that ten dollars doesn’t seem like very much money. Actually, ten dollars can break you or make you, because over time ten dollars a day can add up to a lot of money.

Let’s say you’re like a lot of people, living paycheck to paycheck. You’re not racking up any bills, but you’re spending everything you earn – nothing is going into savings. Then, something or a combination of things happen and your living expenses go up by ten dollars a day. What happens? Unless you can increase your income to match or get the money from family or friends, you’ll probably have to put the extra spending on a credit card. Let’s assume the interest rate on the card is 17%. In just one month, that will bring your unpaid balance to $300, which will start adding around $4.50 in interest each month to your balance. If this continues for just 10 months, you could have an accumulated unpaid balance of about $3240, wich will generate about $45 in extra debt every month until you get it paid off. I know this can happen because I let it happen to me a long time ago. Spending ten dollars a day more than you make, over time, can easily break you.

Let’s look at it from the opposite side though. Let’s say you’re spending what you earn each month and you have $3240 in credit card debt. If you could figure out a way to cut your spending by ten dollars a day and apply that ten dollars to your credit card, you could have the debt paid off in about 11-1/2 months (it takes longer to pay it off than it did to accumulate it because the unpaid balance keeps racking up interest charges). So, while over spending ten dollars a day can get you into substantial debt very quickly, under spending by ten dollars a day can get you out of that debt almost as quickly.

If you have no debt, ten dollars a day goes back to not sounding like very much. Even saving for a month and having $300 to show for it may not sound like much. But think about it. If you did it every month for 10 months, you’d have over $3000 saved. Even if you only did it for one month, the $300 could be leveraged. For example, if you wanted to take a shot at making money by blogging, $300 would easily pay for a domain name and hosting for a year with enough left over to have a custom logo done for your web site. There are other part time businesses you could get into as well for $300 in startup costs.

The other thing about small amounts of money (snowflakes) is that over time they can snowBALL. It’s really easy to come up with a few ways to make ten dollars, but dificult to do it consistantly every day. Over time though it gets easier, and you eventually could find yourself making an extra ten dollars each and every day. What then, quit? I’d suggest start working on ways to make a second extra ten dollars a day. How far can you go with this? That’s up to you. The sooner you start though, the faster you’ll get there.

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