The Actual Cost of Daily, Weekly, Monthly, and Yearly Habits

You read a lot about personal finance habits that will “make you rich,” but have you ever really processed the thought of what personal habits do for you? This article will specifically address the actual numerical effect of daily, work weekly, monthly, and yearly habit changes over only 15 years assuming monthly compounded interest of an annual rate of 8%.

Just too really bring this thought home, this is not an “in 30 or 40 years picture.” This is within only 15 years. Far too often the focus is just on retirement and the time frame when you are basically winding down from your younger adventurous and family oriented life, which is kind where you do your actual “peak living.” Yeah anything numerically compounded 40 years out will look rosy, but to me, 15 years is much more real and exciting.

Think about where you will be in 15 years?

Myself, I will be 43 years old (hopefully), likely with a well-established family and children within shouting distance of college. Just visualize for yourself where you will be in 15 years.

So now it’s time for the numbers. Let’s see how your habits can affect where you will be financially at that 15 year point.

Below is the breakdown of the frequency and amount saved, Compounded at 8% (Annual Rate, monthly compounded) over 15 years.


Amount / Frequency.


5-Days a Week
























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Daily (Rule of Thumb: 10,500x your average total daily savings to see 15 year total):

What do you associate with yourself consuming on a daily basis? Well let’s see. Food, energy, and often times gas are the first few items that come to mind. If you are in a household of two adults like myself, and you both knock off $5 each from your food budget, you would rack up a staggering $105k over the next 15 years. As an added bonus you are likely to get even more perks from the activity of targeting your food. You may decide to cook more (healthier options) and possibly grow your own food. Ten dollars every single day might sound like a lot, but I promise you that most people could easily save five bucks each of their food and “food entertainment” budgets.

Energy is a little tricky, but I have to believe with practice and setup, you could get close to a $1 a day in energy savings. This might mean investing in LED lights, an advanced thermostat, or various other energy saving technologies. Don’t get caught up solar or some other cost heavy alternative energy just yet. You want that “buck a day” to mainly be low capital requiring and passive, meaning you don’t want it to run your life. If you find a way to save a buck a day on energy, you’re walking with roughly $10.5k after 15 years.

5-Days a Week (Rule of Thumb 7500x the average savings for each work day expense to see 15 year total)

The cost of Starbucks over the long-term.
The cost of Starbucks over the long-term.

This is the one that hits home with me. I personally used to have this nasty habit where I was driving into my job and paying for parking. Additionally I was also eating lunch out most of those days ($7-$12 per lunch with the occasion $15+). So let’s do the math for my personal situation.

You know that the government uses $.575 a mile as the estimation of what it costs to drive a car (for business purposes)? That’s for gas, maintenance, tires, insurance, license, registration, taxes, depreciation, and applicable finance charges. Let’s be conservative and say it’s only $.30 a mile.

Driving: 44 miles (roundtrip) * $.30 a mile = $13.20 a day in car costs
Parking: $8 to $10 parking (event days are higher) = $8.50 average a day in parking costs
Lunch: I would ballpark eating out is $6 more costly than a packed or at home lunch
Total: $27.70 a work day.

Let’s regularize that a little bit by taking out 4 weeks (vacation/sick) = $25.56 for purposes of “5-Days a Week” calculation. Ready for this?

Total Cost: $192,415 over 15 years.

You read that right, almost $200k in driving, parking, and excess eating over 15 years! Now you might be saying “I have to get to work,” but I am in a unique situation where my employer will pay for a bus pass (which also cancels out parking costs). As for the lunch, you just have to throttle it back as much as possible. Maybe only eat out one day a week and try to keep it under $10.

The point is, most working adults can make some major ground during the work week with some sacrifice. I understand this represents real sacrifice (not going to lunch, taking public transit). Just remember that $10 a work day is roughly $75k over 15 years.

Monthly (Rule of Thumb: 350x the monthly costs):

Additional Housing Costs
Additional Housing Costs

What monthly subscriptions do you have? Maybe Netflix, Hulu, Gym membership, Spotify, Internet plan, or a Cell Phone plan? It might not be a bad idea to check your bank statements to detect what monthly subscriptions you even have. I will say that having a $10 dollar a month for some subscription doesn’t seem that bad if you actually use the service, I could see how you could easily get $3,500 of value out of Netflix over the next 15 years. I assume that you don’t have actual cable since you are reading this blog, but if you have a $50 cable plan, it’s $17,500 over 15 years.

The next thought that comes to mind is a car payment. I make it very clear on this site that I actually bought a new 2013 Honda CRV, because the overall cost per month is fairly manageable versus buying a “decent-ish” used car. I calculated my CR-V to cost about $20 more a month to own than a $10k Used CR-V with 137,000 miles and less features and lower quality. Now of course if you say, I could have save $7k over the next 15 years by driving older used CR-Vs versus more updated, nicer, and cleaner CR-Vs, I would tell you it is simply not worth it to me. There are only two ways to approach a car in my opinion, (1) Buy a Under $5k “beater” in cash or (2) Buy the Highest % Resale Value New Car with 0% or .9% Financing / Buy at Best Time and Negotiate for months. This is a debated subject that I have and will continue to debunk.

You also have to toss your house into the equation here. How much housing are you consuming each month? Work all the black magic you want with equity and appreciation, but the larger the house, the more you are consuming. Ultimately a large house will cripple you monthly by eliminating positive cash flow that could have been invested. I’m not even going to warrant a discussion about how “my $300k house went up to $600k in 2.5 years.” Housing “investing” is simply too speculative and risky to count on as an income source. Congrats to anyone who hit a big windfall though.

Another thing to possibly consider when talking about monthly costs is generic versus brand name drugs if you have any prescriptions. Leave no stone unturned.

When it comes to “monthly” it could be anything, and of course there is plenty of overlap with Daily and Work Weekly (like utilities/energy).

Call your internet company and threaten to leave unless they discount it, or actually leave to another provider for added savings.

Take home message here, $10 a month is $3.5k after 15 years, take a look at any of your monthly charges.

Yearly or Annual (Rule of Thumb: 30x it):

Car/Home Insurance, Costco Memberships, Amazon Prime Memberships, Credit Card Memberships, and Vacations (commonly yearly) are some examples of things I associate with “yearly” or annual costs.

First off, Car/Home Insurance and Credit Card Fees literally could be $200-$400+ of savings a year by making a few hours of phone calls. I had my $89 a year credit card fee waived on my credit card, which means that that phone call was worth almost $3k over the next 15 year (about 20 minutes).

Some memberships are worth it though, amazon prime is the definition of high value for the cost. Costco I would argue, not so much (I expect hate for this comment, article to follow). Really assess what your membership provides to you.

The toughest subject of all for me is without a doubt, travel. I believe that traveling has a great amount of value, but in a lot ways it can really hinder your finances long-term. It’s important to find the balance and make sure that what your spending has the value you have assigned it. Maybe spending $8k a year traveling is actually worth more than $240,808 in 15 years. I mean 15 years of trips does sounds great to me. The key when it comes to traveling is not to feel entitled to it. I personally believe we are entering a time frame where people believe they “deserve” a $3k per person vacation, as if the expense is actually a necessity to unwind from their daily grind. Make sure you maximize your travel utility/value, because constant vacationing sure can hit you back financially long-term.

And don’t forget, for every $1,000 of annual costs you cut, expect a $30k return in year 15.

So what is the take home message here?

You need to visualize the actual effects of your spending habits. Let’s take one of the most important examples into consideration, your housing costs. Suppose you buy a house that effectively costs a net $350 a month more (after all considerations including utilities, estimated appreciation, etc.) to own versus an alternative house. If you instead buy the cheaper home and invest the difference, it’s likely that in 15 years, you will have about $122.5k more net worth from only that single decision. Now it’s important to note that only you can decide whether $122.5k versus the better house is worth it, but the important thing is to see the consequences.

It’s not all “gloom and doom” though.  There are times when the benefits versus consequences will lean in favor of taking the action.  Look back at the 15 years of Netflix for the cost of roughly $3.5k, a lot of people more than get the value out of Netflix to justify making that purchase.

Maybe your daily coffee ($3) is actually worth $31.5k over the next 15 years, it’s very subjective.
Also this math can be turned into a positive as well. What if you picked up a 12 hour a week job @ $8 an hour (let’s call it after-tax), Suddenly you have $350 a month coming in (took out a little for transportation). The decision to hold a 12 hour a week job should increase your net worth approximately 122.5k over the next 15 years. Is that enough for you to go apply to your local Starbucks? Well that’s up to you.

It’s actually not even about single decisions, but multiple decisions.

Let’s say you cut your Monthly Costs (or increase your income, or combination of both) by $750 a month ($25 a day). Below might be an example of how you do so.

  • $25 utility savings
  • $280 food savings
  • $25 gas savings (carpool/group errands)
  • $300 from cheaper house (fairly vital decision for most)
  • $20 a month from cable and credit card negotiation
  • $100 a month from “at work spending” (lunches, parking, etc.)

The result? Well your net income should be roughly $262,500 higher after the next 15 years (and even higher after that point). Note this is above and beyond what you save elsewhere (401ks, ROTH, other savings, etc.) Note: Assuming 8% annual return compounded monthly.

Another way of looking at it? You need to save about $2,860 a month to have a million dollars in only 15 years. I  understand that this is not obtainable for a lot of people, but it adds perspective. It’s too common that people don’t fight monthly costs because they simply believe their spending “is what it is.”

Well, I’m telling you to fight it. Buy a cheaper home, fight for that $95 a year credit card feed, argue for that $10 off a month with your phone and internet provider, cook more, turn off your unneeded appliances and lights, avoid “work day” habits, and in general, consume less.


2 thoughts on “The Actual Cost of Daily, Weekly, Monthly, and Yearly Habits

  1. I love the shock value of this post. When you can summarize, in a table, the effects of small savings over not very long periods of time, people take notice. Surely we can all save $1 or $2 each day? I’m guilty of the latte (or in my case the Americano) a little too frequently. Running late for work? Easy to save a few minutes by just driving through and getting coffee on the way. But even if I do that only twice a week, I’m throwing $10k down the drain.

    Perspective is important (which is why, although as an earlier post of yours, which I agree with, says Dave Ramsey takes F students and makes them C students, he does get one thing right. For a lot of people, it’s not the numbers that ultimately trip them up. It’s the fact that they can’t see the forest for the trees.)

    1. Thanks for stopping by, and I agree that Dave Ramsey does some things right. I’m also guilty of the Americano as well (more frequently than I will admit).

      I think the one that hits home the most is actually the monthly frequency. You lock yourself into the house that effectively costs $300 more, you are looking at $105,000 more over 15 years. It’s possible that house is indeed worth that $105,000 more, but far too often I don’t see the utility of the additional cost (to each his own).

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