Saving $5 notes could be the key to building a nest egg.
A blogger has revealed putting $5 notes aside and then depositing them in a separate bank account helped her save $50,000 over 13 years.
In her blog, “Save Money Fast with Fives”, Marie C. Franklin said she first came up with the idea while putting two daughters through college.
“My two daughters were both in college 13 years ago when I started my practice of saving $5s,” Mrs Franklin said.
“It was, simply, the only way I could manage to save even a small amount of money while shouldering, along with my husband, the responsibility of financing their college educations.”
Mrs Franklin, a journalism professor, said she decided to hide a $5 bill and “refused to spend it under any circumstances” in a separate compartment of her wallet, and as the pile grew, eventually in an envelope.
“As the $5s started adding up, I put them in a separate bank account. Within weeks, I had a nice little stash, more than $200. Then $350. Then $500. By the end of the first year, I had saved almost $2000,” she said.
She said “only cash will do the trick” and “if you don’t use cash, this won’t work” and “Millennials,” who have “a mostly cashless existence” need to “shake it up”.
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“Take out enough cash to cover the basic expenses you expect to face in the next seven days,” Mrs Franklin said
“Pay for as many things as you can in cash. Consume as you need, rather than simply buying out of habit.”
Mrs Franklin suggested saving $5 a day, each day for a year, equates to $1825.
“Save five bucks a day until you turn 75 years old, assuming you’re 25 years old today, and that five dollar account, without adding in any compounded interest if you kept the money in a piggy bank, would be worth $91,250,” she said.
If you want to speed things up, she recommended a number of tricks to maximise your $5s, including paying for purchases less than $5 with a $10 or $20 note, or asking for two $5s instead of a $10 when getting change.
A Reddit user said they managed to save US$2285 after starting in August 2012 while another, working for tips, said they starting dropping $1s and $5 into a box.
“One morning after about six months, I counted it all up; $630 in 1s and $1420 in 5s. I was somewhat shocked. The bank teller was not amused,” they said.