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Unexpected Financial Windfall

| July 03, 2017

Would you like a financial windfall? We all would! The good news is you can create one. Pick a habit…any habit… eating out, binge shopping, junk food, coffee shop coffee, smoking, soft drinks, alcohol….What does it cost you? It may not seem like a lot, but consider this recent study in USA Today:

According to a survey by Visa, the average American spends $11.14 on lunch two times per week. The USA Today study proposed that if this same average American invested this money spent on eating out for lunch and earned a modest 6% on these monies, 30 years later they would have a windfall of $88,500! It doesn’t cost that much to eat out for lunch…or does it?

There is an old adage we use a lot! Watch your pennies and your dollars will be there. This is a prime example of what that means. So what is your $11 habit? In the July 17, 2012 issue of “Mental Floss”, there was an article by Lucas Reilly, “By the Numbers: How Americans Spend Their Money.” Wow! Not only was it interesting and even laugh out loud funny, it was a wake-up call. Here were just a few of those that made the list…

  • Pretzels- $550 million
  • St. Patrick’s Day- $4.14 billion
  • Pet Halloween Costumes- $310 million
  • Tattoos- $2.3 billion
  • Tattoo Removal- $66 million
  • Girl Scout Cookies- $800 million
  • Video Games- $17 billion
  • Soft Drinks- $65 billion
  • Bottled Water- $11 billion
  • Fast Food- $117 billion
  • Dollar Store Purchases- $30 billion
  • Ringtones- $5 billion (worldwide)
  • Twinkies- $500 million1

The missing one was Twinkie Removal- Cost Unknown!

It may seem a little peculiar to save your Twinkie money, but there are some hard facts to consider. If you plan to retire for 30 years and need $5,000 per month to live on, you will need $1,060,751. And this is based upon earnings of 6% each year and inflation at 2%. Unfortunately, the average 50 year old has only $42,797 saved and 36% of Americans aren’t saving at all.2 Avoiding the Twinkies may be more beneficial than you think and in more ways than one.

If you don’t have a bad habit which is costing you, consider what you might be wasting. Italian born Gia Metero wrote an article last year titled, “10 Things Americans Waste Money On That I Can’t Understand.” Waste = Cost. Ms. Metero mentioned everything from gym memberships that aren’t used to extreme air conditioning/heat, to fashion that goes away tomorrow rather than timeless pieces, to bulk grocery buying at Costco or Sam’s that ends up going bad, to the “bigger everything” cliche that exists for Americans—bigger homes, bigger kitchens, bigger beds, bigger TVs.3 Her article is rather enlightening and a good one for a little reflection on priorities.

James Frick, who arguably transformed the future of the University of Notre Dame, famously said, “Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.”

It is hard to keep your future finances at the top of your priority list when it seems off in the distant future. But something to think about is “what if I don’t?” Maybe making your financial future a priority is easier if you ask yourself, “If I don’t, would I regret it?”

  2. 2016. The Motley Fool. 20 Money Stats That Will Blow You Away