Turn $1 a day into $67,815

By Richard Jenkins

Want a foolproof way to turn $1 a day into $67,815? It doesn't take a lot of money or time or personal sacrifice. There's no magic, no multilevel marketing and no salesman calling at your door.

In fact, it's the simplest and most proven way to get richer, and if you extend this concept to other parts of your life, you could end up with an enviable retirement nest egg.

To start, all you have to do is take your pocket change at the end of the day and drop it in a jar. If you can do that, and you put away about $1 a day, that's just $7 a week. At the end of the month, you'll have about $30.

This is money in your pocket, so you've already paid taxes on it in the form of withholding from your paycheck. (If you're self-employed, that's not true, but we'll ignore that to keep things simple.) Every month, deposit your savings in a Roth IRA account, where it can grow tax-free and -- more important -- be withdrawn tax-free in the future.

What's a paltry $30 a month going to do for you? Growing tax-free for 30 years, with a 10% annual return, your investment account will be worth $67,815. (Stocks overall have returned an average of more than 10% a year since 1926, so buying a broad-based stock index fund like the Vanguard Total Market Index Fund (VTSMX, news, msgs) is the easiest way to capture that kind of growth.)

Not bad for pocket change, but that's just the beginning.

Here are some other ideas for saving a few bucks here and there that can add up to big dollars over time.

Trim your expenses to save more

Activity	Monthly Savings	Annual Savings
Take-out vs. dining out once a month	$45	$540
Manicure less often	$15	$180
Fewer trips to car wash	$12	$144
Video rental vs. movie monthly	$11	$132
Regular coffee instead of cappuccino on weekdays	$40	$480
Total	$123	$1,476

If you can knock this $123 out of your monthly budget, at 10% it will grow to $278,040 in 30 years. You've financed half your retirement with just a few small sacrifices.

If you want to see for yourself how small savings can multiply over time, spend a little time playing with MSN Money's Savings Calculator. You'll see that if you can add in some big-ticket savings, it takes just $443 a month to make yourself a millionaire.

Here are a couple of ways to do it:

Debt on wheels

Often, the same people who bemoan the fact that they can't save are driving around in a new car and making monthly payments on a 48-, 60- or 72-month loan. But you'll be amazed by how much you can save by buying a used car.

Consider the alternatives:

• 1: You put $6,000 down to buy a new car worth $26,000. You finance $20,000 at 6% interest for 60 months. Your monthly payments are $386.66. Total interest costs are $3,199, making the total cost of the car more than $29,000.

• 2: You pay $6,000 cash for a good used car. (MSN Autos lists used cars by price and mileage, with many in the lower price ranges.) Invest that same $386.66 a month for the same 60 months with an average 9% rate of return. At the end of 60 months, you would have roughly $28,000 in your investment account after paying 15% tax on about $800 of long-term capital gains. (The exact amount of tax would vary depending on your tax bracket.) Even if you subtract the cost of any additional repair costs for your older car, you still come out way ahead.

Plastic handcuffs

Buying on credit is a convenient way to pay too much for everything you buy. Consider the costs: Say you spend $1,000 on clothing, using a credit card charging 13% interest, and you make the minimum monthly payment to pay off the balance. It would take you almost six and a half years to erase the debt, and your $1,000 wardrobe would actually cost you more than $1,320.

Or maybe you're in the market for some furniture. Buy $2,000 worth of furnishings with a credit card charging 13% interest and consider the consequences if you pay off the balance by making minimum monthly payments. It will take more than 8 years to repay the debt. By the time the loan is paid off, you will have spent an extra $693 in interest. Try your own calculations.

Unlike most things in life, when it comes to saving money, it pays to sweat the small stuff. And when you're done with that, go after the big stuff, too.

Janet Luhrs contributed to this article.

Updated Jan. 25, 2008