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June 2007

Barbara O’Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management
Rutgers NJAES Cooperative Extension

The number “10” is a powerful tool. It is easy to multiply, divide, and remember; small enough not to discourage people from taking action; and large enough to make an impact over time. “10” also shows up repeatedly in expert recommendations to improve health and wealth. Whether it’s shedding 10 pounds, exercising in 10-minute increments, saving 10% of one’s gross income, reducing debt by $10 a day, or earning a 10% long-term investment return, “10” and derivatives of 10 (e.g., 1 and 100) are strong motivators if the magnitude of their impact is fully appreciated.

Below are some financial tips to consider that are based on the number 10:

  • “Pay yourself first” by saving at least 10% of your gross income. If you earn $50,000, you’d save just under $100 per week, preferably through payroll deduction. If you start saving $100 a week in your 20s, with an 8% return, you’ll have over $1.5 million in 40 years to provide financial security in later life.
  • Add just $1 a day ($30 monthly) to the minimum monthly payment due on credit cards. According to Slash Your Debt by Detweiler, Eisenson, & Castleman, paying $1 a day more than the minimum due on a $5,000, $10,000, and $15,000 balance on a 17% interest credit card will save $7,624, $12,615, and $16,168, respectively, in interest payments.
  • Save $10 a month, or multiples thereof, using the table below as a guide. Find the intersection of the interest rate that you expect to earn and the number of years you’ll be saving. Adjust the number according to your savings; e.g., multiply the figure by 5 for $50 ($10 x 5) of savings.

Accumulations Possible By Saving $10 Per Month at Various Interest Rates and Time Periods
1$122$ 123$124$125$125$126$127
2249253256258261264 267
4520532 544555567580592
10 1,4721,5591,6471,7411,8421,9502,066
255,1525,9806,9658,1489,57411, 29513,379

Source: How to Save $1,000 or More a Year, Rutgers Cooperative Extension Fact Sheet 539. Available at

  • Save $1 a day, plus pocket change, in a can or a jar by reducing daily expenses by $1. You should be able to save about $50 a month or $600 a year. Increase the daily savings amount to $2 or $5, plus loose change, and you’ll have around $1,000 and $3,000, respectively, saved.
  • Invest a portion of long-term (i.e., financial goals that are 5 or more years in the future) investments in stocks and stock mutual funds to potentially earn returns that have averaged about 10% a year since the mid 1920s. Beware of the risk-reward relationship, however. When you are investing, there is a positive relationship between the amount of expected return and the risk of losing your money. Stocks have more risk than bonds and cash investments but have historically provided a higher return over time.