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When it comes to saving money, every penny counts. So many people simply assume that small amounts of money aren’t worth the bother of saving. But little things add up.

Have you ever broken a large bill, such as a fifty, to only be surprised that it disappeared so quickly. Little amounts of money will just flow out of your hands. So it is logical to assume that little amounts can add up just as quickly.

However, you can’t just assume that spending and saving is equal. Saving $15 a week is not the same as spending $15 dollars a week. You have to factor in compounding interest on saving and borrowing.

Let’s look at $15 dollars a week in three different scenarios: spending, saving and borrowing.

When you spend $15 dollars a week in cash or from your checking account, you are spending $780 a year. That doesn’t seem like to much. After all, it is only a little over $2 a day. But over five years, that $15 adds up to $3900.

If you are able to save that $15 a week and put it aside in a savings account that earns 3% interest, you could end up with approximately $4,202. By saving your money, you made around $300 dollars.

This isn’t taking into account that there are much better saving options out there. After saving for a year, you could put the money over into a CD, starting a ladder of sorts. CDs usually have higher interest rates, yet are still a safe investment for your money. Remember that you may have to pay taxes on any interest your accounts make.

But if you borrow the money, say you find that you are short $15 dollars a week, or $65 a month, and you charge it on your credit card to make up for the shortcoming. Over five years at a 18% interest rate, you will end up with $6000 in credit card debt. That is $2000 more in debt that you could have saved.

With a little over a $2 a day investment, you can have a nice amount of money in five years. And remember that with compounding interest, the more time you give your money, the faster it will grow. Think about it.

I find that this is also a good option for kids to learn how to save for a large item. When your child is twelve, give them the option of saving $15 a week. They can work for you for this money or it can come from their allowance. Do the math and let them see that by saving this small amount of money, they can have enough for a car in five years. There are plenty of financial lessons to be learned around the purchase of a teen’s first car.

Small amounts can have a large impact on your personal finances. There are plenty of ways to find extra money to save. You can simply dump all of your dollar bills and change in a jar each night. You can use coupons and put the money saved in your jar. You can decide not to buy something you don’t need and put the money in your jar. Small amounts of money are worth the bother after all.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

Written By : Martin Lukac