Daily Expense Compounder
Visualize the opportunity cost of small daily habits. Calculate the future investment value of money spent on daily discretionary items.
About
Small, repetitive expenses often escape scrutiny because their individual cost appears negligible. The human brain struggles to intuitively grasp exponential growth, leading to a cognitive bias known as hyperbolic discounting, where immediate pleasure is valued disproportionately higher than future financial security. This tool calculates the Future Value of an Annuity to demonstrate the magnitude of lost wealth potential. By investing the cost of a daily habit into a diversified portfolio, the power of compound interest acts as a force multiplier. This calculator does not merely sum the cash spent; it reveals the capital that could have been accumulated had that money been deployed into productive assets.
Formulas
The calculator uses the Future Value of an Ordinary Annuity formula, adjusted for daily compounding frequency to match the daily nature of the expense.
Where P is the daily expense, n is the total number of days (years × 365), and r is the daily interest rate (annual_rate ÷ 365).
Reference Data
| Daily Habit | Cost ($) | 1 Year Cost | 10 Years (Invested @ 7%) | 20 Years (Invested @ 7%) | 30 Years (Invested @ 7%) |
|---|---|---|---|---|---|
| Bottled Water | 2.00 | 730 | 10,364 | 30,867 | 71,436 |
| Snack/Coffee | 5.00 | 1,825 | 25,910 | 77,169 | 178,590 |
| Lunch Out | 12.00 | 4,380 | 62,185 | 185,206 | 428,616 |
| Cigarettes | 15.00 | 5,475 | 77,731 | 231,507 | 535,771 |
| Craft Beer | 20.00 | 7,300 | 103,642 | 308,677 | 714,361 |
| Ride Share | 25.00 | 9,125 | 129,552 | 385,846 | 892,951 |
| Dinner/Drinks | 40.00 | 14,600 | 207,284 | 617,354 | 1,428,722 |
| Impulse Buys | 50.00 | 18,250 | 259,104 | 771,692 | 1,785,903 |