Every day you go to work and when the end of the month comes hopefully there is some cash left over. But how much are those savings really worth? When you have that moment where you think to yourself, should I buy myself a treat like a $5 coffee or save this hard earned money, what should you do?

Hopefully next time you find yourself faced with that decision, think about this post and remember what that hard earned dollar is really worth.

### Earning the $$$

For starters, you had to earn the $5. Lets say you earned it the old fashioned way, with hourly labour. This means you paid at least income tax, CPP and EI. Once that $5 finally got into your hands it probably cost you about 25% more or $6.25 just to earn it. Plus you likely will have to pay sales tax of 12% on the $5 bringing the total to $6.85

And what about the time that you invested? Canadians earn on average $928 per week before taxes. With a 50 hour work week it takes you 21 minutes to earn that coffee.

Don’t fool yourself into thinking that it’s just $5, because it isn’t. It’s your time, your tax dollars, and your future.

### Investing the $$$

What if you invested the $5 in a diversified portfolio in an RRSP instead. Because it’s in a tax advantaged account, that $5 actually nets you $6.25 in savings right from the start. Because it’s a diversified portfolio, let’s estimate that it earns 7% a year.

If you’re 30 and you save that $5 until you’re 60, it’s worth $48 dollars. $48 dollars can buy a lot of coffee (even with 2% inflation).

And what about your time? That $5 coffee that took you 21 minutes to earn. If you save it then you are banking the equivalent of 2 hours worth of work in the future.

### Financial Independence

So stop in the coffee lineup and look at that $5 and think, do I really want it or would I rather have $48 and two more hours of freedom? Because that’s really what the decision is about. The joy of drinking that cup a coffee that will only last a few minutes, or stacking cash for your future.

And of course, buying a coffee regularly adds u!. What if you forgo that cup of coffee twice a week for one year? That’s $600! If you save one year’s worth of coffee for 30 years, it’s $4,567 dollars or 5 weeks worth of work.