Understanding Time Value of Small Expenses
How This Small Expenses Calculator Works
This calculator takes a list of small recurring expenses (like coffee, snacks, rideshares, or in-app purchases) and converts them into monthly and yearly costs based on frequency settings you provide. It then projects the total cost over a chosen number of years (the horizon). Optionally, it shows a simple "invest instead" view that estimates what the same stream of money might look like if it were invested at an assumed annual return rate, using basic compound interest calculations. All calculations are based on the numbers you enter—this tool does not access real spending data or verify amounts.
Why Frequency Assumptions Matter
The calculator converts different frequency types (per-day, per-week, per-month, per-year, per-transaction) into monthly and yearly equivalents. For example, a daily expense is multiplied by approximately 30.4 days per month (or 21.7 weekdays if you select "weekdays only"). A weekly expense is multiplied by 4.345 weeks per month. These conversions use standard calendar approximations and may not match your exact real-world patterns. The accuracy of the results depends on how well your frequency inputs match your actual spending patterns.
What the "Invest Instead" View Does and Does Not Mean
The "invest instead" view is a simple mathematical scenario that estimates the future value of monthly contributions invested at an assumed annual return rate, using basic compound interest formulas. It does not: predict actual investment returns, account for investment fees or taxes, model market volatility or risk, guarantee any returns, or provide investment advice. It is a hypothetical illustration for educational purposes only. Real investment returns vary significantly, and this tool does not model real-world investment performance. For actual investment planning, consult qualified financial professionals and consider your full financial situation, risk tolerance, and investment goals.
Note: This calculator is for educational and convenience purposes only and does not provide financial, investment, or tax advice. It uses simplified assumptions and does not account for taxes, fees, inflation, or other factors. The "invest instead" view is a hypothetical scenario, not a prediction or guarantee. Always consult qualified financial professionals for actual financial planning, investment, or tax guidance.
Frequently Asked Questions
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