It feels like you can't leave the house without spending fifty bucks these days. But what if you invested it instead?
53% of Aussies have made a 2026 New Year's Resolution to save more money, according to recent Finder research.
Which makes sense – it feels like you can't leave the house without spending fifty bucks these days.
But according to the same research, only 18% of Aussies have a resolution to invest more.
It's riskier, but investing can get you further than saving. So let's take a look at the difference between saving and investing an extra $50 each week.
The savings trap
It can be tempting to put your money in a high-interest savings account instead of investing it.
In 2023, there was an Australian government inquiry on savings accounts. It found that two in three savings accounts holders miss out on bonus interest. Holders don't meet requirements such as maintaining a balance or making enough deposits. It can cost them $1800 in missed interest according to the ACCC.
Even if you receive the full rate, the bank might change the rules. You have to pay tax on interest you receive. Your money can be way too easy to access when an impulse to buy hits.
When to save, and when to invest
It's generally accepted that saving money instead of investing it is the way to go if:
- You're building an emergency fund
- You have short- to medium-term goals, such as going on holiday or buying a car
- You don't feel comfortable with the ups and downs of the market
And people generally invest instead of save to:
- Help achieve medium- to longer term goals, such as retiring early or obtaining financial freedom
- Beat inflation, which eats into money in the bank, particularly if it's growing slower than the market
- Build wealth faster than they could by saving on their own
Different types of investments have different levels of risks. MoneySmart has a handy chart that helps compare them.
Even if you know all this in theory, it can still help to see how it plays out.
Saving vs investing vs doing nothing: What can an extra $50 a week do?
Let's say you find an extra $50 a week. You might be tossing up between four choices. Spending it; putting it in a shoebox under your bed; saving it in a high-interest account; or investing it.
Let's take a look at what happens with a weekly deposit that compounds monthly.
(We picked the 30 year average return of the Australian stock market in this example. It works out at 9.3%pa. Past performance isn't a reliable indicator of future performance. The value of your investment can rise or fall. We used the MoneySmart compound interest calculator for this example. You can put your own numbers in here.)
The value of an extra $50 p/w
| Timeframe | Spend it | Shoebox | Savings (5% pa) | Invest (9.3% pa) |
|---|---|---|---|---|
| 1 year | $0 | $2,600 | $2,660 | $2,714 |
| 5 years | $0 | $13,000 | $14,735 | $16,471 |
| 10 years | $0 | $26,000 | $33,644 | $42,647 |
| 20 years | $0 | $52,000 | $89,057 | $150,348 |
(Compound Interest Calculator from moneysmart.gov.au, results are only estimates. Your actual returns will vary. Seek personal financial advice from a licensed professional such as a financial adviser.)
The cost of doing nothing
Comparing your options helps you see why so many people put off investing.
It can take a while for it to seem like your investments are doing much at all.
Add in market turbulence and you can feel like a bit of a wally for not putting it in a savings account instead.
💡 But check out what happens after 10 years.
There are clear differences between the shoebox, savings, and investing options. We think that's the time when you're most likely to thank or commiserate with your past self for making a decision.
When to invest an extra $50 a week
Comparing your numbers helps you figure out which kinds of goals are worth investing for.
Generally this depends on your risk tolerance and timeframe. Investments fluctuate: it's easier to tolerate volatility if you're investing for the long-term. Putting your rent money in the market trying to double it before next Tuesday? Not so much.
Our Spaceship Voyager managed funds have recommended holding periods. How long we recommend you hold them depends on what they're made up of. You can check out their long-term performance on our website and app.
What to do with an extra $50 a week
Investing generally works best when you give it time to.
People might tell you that $50 a week isn't enough to invest, or you should save it to invest in property instead.
Or you might be on your third Uber Eats delivery for the work week, and think, "This one time won't hurt."
But small amounts add up. An extra $50 adds up - whether you save it or invest it.
Keeping your long-term goal in mind can help you think in decades and not days, like we do at Spaceship. It's why we started Spaceship Voyager.
Keeping the risks in mind helps too
Of course, all investing comes with risk. Some of these include that you'll need your money before you're expecting, and have to pull it out on a down day, or that your investment doesn't behave like you want it to. That's why we recommend doing your research, seeking personal financial advice if you're unsure, and making investments that are appropriate to your risk tolerance, timeframe, and personal circumstances.
Further reading:
Where to find an extra $50 a week
How to build your emergency fund
