One of the best ways to increase your savings is to spend less. Even a simple change such as bringing a bagged lunch to work a few times a week can make a difference. This calculator illustrates how a little lunch savings can go a long way.

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Definitions

• Expected Rate of Return-This is the annually compounded rate of return you expect from your investments. If you pay taxes on the interest, dividends or capital gains from these investments you may wish to enter your after tax rate of return. The actual rate of return is largely dependent on the type of investments you select. From January 1970 to December 2007, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.4% per year (source: www.standardandpoors.com). During this period, the highest 12-month return was 61%, and the lowest was -39%. Savings accounts at a bank may pay as little as 1% or less.It is important to remember that future rates of return can’t be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.
• Years to save-The number of years you are going to save your lunch money.
• Eating out lunch price-Average price of your lunch when you buy your meal.
• Cost of bagged lunch-Average cost of bringing a bagged lunch from home. Make sure to include the total cost of your lunch. If you buy a drink (instead of packing it) make sure to include that amount here.
• Number of bagged lunches per month-The number of lunches you will bring from home each month. The average number of working days in a month is about 20.
• Monthly savings-Total you should be able to save each month by bringing your lunches from home.