Ask the majority of kids today what their least favorite subject is, and they’ll probably say math. Math really has a bad reputation. I remember sitting in pre-calculus wondering when I’d ever use math when I was a grown up. And the answer is all the time. Whether it’s figuring out a sale price or simply doing some quick addition, you use math to get through your daily life. But there are ways that math can pay off — quite literally — that you may not be utilizing, quite literally. Math we use most often use to help our clients make the most of their money is compounding.

Let’s explain compounding with an example. Take your long-term financial goal. Say you want to save $100,000 a year to achieve your financial goals, but maybe right now you can only save $50,000 or even less. The key is saving any amount you can as soon as possible (saving now versus later) and then targeting to save the rest when you can. Even if you start out saving $10,000 a year, knowing that you need to save $100,000 or more, you will eventually find a way to do that because now you have a target; before, you had no target at all. The sooner you begin, the further the power of compounding and getting to geometric compounding will take you.

For many people, they understand the gist of compounding but not the actuality of it. They intellectually comprehend compounding on some level, but usually not with any real clarity—or they simply don’t believe it. I like to explain it by using bacteria in Petri dishes as an example: a bacterial colony starts out slowly; one cell becomes two, which become four, and so on. At a certain point, the doubling really takes off, and you’re talking about much larger numbers being created in the same span of time. This is sort of how compounding works: It starts slow. It takes time. But if you’re steady with it, it gets to a point where it grows at a much more rapid pace.

Using this imagery, let’s transfer the idea of compounding to money and use two people as an example: the Go-Getter and the Slowpoke. Compounding always rewards the person who saves sooner. Our Go-Getter has an extra $5,500 coming in annually, and she starts to save it. After ten years, she stops saving and just lets it grow and compound. Meanwhile, the Slowpoke also has that extra $5,500 coming in, but she finds ways to spend it. She goes along like that for ten years, then starts saving in the eleventh year.

By year forty-three, our Go-Getter (who put away $55,000 for those first ten years and then didn’t save any more) has more money than the Slowpoke (who waited until year eleven and then saved for thirty-three years). The Slowpoke saved more than three times the amount but was still behind the Go-Getter!

Math really can pay. To learn more way about how to use math to improve your financial situation, visit