Frugal living discussions often talk about pinching pennies or stretching a dollar. “A penny saved is a penny earned,” or so the saying goes, but is that true? What if that penny saved could end up being much more? Turns out, living frugally can save you way more than you might think.

Frugality is typically thought of as “x plus y equals z”. If you skip a daily $5 takeout coffee, you’ll save $35 a week, $150 a month, or $1,800 a year. Using that same thought process, if you cut your monthly spending in half, your income will last twice as long. Makes sense, right?

Well, yes and no. This assessment isn’t wrong, but it’s incomplete. Pinching pennies does add up in the short term, but the long-term payoff is likely bigger than you think. This is because of the time value of money, also known as interest. When you invest the money you save, you’re stretching that dollar into something greater as it accumulates interest over time.

For instance, instead of simply saving $1,800 a year making coffee at home, you’re really saving $1,800 a year plus any interest you’d earn in investing those dollars in a money market or retirement account. That $5 cup of coffee could eventually be worth an untold amount. Would you give it up for $10, $20, or $50 in the future?

Maybe saving $50 per cup seems like a lot to you right now, and maybe not. But it’s worth considering how valuable frugality now will be to you down the road. Lowering your expenses now so you can save more and take advantage of interest gains could be the leg up your future self needs to pay cash for a car, make a down payment on a home, go on that dream vacation, or send a kid to college.

Money you save now, for the future, is worth more than the cost of what you’re sacrificing today. This doesn’t mean it’s best to get as close to zero spending as possible. You have the freedom to stretch your dollars as you choose.

But it is worth considering the future costs tied to everyday spending habits – and think about how a few frugal living habits could tip the scales in your favor. In other words, a penny saved could be a nickel, a dime, a quarter, or maybe even a dollar or more down the road.

Shelby Yinger is a community officer manager for F&M Trust.