A few weeks ago I stumbled across something called the “Rule of 173” while reading about personal finance, and it genuinely changed how I look at my monthly credit card statement. It’s a simple bit of math, but it reframes every small recurring expense in a way that’s hard to un-see once you learn it. Since so much of retirement planning comes down to what we do with our money before retirement, I wanted to dig into where this rule comes from, whether it holds up, and how I’m actually using it.
Where the Rule of 173 Comes From
The number 173 isn’t arbitrary. It comes from the future value of a monthly investment (an “annuity”) compounded over 120 months (10 years) at an assumed average annual return of roughly 8%, which is a commonly cited long-run average for the U.S. stock market before inflation. Run that math, and each dollar invested monthly for 10 years grows to roughly $173. So instead of doing the full compound interest formula every time you want to size up a subscription, you just multiply by 173 and get a ballpark answer.
It’s part of a small family of “rule of thumb” shortcuts — the same spirit as the Rule of 72, which estimates how many years it takes an investment to double at a given interest rate. These rules aren’t meant to replace a real calculator or a financial planner. They’re meant to make a number stick in your head long enough to change a decision.
The Math, Broken Down
Here’s the formula behind it, if you want to see the mechanics: the future value of a series of equal monthly investments is calculated using the annuity formula, factoring in the monthly rate of return compounded over the number of months. At an 8% annual return (about 0.643% monthly, compounded), $1 invested every month for 120 months grows to approximately $173.
You don’t need to run that formula yourself — that’s the entire point of the shortcut. Just take any monthly expense and multiply:
| Monthly Expense | × 173 | 10-Year Opportunity Cost |
|---|---|---|
| $10 (one streaming service) | × 173 | $1,730 |
| $40 (coffee habit) | × 173 | $6,920 |
| $75 (gym membership) | × 173 | $12,975 |
| $150 (multiple subscriptions combined) | × 173 | $25,950 |
| $300 (a car payment-sized expense) | × 173 | $51,900 |
These are illustrative examples, not a prediction of what any specific expense will cost you — your actual results depend entirely on what you’d have done with that money otherwise, and markets don’t move in a straight line.
The Companion Rule: Rule of 752
If the Rule of 173 handles monthly expenses, its sibling — the Rule of 752 — does the same thing for weekly expenses, also assuming roughly a 7-8% average annual return over 10 years. Multiply any weekly cost by 752 to see its rough 10-year opportunity cost. A $20/week habit (two coffees, a couple of lunches out) works out to roughly $15,040 over a decade using this shortcut. Between the two rules, you can size up almost any recurring cost in your budget in a few seconds.
What Surprised Me Most
I expected the math to feel like a scare tactic, honestly. What actually surprised me is how it changed which expenses I paid attention to. It’s not the $10 subscriptions that add up to anything alarming on their own — it’s realizing how many of them I’d forgotten I was even paying for. The rule didn’t tell me to stop enjoying things. It told me to actually notice what I was spending on autopilot.
Where This Rule Falls Short
Like any rule of thumb, the Rule of 173 has real limitations worth knowing before you take it too seriously.
It assumes you’d actually invest the money. The entire premise depends on redirecting that $40/month into an investment account consistently for 10 years — not just skipping the coffee once and spending the savings on something else. If the money doesn’t get invested, the math is purely hypothetical.
It assumes a specific, uncertain rate of return. An 8% average annual return is a reasonable long-term historical assumption for stocks, but it’s not guaranteed, and it doesn’t account for the ups and downs along the way. A bad decade in the market would make the real number lower; a great decade would make it higher.
It ignores taxes and fees. Depending on the account type, investment growth can be taxed, and most investment accounts carry at least small fees. The $173 multiplier doesn’t account for either.
It can miss the point of the expense. Some recurring costs aren’t wasteful — they’re for things you genuinely value, or that make daily life better in ways that are hard to put a dollar figure on. The rule is best used as a filter for expenses you’re not sure you still want, not a blanket argument against ever spending money on anything recurring.
How I’m Actually Using This Rule
Rather than treating the Rule of 173 as a reason to cut everything, I used it as a prompt to go through my own recurring charges and ask a simple question for each one: do I still get enough value from this to justify what it’s really costing me? For some things, the answer was an easy yes. For a handful of subscriptions I’d genuinely forgotten about, the answer was an easy no — and those are the ones I canceled.
The practical first step is simply seeing everything you’re paying for in one place, since most of us have subscriptions scattered across different cards and accounts that are easy to lose track of. [AFFILIATE PLACEHOLDER: link to a subscription-tracking/cancellation tool once approved] is the kind of tool built specifically for this — it scans your accounts, surfaces recurring charges you might have forgotten, and in some cases can even help cancel the ones you don’t want anymore.
The second half of the equation is actually redirecting that freed-up money into an investment account instead of letting it quietly get absorbed into everyday spending. If you’re just getting started with investing and want something simple, [AFFILIATE PLACEHOLDER: link to a beginner-friendly investing app once approved] is a low-friction way to automate small, consistent contributions — which is exactly the behavior the Rule of 173 is trying to encourage in the first place.
A Simple Way to Run Your Own Audit
You don’t need a spreadsheet degree to do this. Here’s the version I actually used on myself, broken into steps that took less than an hour total.
Step 1: Pull three months of statements. One month isn’t always representative — some charges are quarterly or annual and won’t show up if you only look at the most recent cycle. Three months gives you a more honest picture.
Step 2: List every recurring charge, no matter how small. Streaming services, apps, memberships, subscription boxes, storage plans, software — anything that charges you automatically on a schedule. It’s easy to underestimate how long this list gets until you actually write it out.
Step 3: Multiply each one by 173 (or 752 if it’s weekly). This is the step that changes how the list feels. A page full of $8, $12, and $15 charges suddenly has real numbers attached — some in the thousands, a few in the tens of thousands if you’ve had them for years and plan to keep them for years more.
Step 4: Sort into three piles. Keep, without a second thought — things that clearly earn their place. Cancel, because you genuinely forgot you had it or stopped using it months ago. And maybe, for anything you’re on the fence about, which is worth revisiting in three months rather than deciding on the spot.
Step 5: Redirect what you cancel. This is the step people skip, and it’s the one that actually matters. Canceling a subscription only helps your future if the money goes somewhere intentional — even something as simple as an automatic transfer set up the same day you cancel, so the money never has a chance to just blend back into everyday spending.
The whole exercise isn’t about deprivation. It’s about making sure every recurring dollar leaving your account is one you’d choose again today, not one that’s still there out of habit.
How This Fits Into Retirement Planning
The Rule of 173 isn’t really about any single subscription — it’s a reminder that consistent small contributions to savings and investments compound into meaningful numbers over time, which is the entire foundation of retirement planning. The same math that makes a $40/month expense worth $6,920 over 10 years is the math that makes a $40/month retirement contribution worth $6,920 over 10 years. It’s the same coin, just which side you choose to look at.
If you’re thinking about how consistent contributions fit into your bigger retirement picture, that’s worth pairing with a look at your guaranteed income sources first — I covered how Social Security claiming age affects your monthly benefit in my Social Security basics guide, and you can run your own numbers with my Social Security benefits calculator.
Frequently Asked Questions
Is the Rule of 173 an exact calculation?
No. It’s a simplified shortcut based on an assumed 8% average annual return over exactly 10 years. Actual results depend on your real investment returns, taxes, fees, and whether you consistently invest the money.
Does the Rule of 173 work for any time period, not just 10 years?
No — the multiplier of 173 is specific to a 10-year time horizon at roughly an 8% return. A different number of years or a different assumed return would require a different multiplier.
Should I cancel every subscription I have?
Not necessarily. The rule is meant to help you notice and evaluate recurring costs, not to argue that all recurring spending is bad. Some subscriptions are genuinely worth what they cost you.
What’s the difference between the Rule of 173 and the Rule of 72?
The Rule of 72 estimates how long it takes a lump sum to double at a given interest rate. The Rule of 173 estimates the future value of a recurring monthly expense over a fixed 10-year period. They’re both mental math shortcuts, but they answer different questions.
Where does the 8% return assumption come from?
It’s commonly cited as a rough long-term average annual return for U.S. stocks before adjusting for inflation, based on historical market performance over many decades. It’s an assumption, not a guarantee.
The Bottom Line
The Rule of 173 isn’t a financial plan — it’s a lens. It won’t tell you exactly what your money will be worth in 10 years, and it shouldn’t be treated as gospel. But as a way to make an abstract monthly charge feel concrete, it’s one of the more useful mental shortcuts I’ve come across. I’d rather look at my subscriptions through this lens once a year than not think about them at all.
As always — I’m not a financial advisor, just someone working through these decisions myself and sharing what I learn. The examples and multiplier in this article are illustrative estimates based on a commonly cited average market return, not a guarantee of any specific outcome. For guidance specific to your situation, it’s worth a conversation with a licensed financial advisor.