It’s the middle of the month and you’ve already blown through your money. Sounds familiar, huh? Budgeting is no use if you’re not aware of what different things you’re spending your money on. And you might not realize that it’s the small purchases you’re making that are the reason you’re out of money.
If you’re trying to pay off debt or save up, these small purchases are probably a big factor into what’s killing your finances. These small purchases can be a cup of coffee (on average $4), eating out, books and other seemingly harmless purchases.
Do the math
While it may seem like it has a minimal effect on you financially, every time you make those “small” purchases over and over, they add up big.
Lets just say you buy a cup of $4 5 days a week. That’s $20 a week, added up to $80 a month and $960 a year. That $960 could have been put toward rent, or your car payment – or thrown in savings. Even cutting down to only one coffee a week is only about $48 a year – which is drastically more affordable.
How important are your small purchases to you?
Whatever your guilty pleasure is when it comes to “small purchases” – can you live without it? Or can you cut it back to once every couple of weeks, or month?
Maybe eating out is a habit for you. It’s quick, easy and cheap if you order of the value menu. However, even ordering off the value menu adds up quick – especially if it’s a daily habit for you. Get creative with your meal-prepping. It’s one of the biggest ways to save you money. $60 at the grocery can last you a month (depending on the size of the family) – but $60 can be spent in a week if you’re constantly eating out.
Make budgeting a priority
If you want to save money, you have to budget. There’s really no way of getting around it. Everybody’s budget is going to look different. Family size, income, location, necessities and so much more play a role into what you’re budget is going to look like.
If you don’t know where to even start when it comes to making a budget, there’s many different apps in the App Store that you can browse through. If you Google how to properly budget, you’ll find many resources that will help you create the right budget for you.
The key to budgeting, however, is to stick with it. There will always be times that you spend a little extra and “splurge” – but keep in mind, it’s not splurging if you do it regularly!
Make financial goals! First, start off with monthly goals, then quarterly goals, yearly goals and even a 5 and 10 year goal. This will help keep you on track when it comes to your finances. And remember: don’t give up!
The key to helping stop those all-too-frequent small purchases is looking at the big picture. If you write down all your small purchases from the past month, you’d be surprised how much it’s actually costing you in the long run. Make your coffee and meals at home. Only buy books used. Skip out on the $8 beer. Watch how much you’ll have at the end of the month!