Examining your spending habits isn’t necessarily an easy task. As with most difficult issues, the first step is usually the hardest – and in this case, the first step is coming up with a budget. That means, you have to closely review all your expenditures, and that includes your seemingly small daily spending habits. Don’t be fooled into thinking that will be easy. Often times, cutting back on those items is harder than finding ways to cut costs on the more expensive bills and items. But a few tips will put you on the path to saving money and cutting out those unnecessary small items.
Less is More
Small day-to-day expenses quickly add up. Things like a daily coffee, going out to eat and entertainment might not mean much to you now, but at the end of the year, those expenses could add up to thousands of dollars. Consider the following American consumer statistics from the website MentalFloss.com:
$500 million: Average amount spent each year on golf balls, according to Forbes magazine.
$11 billion: Average amount spent per year on bottled water, according to Beverage Marketing Corp.
$11 billion: Average amount spent on coffee, according to Franchise Direct/North American Organic Coffee Industry Report.
$17 billion: Average amount spent on video games, according to NPD Group.
$65 billion: Average amount spent on soft drinks per year, according to the National Soft Drinks Association.
$117 billion: Average amount spent on fast food, according to Fast Food Marketing.
Of course, there’s a simple solution to all this: don’t spend money on items like that unless it’s necessary or a rare treat. Make a pot of coffee at home and take it with you to work. Drink tap water instead of bottled water. Cut out the soft drinks. Eat at home more often. Buy used games. The list goes on and on, but at the end of the day, those costs could add up to more than $20. Times that by 365 days, and you’re suddenly saving thousands of dollars.
Look for Savings
People and businesses want to help you save. According to Consumer Report, one of the essential money savings tips is to uncover all discounts. This requires a bit of effort on your part. There are websites like savings.com that help people find discounts on everything from auto maintenance to spa treatments to clothing. Go to a business’ website for additional discounts and sales. Look for coupons, both in print and online.
There are ways to save on bigger expenditures, too. If you are planning a vacation, doing a little extra research to find the best deals can end up saving you hundreds, or even thousands, of dollars. You can also save money on items like electronics that offer extended warranties.
Include Small Items in Your Budget
This is an easy one to overlook. When coming up with a budget, it’s not uncommon to simply set aside a chunk of money for “entertainment.” This includes everything from going out to eat to a night out with your friends. But have you accurately gauged how much you actually spend on those luxury items? Instead, carefully go through a month’s worth of expenses, and itemize how much you spend on things like fast food and lattes. From there, find items where you can cut costs. That will give you a more accurate picture for your budget. Once you’ve determined that monthly cost, take the money out of your bank account. That cash is now how much money you can spend on entertainment and/or luxury items for the month.
It’s too easy to charge everything, plus you can’t spend what you don’t have. If you’re out of cash or running low, then you’ll have to skip that trip to the movie theater and stay in instead.