(Note:this post has been edited to fix a mathmatical problem)
Most of us are pretty careful about large purchases. We shop around and compare prices when we want a new TV, or a car, or a home. If you are smart, you may save a hundred (or even thousand) dollars here and there on these big ticket items.
But how often do you actually buy big ticket items? So maybe once or twice a year you may have the chance to be careful on a large purchase. However you have the chance to save pennies every day-and those add up. I once read “there are only a few ways to save thousands of dollars-but there are thousands of ways to save a few dollars”. That really struck a chord with me.
I called this post conscious spending, because it is about ways we dribble away our hard earned cash without making a conscious choice to do so. My favorite example is coffee (although you can look at soda the same way).
Before I became a SAHM, I had a short commute to work each day. Almost daily I would stop and pick up a cup of coffee on my way to work at the local gas station. It was one of those newer coffee set ups where you could add a squirt of coffee flavoring, and sprinkle nutmeg on top etc etc etc. I think I paid about $1.89 for a medium sized cup. It was hot, it was fast, and it was one less thing for me to do in the morning. And after all, $1.89 isn’t much money.
Now, there are 52 weeks in a year, lets assume you take 2 weeks vacation a year, and throw in another 14 days that you don’t buy coffee because you are sick, in a rush, out of town, have a snow day etc. So to be conservative lets say I bought coffee 48 weeks a year, 5 days a week.
To do the math: 48 x 5 x $1.89 = $453.60
$453.60!! On coffee! Now you can buy a coffee pot with a timer (so you can set it up the night before and have it ready to go in the morning when it is time to leave) for about $30, an insulated coffee mug for a few bucks and probably buy enough good coffee and flavored creamer for a years worth of coffee for less than $100.
Now, I’m not saying that it is somehow evil or wrong to buy your coffee on the way to work. That is fine if it is a conscious decision on your part that it is worthwhile to you and you WANT to spend your money in that way. But I was spending over $300 a year on coffee- and I didn’t even know it.
Be aware of where you are spending your money-you worked hard for it, you should only spend it on the things your really want or need.
You say 42 weeks in a year…I think there are 52 weeks in year…
Good point-my mistake.
That’s a great term – I used it in my first book, The Ms. Spent Money Guide, and again in Conscious Spendign for Couples (both published by Wiley), to refer to both being aware of the small leaks you are talking about, and being aware of your longer term life goals as you manage your daily spending. It’s much easier to skip the soda if you have that early retirement or dream vacation front and center of your consciousness.
Deborah
In one of those money-saving books, I read of an office where the people were talking and realized how much they were spending on take-out/restaurant lunches. It was around $1200 a year. Several of them decided to carry their lunches to work in paper bags for a year, and invest the money instead.
The biggest thing that helped me become conscious of my spending was to go to a cash only existence. Checks and credit cards just don’t have that same visceral real-ness to them that actual money has.
I used to walk out of the grocery store with no idea of what I had just spent–that’s impossible when you’ve got to count out the bills yourself!
Found you through the blog party! I love frugal tips, so I’ll bookmark you and come back again soon!
Blessings!
I just read a good book about conscious spending called Ms. Spent Money Guide. Pretty good book.