Content provided courtesy of USAA | By Chad Storlie
I absolutely love coffee and I love pastries almost as much. One of the things that I loved to do on trips was visit new bakeries and cafés for coffee, sometimes as much as 2-3 times a day. One day, after a bill for around $15, not bad for 2-3 cups of coffee, I asked the question of how much was I spending on coffee and pastry. It turns out, quite a lot over just a few months. After that, I made a simple set of rules so I could avoid some of the most expensive of these small expenses that really add up over time.
Here are 5 rules to help you save money on those little things:
Add Them Up
Take the time to add up three months of expenses of lunch, coffee, snacks, refreshments, etc.; anything that is outside of your normal monthly budget. Determine the total expenses and then rank them from most expensive to least expensive. What you want to find is frequent, high-cost items that you can reduce or substitute so you can save that money.
Go With the Simple Fixes
One of the really high areas that I found was buying water when I was at the airport, running errands, etc. Today, I carry an empty water bottle and refill it. This has saved me a tremendous amount just at the airport alone. Simple fixes are your easiest way to reduce expenses because it is not a major change to your lifestyle. Your simple fixes can include carrying kid’s snacks in the car so you don’t have to run through the drive through or make multiple stops at a convenience store.
Find a Close Substitute
Morning coffee or the salad at lunch is some of the most common and favorite of these routine daily expenses. Sometimes, instead of the vanilla latte, we can get a regular drip coffee or you can get salad and then bring vegetables and dressing from home. All of these efforts give you some of the satisfaction of meeting your needs in your daily routine and save money.
Reduce, Don’t Go Cold Turkey
Some people may be able to just stop having coffee or going out to lunch. I am not one of those people. I kept my passion for coffee and pastries, but now I only go once a day and I stick to inexpensive items on the menu.
Put the Savings to Use
Once you have done your new savings approach for a month, add up the new expenses and compare them to the old. Take your savings and set up a new payment with that amount to pay off debt or take the addition and put it monthly into your savings account. The point is to not let the savings escape, but use the monthly savings to meet other financial goals such as debt reduction and retirement.
Managing the small expenses are hard, because they tend to sneak up on us and be “too small” to think they make a difference in the big picture. Small expenses are vitally important because they do add up and make a difference. Find simple fixes, find a substitute, reduce your daily expenses, and put the savings to use. All of these efforts over time will make a difference.