I seem to be doing alright, but I've noticed my smaller typically needless expenses are piling up around me throwing my budget off and I can't seem to figure it out.If you're like the person above and have a hard time getting that final grip on your finances this is definitely the place for you. Most people today are unsatisfied with their finances for one reason or another, but a lot of these issues seem to stem from large amounts of needless spending on a regular basis. A coffee here. A donut there. A reward for having a good spending week....after 3 days. That one pair of shoes you've had your eye on forever that just went on sale. Whatever the reason, there. is. always. a. reason. to. spend. money. On this post we'll explore some of the reasons NOT to spend money. Once we get both of these concepts in line hopefully it'll be a little more clear where your loyalties lie when it comes to your spending habits.
The ProblemBack to always having a reason to spend money. We live in a consumerist society. Our entire economy is based on the simple fact that people keep spending money. There will ALWAYS be another sale, another good deal and another new item coming out. This is probably the most simple concept we're missing as a collective group. Everybody needs the next new thing and they need it now now now. This same concept can be applied to something as simple as a cup of coffee. A typical cup of coffee costs around 50 cents including the per cup price of the coffee maker, creamer, sugar, and cup over around a 5 year period(the life of your coffee maker). Now substitute that cup with a cup from starbucks each morning and you're looking at about a 500% increase in your coffee budget. If you do this to multiple aspects of your life you're redoing entire sections of your budget. That's a problem. One we all face and have a difficult time avoiding. Let's see if we can do something about that.
The SolutionHonestly there's no easy way to put this, but there's no simple answer. You're not the only one dealing with this problem and it will continue to loom as an issue you could face. We can do our best though, with a couple easy steps:
- Always be looking toward the future.
- Setup a year to year budget goal, a month to month budget goal, and even a week to week budget goal to keep you on track and show you at every second where you want to be on your financial spending goals.
- Reference this often. You can use anything from Mint.com to a google sheets doc to track your progress, just make sure you know where you stand. This will be one of the primary reasons you'll say no to that next easy purchase. I typically check mine 2-3 times a day to remind me why I do the things I do.
- If you're saving for no reason then what's the point in saving? You might even ask yourself this question. There's always a reason, especially if you're here reading this. Keep that reason at the front of your mind. "$30 to that new purse!" or "$150 for that new car part!" maybe "Only $3000 left for that new home!". Whatever it is make it a point to reference it. It'll make it easier to say no.
- From the conversation a little earlier, remember there is always a reason to keep spending. You don't need another one of those. You need a reason to stop spending. The items will always be there. There will always be another holiday sale. These reasons are typically inflated due to a gimmick like a short sale or absorbent arbitrary price drop. If you didn't know the previous price off the top of your head before you noticed the sale you probably didn't want the item before it was tossed in front of you.
- Nobodies perfect. We don't pretend to be (most of us anyways). We add a little leeway in our budget for random expenses and we don't like to keep doing things that aren't getting results we want. When we take away that instant gratification of the easy purchase or "great deal" we start to crave it. Give yourself that cup of coffee on a hard day. Go out for dinner once a week. It doesn't matter what it is, but I'm here to tell you that it's fine to spend money. What's not fine is spending all of it, slowly, all the time. On that, make sure to log this information. Jot it down in your phone or put a tick on the calendar so you can reference back to it when you starting craving that next binge.
- Once that's under control, set monthly or even weekly spending goals and make it your lifes work to keep your spending under a certain point for one week, then two weeks, then make it a habit. Once you start hitting these goals, tell people! This is exciting stuff. It's feels good to know you're doing well sometimes.
- This post may be quick and to the point, but once you hit this point several months or years down the line, you don't need to give up. From here it becomes more like a game than ever. Try going a full month using your one week spending habits. Cut out starbucks for as long as possible. Look into different ways to make shopping at starbucks more affordable. Get starbucks points, punch cards, money back cards. Reuse old cups for a slight discount. Make it fun!