Being able to save money takes quite the focus. But for the majority of people, the focus is, well, out of focus.
And that isn’t to suggest they don’t want to save money or don’t know how, but rather more of a propensity to take stock of the large scale items or the big ticket ones and don’t realize the potential to save money with smaller purchases, most of which you don’t realize are so pivotal on your attempts to save money.
If you think for a minute just how much additional income is spent on things you really aren’t tracking, you’d be surprised to find that your so called budget really is doing a whole lot as far as saving you money over a longer period of time.
Something as simple or overlooked as a vacation (consider this a variance report in the form of a budget that takes into consideration a one time expense) or a daily occurrence that could include buying cigarettes, bottled water, coffee or a protein shake every day.
As much as we want to believe that our ballooned car payment or house is making or breaking our budget, you can’t overlook that the small often does as much damage just in smaller chunks that snowball in time.
That cup of coffee, whether you want to believe it or not, that $4 per day is actually costing you more than your car insurance. If you absolutely can’t live without buying a bottle of water every day at $2 per shot, you’re spending more than $700 on just water. That’s enough to make two or three car payments or pay an extra mortgage payment every year and take that 30 year house plan and cut it back five years.
Some argue that the small items are collateral damage to your finances and to your budget, and they don’t think much about them. No one is suggesting you need to start accounting for every penny, but your budget should have a larger scale line item that accounts for “extra expenses” or however you want to clarify it. Maybe $100 per month can be put aside as miscellaneous on that budget report.
No matter how you score it, those purchases do play into your ability or lack there of to be able to save money. The sooner you stop ignoring the small, the faster you’re make bigger strides in your goals of financial freedom in the form of a savings plan.
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