How to Save Money on the Small Things

If you asked someone how much they paid on rent, do you think they’d know the answer?

How about if you posed the question to a friend or family member, putting them on the spot about, down to the last dollar, what their monthly mortgage payment is? And if your friend asked you, specifically, what you sent away every 30 days to your auto loan provider, would you be able to respond accurately? Chances are, in all three scenarios, you’d have no issues giving not only the correct dollar amount but would venture to almost assuredly have that numerical figure committed to memory and surely part of your budget.

Now, try this budgetary question on for size: How much do you spend every year on coffee at Starbucks?

That one might be a little tougher to answer, other than the reasoning that you don’t know because it’s just “coffee.” The mentality behind that answer uncovers a truly larger scale issue as far as budgeting and not being able to save money are concerned.

We aren’t sweating (or tracking, paying attention or noting) the small stuff.

This isn’t necessarily a call to action to tell the average consumer they should forget about those aforementioned car payments, mortgages, rent or any other larger expense that is surely burned into their budgetary memory from one month to the next.

Rather, you’d be surprised to find out how much the average person spends on coffee, bottled water, cigarettes, take-out food (lunch, dinner) and other purchases that often aren’t considered priorities as far as adding them as a line item to your budget.

Could it be that everyone just has so much leftover money or is doing so well that those tiny buys aren’t a big deal? The economy and spending in general is up as 2017 turned to 2018, and January saw an uptick as well.

Overall, 2018 is expected to see a rise in spending versus last year to the tune of 2.5 to 3 percent.^[1]

While that number is encouraging, it doesn’t mean you can ignore spending that isn’t associated with utility bills, housing, transportation and other major line items in your budget.

Furthermore, the amount of money the average family has saved isn’t encouraging, either, suggesting that if you aren’t budgeting correctly, what money you have saved you’ll be dipping into with some frequency.

The average family savings account balance is just under $4,000 (roughly $3,800), but even more alarming 56 percent of the American population with kids under the age of 18 have less than $800 to their name, savings wise.^[2]Those number are significant not to point out the flaws of budgeting, saving and spending but to understand that even a few dollars spent over time can’t be completely ignored if you’re talking about having a few thousand (or few hundred) to your name when you are allowing thousands of dollars slip through your fingers because of habits, convenience or any other vice that is detrimental to how you save money.

Day-to-day expenses shouldn’t be the reason you’re not able to save but the reality is a few products that are common tend to get lost in the spending shuffle.

Here’s what your spending money on, perhaps without even noticing, and what alternative can be put forth to change this downward spiral of spending.

Coffee Broken: Why coffee is condemning your budget

Think about that morning commute, how you have one particular part of that routine down to a science.

Sadly, this isn’t about remembering to brush your teeth or make sure you didn’t miss a spot shaving but instead focuses on how you have that perfect home to work route mapped out so you don’t miss out on that cup of coffee, piping hot and fresh and handed to you without even so much as having to mess with the coffee pot at home.

For some, the coffee pit stop of sorts comes even after you’ve enjoyed a cup or two at home, maybe a 2 p.m. pick-me-up for that iced coffee or just another hot cup of caffeine to push through the day.

No matter how that coffee fits into your daily life, the fact remains it is costing you a small fortune.

The average Joe is spending $14 per week on that cup of Joe, equating to $728 per year spent on take-out coffee, with the average yearly cost $1,100 when it’s all said and done.^[3]

Is it convenient? Yes. Would that money be better served in your bank account? Definitely.

Granted, everyone could use a little simplicity in their life, but at what cost?

The stunning amount of money spent on coffee each year comes with it another stirring statistic that everyone certainly knows but, again, convenience wins out.

The average 16 ounce cup of coffee on the go is just over $2.00 ($2.10), but that same 16 ounces costs you a staggering 8 cents per if you buy coffee at the grocery store and brew it at home.^[4]

What is the solution? Here’s one for starters: make coffee at home, get a to-go cup of it after the first one you have in the morning while you’re getting ready and have it insulated, heated and ready to sip throughout the day.

You’ll be a thousand dollars richer by the end of the year, and still won’t be missing out on that coffee routine, minus the drive-thru window.

Food Critical: Why take-out dining is death blow to your budget

Much the same way coffee from a barista or coffee house makes life easier on the go, the same could be said for take-out food, specifically avoiding packing a lunch the night before work so you can “brown bag it” the next day or heading home from a busy day of work and not really feeling as though cooking dinner is going to do much for your stress or that headache on the horizon.

But you can combat all that prep time and the after-school or work activities that would deter you from dinner, particularly if you track how much you end up spending on lunch and dinner, take-out wise, from one week and month to the next.

The yearly total is unsightly and probably why you aren’t including it on your budget. If that isn’t the reason, perhaps it’s the simple fact that sandwiches, soup, salads and prime rib aren’t nearly as important to you as car insurance and your electric bill.

What makes the trend all the more alarming is the total dollar amounts, which don’t really register with the average person because they don’t annualize it. Instead, they look at it as $5 here and $10 here, without much rhyme or reason to it as far as budgeting is concerned.

On top of that propensity to spend money eating out at restaurants, you also have to factor in the grocery store bill on top of that.

From the years 2015 to 2016, Americans spent more money in total on take-out, restaurant dining than they did on groceries, 54.8 billion to 52.5 billion, and that same time period saw a spike in total annual restaurant and take-out sales go over $3,000 per year.^[5]

Consider that $3,000 per year, on top of the grocery total, and you’re basically doubling up on food expense.

Rather than be the victim of a budgetary lapse thanks to take-out containers, why not consider grocery shopping and meal prep on the same day. You talk long and hard about convenience, so why not grocery shop on a Sunday and prepare food for the week, including lunches. Part of the grocery shopping also could include buying food that you can take for lunch, too. Although pre-packaged isn’t ideal, it can be used as a means to avoid overspending on lunch.

Meal prepping for dinner is easy, particularly for the on-the-go, 40 plus hour work week. You can invest in a crock pot to prepare food the night before and have it slow cooked to perfection by 5 p.m or, again, spend Sunday grocery shopping and planning, prepping for the week ahead.

If this kind of take-out and restaurant dining volume describes you to a tee, you’re not alone.

Here’s a stat you can’t ignore: You’ll spend $70,000 in your lifetime on take-out food, with 82 percent of people ordering take out at least once per two weeks.^[6]

Bottle necked: Why bottled water is a billion dollar industry you’re funding

This statistic about spending on the small stuff is so enormous that you can’t help but lead with it.

Think about this: American spent 16 billion dollars per year on bottled water.^[7]

That, of course, isn’t how much you spend on bottled water per year, but you’re certainly a major contributor to just how this billion-dollar business lives and dies with individuals content convenience and the belief that bottled is better.

The average cost of one bottle of water is $1.45, with some as much as $3 per bottle.^[8]

Some simple math suggests that you could spend as much as $500 per year on just bottled water, provided you are spending the average and only have one per day.

And that’s only if you buy a bottle at a time.

The truth is most studies have shown that not only is tap water less expensive but the comparable makeup of tap versus bottled really isn’t much different, other than cost.

A recent study showed that bottled water isn’t any safer than tap, but yet somehow we justify spending that kind of money from one year to the next, up to 1,000 times as expensive for bottled over the tap variety.^[9]

Sure, $500 doesn’t sound like a lot, but if you aren’t keeping track of the spending, how do you know where your money is going.

The good news in all of this is that Americans drank more bottled water than soda. As of 2015 numbers, the 39 gallons of water consumed outperformed soda (38 gallons), and that trend has continued.

As much as we’re ready to celebrate the mass consumption of bottled water, you can’t ignore that if you buy one per day, you’re spending $500 per year, and if you stock it by the case, let’s say 3 cases per month at $5 each that’s another $180, so you’re inching closer to a thousand dollars on water when the tap is only a few tiptoes away from where you’re standing.

Here’s another thought: buy a $5 water bottle, clean it with soap and water every other day and fill up at work, the gym or anywhere else they have that free, filtered water available. That saves you from every time you need water, having to spend more than a dollar each time.

Yes, it’s undoubtedly convenient, but it’s breaking your budget even if it’s only $40 per month, that’s money you aren’t accounting for, and is essentially lost from one month to the next.

Spending hundreds and in some cases thousands of dollars on incidental, smaller expenses might seem trivial at the time, but the old adage of how things add up when you’re not paying attention rings truer with these purchases.

Those who implement budgets that take into account these spending habits end up doing one of two things (or both): they cut back because they realize just how much they’re spending or they find other means of having what they want but either in moderation or adjustments that eliminate them altogether.

The idea that you can’t enjoy a night out for dinner at a five-star restaurant or even a sandwich and soup at lunch in the office is downright silly. The idea that you can do that daily, not keep tabs on it and wonder aloud why you can’t save money is equally inane.

Tracking those expenses are a must. Compromising is acceptable, but eliminating them often is a necessity.

Yes, that sounds like the biggest bummer of your budget, but if you find yourself short a few hundred dollars every month, and can’t put your finger on the reason as to why, you might want to comb through your receipts and come to the realization that spending and expenses aren’t just about big-ticket items, and that sometimes size doesn’t matter ultimately when it comes to saving.