About once a year I go through a phase—a deliberate phase—in which I evaluate our family finances to see where we’re doing well and where we aren’t doing so well. I especially look for places we are spending money we don’t need to spend—bills that are too high, subscriptions we no longer need, and all of those little money-wasters that eventually add up. And over the years, I’ve collected quite a list of ways that we, and perhaps you, waste money. Here are some of them:
THE DAILY LATTE
I read quite a few books on personal finance and there is a trend I have noticed in recent years: Every book now uses Starbucks as the negative example of financial management. The math really is that simple: $5 per day for that latte, multiplied by 365 days in the year, adds up to an extra mortgage payment or two. And if both of you go every day, the damage is doubled. Consider brewing at home, or at least sticking with the brewed instead of specialty coffees.
There is something in all of us that longs to keep up with the neighbors—to have the things they have and to do the things they do. But it’s a fool’s game, of course. Envy and jealousy are never satisfied, and the more you have, the more you’ll need. It is far better to learn contentment and to stop fooling yourself into believing that more stuff will bring more happiness. A quick audit of your finances may show all the different ways you are trying to keep up and get ahead of your neighbors. It’s wasted money.
CLUB PACKS AND JUMBO SIZES
Club packs and jumbo sizes offer great value, but only if you can consume it all before it expires or is otherwise ruined. The stores have a knack for knowing exactly what products you are likely to buy in such quantities that you cannot possibly get through them before they go stale (or melt or wilt or grow mold or…). Buy the toilet paper, but be careful of the crackers, flour, or vegetables.
Just like jumbo sizes, coupons can offer great value. Who doesn’t want to save a few dollars or even a few cents, just for waving that little piece of paper? But coupons fail you when they are for something you are buying only because it seems like a shame to miss out on such a good deal. If you wouldn’t buy it anyway, your savings come to exactly nothing. If it’s brand name but still more expensive than the generic, the same is true. It’s important to be honest with yourself: Sometimes you just can’t afford to save any more money. And while I’m on the subject of shopping, don’t buy the licensed shampoo or toothbrush or band-aids—you are paying extra for the picture of the princess or superhero.
Source: Crosswalk | Tim Challies