I came across this post from writer Peter Shankman about how he spent almost $5,000 on Seamless, a take-out food ordering service, last year, and it was eye opening. It made me wonder how much money we spend on things that seem like no big deal, but are actually huge gaping holes in our discretionary budgets.
For me, it’s definitely all of those one-off Amazon Kindle book downloads, checkout counter magazine purchases, and the clichéd cup of overpriced coffee on the go. And, we do tend to overdo it on the takeout in my house, too (so, no Peter, I’m not judging).
To start off this year with a better spending mindset, take some time to do some self-examination to see where those extra bucks are going. Then decide if they’d be better suited for paying down a debt, bulking up an emergency fund, or saving up for a bigger splurge, like a vacation.
Here are some areas of spending that tend to be the biggest money sucks:
Cable subscriptions and entertainment. Are you paying for channels you don’t watch? Do you really need both Hulu and Netflix? What about that Sirius XM subscription that auto-renewed in your vehicle? If you’re not using these services, you’re wasting money. Even if it’s “only” $9.99 a month, those charges add up.
The closet of regret. Tell the truth: How many purchases did you make last year that you never wore or used in some way? Clothes that came off the sales rack, but ultimately weren’t a good fit, or scrapbooking materials that you never got around to cracking open. Use these misguided purchases as a lesson to change your mindset so you only buy what you really need, not just because you see a good sale.
Grocery waste. If you tend to throw out a lot of food each week because of spoiling, you’re probably overbuying, or you forget to use up ingredients (and end up ordering takeout instead — see the pattern?). Get in the good habits of using your freezer more efficiently, cooking up veggies before they spoil, planning menus around what you have in your refrigerator or pantry, and not buying in bulk unless you really will use the items by their expiration dates.
Tiny treats. This isn’t the part where I tell you to stop buying water or coffee, or give up getting your nails done. If you truly enjoy those things and you budget for them, then go for it. But sometimes we spend on things just because they are accessible, not because they really make us happy.
Once you determine where your hard-earned dollars are going, you can decide if modifying your spending will improve your finances in some way. It could be as simple as sacrificing one expense to make progress toward a goal, or setting some ground rules for yourself. Maybe it’s committing to packing your lunch for work everyday, but then allowing yourself one really nice dinner out a month. Make 2015 the year that you at least figure out where your money is going, so you can be in better control.
