Pinching pennies this new year to stretch your dollars further? It’s time to turn off your autopilot when it comes to everday spending. Once you step back and take a look at your spending habits, you may see how simple purchases add up to make a big hole in your budget.
“Invibile spending” is what Money magazine calls seemingly inexpensive things you buy frequently; it takes away from money you could otherwise invest, pay off debt or put toward a new trip or big appliance.
Are you making one of these 15 everyday purchases? If so, eliminate some of these expenses to free up space in your budget.
15 Common Budget Busters:
1. Daily coffee runs: Buying coffee out every day instead of making it at home can turn into a significant amount of spending over time. Try swapping your latte from a coffee shop for brewing at home.
2. Bottled water instead of filtered tap: Filling a reusable bottle with filtered tap can save money instead of buying new bottled water each time you need it.
3. Premium cable or streaming bundles: There’s not enough time in a day to watch all of those channels you’re likely paying for. You can downgrade to a more affordable option while keeping the channels that you watch.
4. Overpriced cell phone plans: Check your cell phone plan and see if you can find a more affordable carrier or a cheaper plan with your current carrier.
5. Restaurant meals: Cooking instead of eating out can save a lot of money. Try saving your trips to restaurants for special occasions.
6. Extended warranties: You may not need an extended warranty for every expensive item you buy. Opting out of extended warranties can save a lot of money in the long run.
7. Name-brand purchases: Buying cheaper brands can often give you the same quality items at a lower price.
8. Gas station snacks: Try bringing your own food instead of buying overpriced snacks on your next drive.
9. ATM convenience fees: Avoid using ATMs that aren’t in your bank’s network, and carry cash or a credit card so you can skip withdrawing from an out-of- network ATM.
10. Grocery delivery markups: Getting your groceries on your doorstep is convenient — but it can also be a lot more expensive than heading to the store yourself.
11. Monthly subscriptions: Are you paying for subscriptions that you don’t even use anymore? Check your spending statements for current subscriptions and cancel the ones you aren’t using.
12. Car washes and detailing: Consider washing the car yourself instead of paying someone else to do it. Or choose a self-cleaning bay instead of the automatic supreme wash option.
13. Late credit card payments: Credit cards have high late payment fees. Try to only spend money on your credit card that you can pay back at the end of the month.
14. Overtipping: Familiarize yourself with tipping etiquette for different scenarios before automatically hitting a tip button on every purchase.
15. Pricey greeting cards and gift wrap: Greeting cards and gift wrap for special occasions can be very pricey. Affordable options get the job done, as does getting creative by making cards yourself.
How Small Changes Add Up
Spending $5 daily on coffee may not seem like a big deal, but cutting it can translate into $1,825 per year in savings. If you put all of that same money into a fund that averages a 10% return over the next 20 years, it would grow to roughly $12,230, even if you don’t invest another dollar.
The savings and compound growth potential improves further if you look for multiple ways to save money. The reduced phone plan, deleted monthly subscription and drive to the grocery store instead of ordering delivery all add up — and could help get you closer to your long-term financial goals much faster.
Enjoy the Challenge
Creating a budget and sticking to rules can feel punishing at first, but saving money can be fun if you turn it into a challenge.
First try a one-week spending purge. Then challenge yourself to keep your expenses down for a week; then for a month. You may be surprised by how little you miss your old spending habits. And you will certainly enjoy a more satisfying balance sheet so you have some extra cash when you really need it.
