Is ?Harmless? Spending Killing Your Budget?

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SpendingWhen standing in line at the grocery store,
how frequently does your eye wander over to the checkout counter racks?
Suddenly, you develop an unstoppable craving for a chocolate bar, or decide to
quench your thirst with a cool bottle of water instead of waiting to fill up a
glass from the tap at home. Maybe your curiosity is piqued by the headlines
screaming from the tabloid magazine? You grab the item of interest and throw it
into your cart. After all, what’s a few more dollars? You can afford it, right?

These decisions may seem harmless, but
those ?few more dollars? can really add up. Often, it is the small expenses in
life that combine to knock
your budget completely out of whack
.

The Coffee Example

Gourmet coffee often gets picked on in
examples of frivolous spending, but for good reason ?? many people spend far more than they realize
on it. It is a great example of how little expenses can get out of hand
quickly.

An average cappuccino or latte costs about
four bucks. Let’s say you pick one up on your way to work each day from that
quirky cafe around the corner from the office. Four dollars doesn’t seem like
much at first, but what about $1,000? That’s a lot, right? Well, that’s how
much you’d spend if you repeated your four-dollar habit every work day for a
year. It’s definitely a large sum, especially when you think of how much less
you would spend by brewing your joe at home, which costs pennies per day.

To really hit home the point, consider
this: If you took that $1,000 and, instead of spending it on lattes every year
for your 40-year career, you invested it with an annual rate of return of 8%,
you’d have a healthy retirement
fund
of $250,000.

Other Small Mindless Expenses

Coffee is a prime example, but there are
many other small purchases that add up over time. Do you smoke? That’s a hefty
sum of money thrown out each day. What about account maintenance fees that crop
up on credit cards, bank accounts and prepaid debit cards? Those can also add
up quickly, and there are many financial institutions that have done away with
them. Are you paying for 500 cable channels but spend most of your free time
surfing Netflix? Can you read your magazine subscription online now instead of
paying for it each month? How often do you pack your lunch instead of going for
take-out?

Write down these ?harmless? expenses for
the next month ? you may be surprised how quickly they add up!

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