As I may have mentioned before, I am a hobby photographer. I have a decent digital body, a couple of lenses, and a decent off-camera flash. As is the case with most hobbies, collecting the gear is part of experience. Golfer’s have a whole bag full of clubs, fishermen have boxes full of lures, and photographers like their lenses. I’ve done my research and I already have my next lens picked out. I have my eye on a Canon 60mm f/2.8 macro USM lens. It will allow me to do some more close-up work that I like and, at more normal focus distances, help fill a gap in focal lengths that my current lenses leave me.
I don’t know that any of that makes a whole lot of sense to any of you if you aren’t photographers. Here’s the piece that probably does make sense: this quality construct of glass, metal, and plastic will set me back around $470 plus tax and probably shipping. When I do get to make that purchase, I’m not going to particularly enjoy watching that much money flee from my account. But don’t worry, that’s not exactly an expensive lens in the world of photography.
I will probably be close to $500 all said and done. That is no small purchase – one that many of us would think long and hard about. It is a considerable amount of money. So where do we possibly come up with the funds?
When teaching financial literacy, we talk a lot about awareness and spending leaks. Spending leaks are those little expenses that happen day after day but, due to their small dollar amount, don’t particularly catch our attention. Today’s post is about those spending leaks and, hopefully, raising your awareness of your own spending leaks.
Let’s start with an easy one – energy drinks. I found the small 8 oz. can of Red Bull priced at $2.40 at the local gas station. You know, you are on your way to work or an appointment and feeling rather draggy. So you stop in for that convenient and cold burst of energy. I’ve heard of people drinking a lot more, but you keep it in control with only one can per day. For a 5-day work week, that adds up to $12 per week. This is an ongoing habit so calculate that for all 52 weeks of the year and you have now spent $624 on energy drinks.
That right there is my new lens plus a couple of filters for effects. That is also about the easiest to swallow. A bottle of pop at the same station costs $1.70. That is less than the Red Bull, but because it’s cheaper, it’s also easier to drink more. 8 bottles of soda per week certainly isn’t an overestimate for the serious drinker (of soda). Even with a lower cost per unit, it adds up to $13.60 per week and $707 per year.
That may be too high of a frequency for you, so let’s look at going to the movies. An evening ticket will run you $8.50. Only going once a week you will pay $442 in a year. But who goes and doesn’t get the snacks as well? Figuring snacks in, you will probably spend more like $14 per trip to the movie, making a total of $728 per year.
By now you are probably rolling your eyes because you get the point. Oh, but my math work isn’t done yet. A good cup of coffee/latte/espresso from one of the chains can easily cost $4.50 per cup. One cup each morning on your way to work adds up to $1,170 per year. Not a morning person? Me either. So let’s do a quick fast-food lunch. Anything more than a basic cheeseburger will probably cost you $7 for the meal. Only three meals per week will cost you $1,092 for the year.
And now it gets painful. For you smokers out there, here is one more reason to quit. Even smoking a pack a day of the cheap cigarettes at $6 per pack, that adds up to $42 per week or a whopping $2,184 for the year. That is $2,184 that has literally just gone up in smoke.
Take a moment to close your eyes and dream what you could do with $2,000, $1,000, or even $600 if you had the extra money available to you. What would you do? What would you buy? Where would you go? You already have the money. You simply weren’t aware of it if you haven’t been paying attention.
Now fear not. When teaching, I make a specific point of explaining that budgeting does NOT mean you need to eliminate all fun from your life. In fact, by defining your goals and planning your spending accordingly, you may actually find more enjoyment in life. Before that, you simply need to be AWARE of where your money is leaking out of your pockets.
Now that you know where your money is currently going, where would you rather have it go? Are you a serious movie buff and value a movie per week? That’s ok as long as your needs are being met as well. Need your caffeine fix every day? How about buying in bulk ahead of time? You can still get your fix and cut your costs by at least a third. That could mean around $200 of savings in a year. While that may not be enough to cover my new camera lens, it is a good start.
You don’t have to reinvent the wheel when you decide to get serious about your budgeting. There are all kinds of helps out there for you to use. In our classes, we have a couple of different formats for people to use to track their expenses. There are also online resources that you can use for free to help get things under control. Want a little more direct contact? Our counselors have probably seen anything you can throw at us. Stop in for a first appointment and bring your bills, statements, and any other financial information that may be helpful. We can help organize and bring you to a higher level of financial awareness.
More importantly, we can help you start down the road of achieving your goals and dreams. The Center for Financial Resources is here to provide confidential and respectful help for anyone who would like help. You may not even be in crisis yet, but if you see it coming, let’s work together to make sure you don’t end up in financial crisis.
Go ahead, make our day and make yourself aware. You just might end up making your own day.
written by Breck Miller