You know the old adage – big things come in little boxes. Perhaps it’s the key to your new car. Or maybe a folded up $100 bill. Or maybe it’s a diamond ring promising big things in the lifetime ahead.
That’s all great. But today we’re going to flip that idea just a little. If you’ve used a budget form before, you know there are usually little boxes next to each expense category and you fill in what you spend. Some times you just know it’s going to be a large amount, like a house payment, medical bill, or car repair. Other times it’s just a little thing that goes into those boxes.
Or is it?
We talk a lot about spending leaks with clients. These are little things that we often don’t pay much attention to because their cost just isn’t that much.
- GOOD coffee: $6
- A pack of cigarettes: $7
- A quick lunch at the nearest fast food joint: $8
- A bottle of soda at the gas stations: $2
Nah, those aren’t that big of a deal. With small price tags like that, they can’t really be that big of a budget item, can they? They’re just little things in those little boxes on the budget form.
Well, let’s start with the good coffee. Personally, I have yet to find such thing as ‘good’ coffee, but some people seem to think it exists and are willing to pay for it. Maybe 3 days a week? $18 a week for 52 weeks totals $936 for a year’s worth of coffee. Hmmm.
Ok, so let’s talk to the smokers in the room. An average smoker smokes a pack per day at an average cost of $7 per pack around here. Multiply that by 365 days in a year and you’ve inhaled $2,555.
Quick lunch under the golden arches? Let’s estimate that at 3 times per week. That totals $1,248 worth of grease and cholesterol you’ve consumed in a year. And that doesn’t include the nicer meals out with family and friends on evenings and weekends. And then add the bar tab while you are out…….
So let’s move to the cheapest item on our little list. It’s a simple bottle of soda. 20 or so ounces of sugary, fizzy goodness. It’s happy drink. They’ll price them at $1.79 or $1.89, but when we add the sales tax we can easily just round that off to $2 per bottle. I come across people that will stop and buy two bottles of soda at the gas station every day. And the math? $1,460 of diabetes drink in a year.
I know. I’ve gotten a little snarky as we’ve worked through these. That’s just to make it better reading. I don’t really care where you spend your money, to be honest. That’s your choice. At least for the sake of this post, my point is that I just want you to know where your money is going so you can adjust if necessary.
In a recent class, I asked a client how much she spent on cigarettes in a year. She estimated about $500. After a little further conversation, I found she was smoking a pack a day (that’s average) and her brand was $9 per pack (that’s not average). When we calculated it out, she was flabbergasted that she was spending $3,285 on cigarettes in a year. I don’t know if she followed through or not, but that total was enough to make her swear off smoking right then and there.
Again, if you really want to spend your money in what ever way you do, go for it. That’s your choice. Please don’t hear this as my approval of every possible behavior. I’m just saying that your spending is your choice. If you want to take control of it, you first have to know where that money is actually going.
The real question is, “What else could you do with that $936 for coffee? Or the $2,555 that goes to cigarettes in a year? Or the however much that goes to whatever little thing in a year?” Suddenly what we think of a little thing really is a big thing in a little box.
It’s your choice; just KNOW how much is going where.
You can certainly do that on your own. If you would like someone to walk through that process with you, the counselors at the Center for Financial Resources would be happy to help. We can help sort out expenses, set goals, and help you adjust spending accordingly. All you have to do is call us at 605-330-2700 or go online to schedule an appointment with us.
By yourself or with someone beside you, just KNOW where your money is going in case you want or need to adjust it in the future and for the future.
written by Breck Miller
images courtesy freedigitalphotos.net