Four Important Reasons To Harp On Small Expenses

vending machine snacks

I’ve been helping a neighbor attack her New Year’s resolution to get her finances in order. She’s been writing down all of her spending for a couple of weeks and I’m helping her identify things that can be cut back. Like a lot of people, she spends a lot on things like coffee from Starbucks, movies, meals out, snacks from the vending machines, books, and other relatively small, “frivolous” expenditures.

The other day as I was pointing out, yet again, that she was wasting a lot of money on items like this, she turned to me and said, “Why are you so hard on me? You don’t want me to have any fun. Every financial book I read says the same thing you do. All the fun has to go, even down to the littlest things. It’s not fair.”

I told her that the fun doesn’t have to go, necessarily, but she does have to find cheaper sources for fun if she’s serious about freeing up more money for her other goals. People often wonder why finance people tell them to cut all those little purchases down or out. After all, the reasoning goes, if they’re so small they can’t do that much damage. There are four reasons that we harp on these little items:

They are often overpriced for what you get

Coffee from a restaurant, soda from a convenience store, a meal out, movies in theaters, and snacks from vending machines carry hefty markups. While they might be okay once in a while, making them everyday occurrences means paying that hefty markup often. Additionally, they are often overpriced for the amount you get. A candy bar in a vending machine is no bigger than the one you can buy in WalMart, but it can cost three times as much. You can find the same items or great substitutes at a fraction of the price. See number two, below.

There are usually free or low-cost alternatives

With many of these pricey expenses, you can easily find free or low cost alternatives. You can make your own coffee, buy your snacks or sodas at the store and take them to work, rent movies from Netflix or stream online, make quick meals at home, or get books from your library or used book shop. It’s so unnecessary to pay the premium prices for these items when the same things can be had for much less. You’re paying for the convenience and the “gotta have it now” factor rather than anything special about the item itself.

They aren’t necessary

None of these expenses are necessary, which means that if you’re trying to rein in your spending, they’re all fair game for elimination. If you’re choosing between your utilities and your lattes, the lattes go. You focus on things that are necessary first, and only add in the convenient, overpriced stuff when your budget can support it.

They can add up to a lot of damage

Coffee for $2.00. Snacks at the vending machine: $1.50. Lunch out, even if from the value menu: $5.00. That alone is $8.50 in one day. If you repeat that every workday, that’s $42.50 per week and close to $2,200 per year. It doesn’t seem like a lot at the time, I know. It’s “only” $2.00 or $5.00. But the cumulative damage of small purchases can be just as large as a big spending binge.

It’s not that you shouldn’t have any fun or enjoy anything. You just can’t do it all of the time and expect financial success. Financial people are hard on these expenses because you have alternatives and we know how overpriced they are. We also know that they are sometimes the hardest things to weed out because people cling stubbornly to these last indulgences. They feel like they’ve given up everything else, so they’re going to cling to that coffee. But don’t think of yourself as giving them up. Think of yourself as being smart enough to see them for the waste of money that they are and for being creative enough to find suitable and less expensive alternatives.

(Photo courtesy of myguitarzz)

This entry was posted in Budgeting, Food / Groceries, Personal Finance, Saving Money, Shopping and tagged , , , , , . Bookmark the permalink.

13 Responses to Four Important Reasons To Harp On Small Expenses

  1. baselle says:

    So here is where you have to work with yourself – its not just numbers. If I were you, Jennifer, I’d ask your friend to go deeper. Did she get her $2 of fun on that purchase? Or was it a meh – I did it because I was stressed, or others were there and bought, or I don’t even know why I did it.

    The I don’t know why I did it or figuring out how you can avoid the situation where you spend in response to stress or peer spending is the next step. Here’s where a goal for saving comes in handy – striving for that saving goal should generate more pleasure as the spending.

    I for one, enjoy my bought coffee. But I did take a hard look at the bought coffee, thought about substituting it, thought about I why I enjoy it, figured out all the ways I can get it at a discount …. eliminated nearly all other friv spending.

    In short, its a rare person who can mindlessly save. You have to put the mindfulness in.

  2. baselle says:

    Its not an all or nothing thing. If your friend counts the number of incidences, and picks her 2 favorite pleasures, then knowing that she isn’t giving up the 2 favorites could give her the uoomph to eliminate the 3,4,5 other ones.

  3. rob62521 says:

    A couple gals I worked with mentioned today they couldn’t believe how much money they were saving by…gasp!!!…cooking at home! One said she ate lunch out every day last year and then was so tired from working they ate out come dinner time too. She retired and eats lunch at home and cooks dinner and she is amazed. Another gal liked to stop and get coffee at the gas station on the way to work, but since they are watching their pennies, she’s been making it at home and bringing it and cooked a few things this weekend to save money!

  4. ceejay74 says:

    I’m reading “All Your Worth” right now, and I love the idea of setting aside 20 to 30% of income toward wants and just deciding how to spend it from there. For me, the reason I don’t buy lattes or buy lunch during the work week much anymore, or have a smartphone with a data plan, is because I want my 20-30% of Wants money to build up and go to bigger things — a really nice dinner out once in a while, a travel fund, a housecleaner once a month!

    Maybe your friend would be more amenable to giving up the silly little purchases if she knew it was so she could have much more meaningful Wants.

  5. OfeliaTConejo says:

    I was raised by parents who were frugal. I live comfortably now and can afford what I want. I never buy a Starbucks out, but do purchase Starbucks coffee in bulk at Costco, grind it, and then make it at home. If I meet a friend for coffee, I have my made-at-home Starbucks in a thermos. There are many way to save and still have what you want. Cooking at home is healthier (less sugar and salt in your food) and way less expensive. Plan ahead and you will not be poor when you are old.

  6. pen says:

    For some people, fancy coffee is one of those really important extras. If your friend is determined to keep her expensive coffee, then some other, less important ‘fun’ will have to go. Is she willing to cut out something else to make room in her budget for good coffee? Or does she have no room for extras at all?

  7. Cindi Ford says:

    It is amazing how much money you spend on these little things. I have been cutting out most of this type of spending for a couple years now and it does make a big difference. The other benefit is when I do say get a coffee at Starbucks, it is such a treat for myself instead of an everyday thing. When you pay attention to your spending, I have found you begin to appreciate the things you spend your hard earned money on much more.

  8. Gail says:

    I am constantly amazed at people’s love for coffee and what they are willing to spend on it daily. I hate the stuff which means I’ve saved oodles of money because of not drinking it. I remember once my ex-MIL asked me and my then husband when we were going to grow up and start drinking coffee? My thought is drinking coffee doesn’t prove you are a grown up, and if I have to force myself to drink something that nasty until I learn to like it seemed rather ridiculous to me. I have had the opportunity to drink some of the freshest coffee in the world too — right on a coffee farm in Colombia and it still tasted nasty but I drank it to be polite. I will admit to a chocolate love and try to buy my treats on sale and with coupons when possible.

  9. Pingback: Yakezie Carnival, Zombie Apocalypse Edition | 101 Centavos

  10. Marcia says:

    I’m always having discussions with hubby about this one. He isn’t one for going out and buying big ticket items without thought but he is a bit self indulgent on small items and because he is I sometimes go stir crazy. The only remedy I have found short of nagging him to death is to rein in my own spending. I figure one frugal person in a household is better than none but it sure would be a lot easier if he and I were on the same page on this issue.

  11. Marcia says:

    I don’t like coffee either and I don’t drink anything but water…I do buy a bottle of water if I’m out and need something to drink and of course haven’t thought to bring my own water from home. I do drink tea once in a while but hardly ever buy that out. I wonder why it seems to be a rite of passage here to drink coffee?! I’m fifty four years old and I’m not an adult yet because I don’t drink coffee??

  12. Louise says:

    I didn’t have a specific habit to cut out, rather little unrelated purchases across all sorts of categories so I took ‘pay yourself first’ to heart and gave myself an allowance. It’s a system I’ve been using for three years now and it works wonderfully! I started with about $180 a fortnight and scaled it down over time to the $60 I use now. I withdraw it in cash and it’s mine to spend as friviolously as I wish. The catch? Once it’s gone, it’s gone. I am not allowed to bail myself out unless I absolutely have to.

    I didn’t ‘give up’ or ‘cut out’ the latte or candybar instead I forced myself to choose between a bought lunch or a cute top. For me it was like training wheels for frugal thinking. I know this is long but I thought someone out there might like the idea.

  13. Deb says:

    Baselle, I love that how you phrased that – you’re not likely to “mindlessly save” (though mindless spending is very common). You have to make a conscious decision to do so.

Leave a Reply

Your email address will not be published. Required fields are marked *