Beware of Little Expenses

Benjamin Franklin, one of our country’s founding fathers was also the author of “Poor Richard’s Almanack” back in the 1700s. He was known for including witty sayings in his writing, often about the importance of diligence and frugality. One of our favorite quotes attributed to him is “beware of little expenses; a small leak will sink a great ship.” We think this says a lot about our day to day finances and what can keep us from reaching our goals. We spend $5 here, $10 there, thinking it’s only five or ten dollars, no big deal.  But how many of those do you have in a day? A week? A month? Seriously, scan through your spending in BrightDime and count the number of “small” purchases you don’t give a second thought to. Now add anything you paid in cash. Can’t remember those? Knowing where you money goes every month is the key to stopping the leaks and achieving those big dreams. 

If your savings are not growing, or your debt is increasing, you may find some opportunities in your spending to help get back on track. Here are some small expenses that we often see, are any of these your “leaks”?

1. Review your food and drink habits. Eating out for lunch every day could cost easily $10-15 per day (approx $250/month). Picking up coffee and a pastry on the way to work can average $7-8 a day (approx. $150/month). Dinner out on weekends, treats during the day, well you get the picture. We have to eat but compare the cost of a little meal planning, say bringing your breakfast and/or lunch for 2-3 days a week to your current external meal costs (and don’t forget the tip!). You could easily save $100/month or more. Cha-ching $$$.

2. Convenience charges. This can cover a wide range of things: food delivery, ride services, convenience store purchases, out of network ATM fee, etc. Most of these are avoidable with a little planning ahead. It’s easy to get in the habit of paying a little extra for a little convenience, it adds up fast. Cha-ching $$$.

3. Subscription renewals / lapsed promotions. You sign up for some premium channels, Sirius XM, Hulu, Spotify, etc for an advertised low cost, or even free, promotion. You forget about the promo period and the services continue on at full price. You’ll save money every year by putting a reminder on your calendar to call and negotiate a better rate when the promotion expires. Works almost every time. And if it doesn’t? Cancel it. They’ll probably offer you a deal to come back before too long. Cha-ching $$.

4. Sales. Who doesn’t love a good sale? Black Friday! Every special holiday sale known to mankind. You buy a $10 shirt, $20 pants, $5 decorative item on clearance, because it was on sale.  If you don’t NEED it, don’t buy it and certainly don’t put it on your credit card. Unsubscribe from emails that tempt you to shop. They send them because they work and they won’t work if you don’t get them. Cha-ching $$$.

5. Account and late fees  Some banks and credit card companies charge a fee just for the privilege of having an account or card with them. Ask for the fee to be waived or find a bank / card with no fees. $5/month for a checking account doesn’t sound like much, but that’s $60/ year. And a late fee can range from $15-40 each, just for paying your bill a day late. Set reminders to pay on time or do automatic draft a few days before the due date. The savings will add up. Cha-ching $.

None of these “little expenses” seem like a lot when you look at them individually, but over  months or years of time they really add up. If you have big dreams you’re saving for, plugging the leaks (your small expenses) might be the key to getting you there even sooner.  Cha-ching $$$$!