Cutting back on expenses can be difficult, especially when many companies are dedicated to making it easier to spend more of our hard earned money. Throughout the day we are often bombarded with opportunities to spend amount that appear insignificant when viewed individually.
Large Purchases can be much easier to resist because something in our brain seems to remind us that although we would look fantastic driving a new car, we can’t afford it right now. However the small things, with costs that appear trivial, do not seem to trigger that same useful response. Small expenses may not even trigger a second thought, and if they do they tend to be very easy to justify. As small daily expenses are often overlooked, here we will look at what they end up costing us each year, and what some simple (and not so simple) alternatives can save us.
1) Skip the morning take-out coffee
When we think of fancy morning coffee companies such as Starbucks often come to mind with their delicious concoctions that seem to make getting out of bed and going to work slightly more manageable. Lets be honest, if we haven’t had our morning coffee are we really thinking about how much money we could save if we skipped that $4 latte? No! It’s much easier to think about with some caffeine in our system.
Assuming we buy one coffee a day, if this coffee is from Starbucks or a similar place, we end up spending around $1456.00 a year. If we switched from Starbucks to Tim Horton’s (yes, they have lattes too at half the price) we can expect to save $728.00 a year (or more when Tim Horton’s does their $1.00 promotion). Now to save even more you can make your own coffee at home spending less in a year than you would spend at Starbucks in a month.
2) Pack your lunch
Since we already know that making our own coffee in the morning can save us money, we may as well save even more money by packing our lunch while the coffee is brewing. The cost of eating out usually cost upwards of $7.00, while bringing a lunch to work can cost as little as $2.00. Assuming we only spend $7.00 eating out (even though most McDonalds combos are more expensive), each time we pack our own lunch we can expect savings of around $5.00. This translates to savings upwards of $260.00 per year if we pack our lunch instead of buying it once a week. If a person who buys their lunch 5 times a week starts packing their lunch every day they can save over $1300 a year.
3) Cut back on bad habits
Most of us have a bad habit (or two) that ends up costing us money, and the less we engage the more we can save. Using smoking as the bad habit of choice, we can see the savings of cutting back. In Canada if we want to buy a pack of cigarettes it will cost us around $10. Although the amount of cigarettes a person smokes a day tends to vary, we can see the same trend in savings. Cutting back on smoking by 1 pack a week, saves $10 a week or over $500 a year. If someone who smokes 3 packs a week quits smoking completely, they can expect to save around $1500 a year.
Remember saving money can take some planning, we may not be ready to give up coffee, smoking, and buying lunch today, but making some small changes to our daily routine can pay off in the long run. After a year we can now think about what we want to do with our $1000, we can pay off some debt, invest for our retirement or save it for a rainy day.
What will you do with the extra cash?