I admit, I have a bad habit and I’m pretty sure there is a support group that I can attend. I’m hooked on Starbucks grande soy chai latte. Maybe it’s the name. It sounds so exotic, luxurious and expensive. Well, 1 out of three is correct. At $4.90 a cup, my sweet treat can really add up. I’m always taken aback when the barista politely proclaims the price and yet I still pull the $5 from my wallet. I feel a pang of guilt over the purchase. It is, after all, just a drink. But I convince myself that I deserve it. My inner voice says I don’t really buy it all that often and I can afford it. So why do I feel guilty?
To prove that my latte affliction did not require me to enter coffee detox, I decided for one month to keep track of my daily coffee purchases. Surely, I was making a mountain out a molehill. How wrong I was! My habit was not just “once and a while” but rather daily and often occurring multiple times a day. Generous me was frequently buying coffee for others too. After one month, I determined I was spending the equivalent of my monthly power bill on nothing more than a cup, milk, coffee, and a fancy named tea bag. I shivered to think of its’ cost annually so I did the math. My innocent $5 latte every day was costing me upwards of $1,800 per year!
We all have a hole in our pocket.
Working moms are often too tired to make supper. Telling your sweetie to pick up some take out for the family of four on the way home once a week can cost upwards of $60. That’s $3,000 annually.
Hate to pack a lunch? Even a cheap lunch out of the office can run you close to $10. Expect to shell out $3,600 a year on a slice of pizza and a drink.
At $13 a pack, the annual cost to light up one pack a day exceeds $4,700 annually. Now imagine it’s a household of two smokers. That’s a lot of money up in flames.
Are these little daily purchases worth it in the long run? Can we stop ourselves from our routines? I believe it’s all about making choices. Instead of complaining about not having enough money to pay down debts, buy new furniture, save or even go on a family vacation, its time to do something about it.
(1) Keep track of expenditures to find out daily/ weekly habits.
(2) Set a goal. Free up cash to pay monthly debts. Save for a family winter vacation. A great way of achieving your financial goals is to set up a budget; check out our blog on "Why a Budget is Necessary".
(3) Change habits/control spending. Make a weekly meal plan to avoid eating out. Buy a coffee card and load it up each week with the max you want to spend. Bring a coffee from home on your drive to work to avoid the drive thru. Pack a lunch for most of the work days.
(4) Reassess and reward yourself. It’s unlikely you will pack lunch every day for an entire year but limiting eating out to only a few times a week will still save you money.
Making small changes can make a huge difference. It’s important to recognize where your money is being spent and decide where your priorities lie. Lastly, do not forget that even small changes can yield big rewards in the long run.
Has your love for fancy coffee, "cheap lunches" and/or sweet treats worsened your debt? Are creditors calling you non-stop? Help us help you get started on the road to recovery.