Money Mishaps: Expensive Habits
Hello Money Masters!
Last week I unveiled my new series, Money Mishaps! I will be talking about 12 pretty common mistakes we make with our money. What did you think? I hope it intrigues you as much as I enjoy discussing this topic.
This week I’d like to discuss those little indulgences that can quickly become bad habits! Every once in a while, we all say to ourselves, “I work hard. I deserve a little treat.” So, we might splurge on something we don’t usually purchase. YES– you do deserve a treat. BUT– if we are not keeping track of these splurges, that is when our finances can get out of control.
Here’s an example that many people don’t realize but the numbers are astounding!
The Daily Grind:
Let’s say you stop at your favorite gourmet coffee shop every week day for your morning cup of Joe. You think, “$5 isn’t a lot of money. I can afford that.” But check this out…
5 days per week x $5.00 = $25 per week
4 weeks per month x $25.00 = $100 per month
12 months per year x $100.00 = $1,200
You are spending $1200.00 a year on coffee! That’s just one example. If it’s not coffee, it could be dining out or getting the latest cell phone upgrades.
What to do: I can’t stress this enough but make sure you have a budget and keep track of ALL expenses. Also, make coffee at home and keep the current version of your phone as long as you can. Think about what you could do with that extra $1200! You could pay down (or pay off) a lingering debt. You could start an emergency fund. You could put it in a college fund.
It’s OK to splurge once in a while on something you can afford. But the key is to know when to STOP and be responsible in tracking your spending.
Stay tuned for next week’s Money Mishap…