by Stacy Francis, CFP®, CDFA
I heard on the radio today that the average Starbucks customer spends close to $6 per visit, 18 times per month. That adds up to a whopping $1,296 per year, which he or she otherwise could have invested. Now, this is not a Starbucks rant (I’m a huge fan), but rather an attempt to make you aware that the small expenses really do add up. In the metropolitan areas of the States, it is not unusual that lunch runs $10+ per person, not including tax and gratuity. Five lunches per week at those rates come down to $50+ per week, or more than $2,600 per year.
If you are serious about your financial future – especially if you strive for financial independence -- then your small expenses provide an excellent starting point. If your goal is to save another $3,000 per year, chances are you can do this quite easily by bringing your own lunch or making your own morning coffee. Or you can compromise and cut back rather than exclude (this is usually the best way to go anyway, as abstinence typically causes nothing but cravings). When you take charge of your finances and your future, you can align your life accordingly, and find that you have all kinds of room in your budget that you never would have thought of.
So keep a spreadsheet, or a notebook, or a list in your iPhone – whatever works for you, and write down every purchase you make over the next month, no matter how small. Exclude nothing, not even parking, gas, and other things you hardly consider spending. You’ll be surprised at all the corners you can cut!