When we try to cut our expenses and be a little more frugal, most people start with the bigger ticket items. The theory is simple and logical. Cut one big expense and it can cover 10 different ones. While this is great, the problem is that we almost always stop thinking about the little expenses because we pay way too much attention to the large ones.
If we look closely, we will realize that we shouldn’t be thinking about spending less on big expenses but rather on small expenses that just keep repeating!
I actually never realized this until recently, when my wife all of a sudden added eating frozen yogurt to her favorite activity of all time. Every night nowadays, she is wondering whether we can go out to buy a cup of frozen yogurt. At $5 USD, it’s really not that much money but if we just think about it, we could be spending $150 a month translating to $1800 a year! This means that without 1 year of frozen yogurt (which should be quite easy because we’ve never had any for the last 30 years), we could buy a TV and still have money left over!
Look. I’m not saying that we should stop all daily, smaller expenses. I just want to make everyone realize that the small, repeatable expenses add up really quick! Watch those expenses, or we might as well forget about being frugal.
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{ 7 comments… read them below or add one }
Absolutely right – it is like having a latte on the way to work, buying something from the snack machine or getting into the habit of buying take outs. If we can change our spending habits just a little bit, it can make a huge difference.
David, I’ve written on this in the past as well. Sometimes we can’t see the forest for the trees.
My article is called “Dollars Before Cents”
http://www.nodebtplan.net/2008/02/11/dollars-before-cents/
And yea, that frozen yogurt stuff can get expensive!
Isn’t this referred to as the “Latte Factor?”
My sweetie was hooked on froyo for a while too. After some serious consumption (3x per week at $5 each serving) for about three months, she finally decided that it was too expensive a habit to maintain. She hasn’t picked it up again which is a good thing.
I know what you mean about those small things adding up quick. I try to explain this concept to my wife, who likes to watch movies in the theater frequently. Everyone once in a while seems fine, but it can really add up over time.
I have to keep myself away from the coffeeshop myself. I’ll spend 20 bucks in a week there.
I totally agree that the little expenses do add up over time. Whenever you are thinking about buying a snack from the vending machine, stop, and put the dollar ( or your quarters) back in your pocket. Instead go drink some water. That would get you going until lunch or dinner time..
A frozen yogurt habit might cost us more than money. I suppose it’s healthier than ice cream, but the calories will add up night after night.