Do you find yourself spending more money than you should?
It happens to the best and most frugal of all savers. I’ll be honest, it even happens to me! (Shhh!)
A lot of the time, it’s hard to identify where your money is going. You might have went all month without making a big purchase and yet the money is still gone.
It’s true that big purchases can quickly drain your bank account. However, what if I told you small purchases are like sneaky bank draining ninjas as well?
Personally, I don’t like to make a lot of big purchases because I like the same things. Small and frequent purchases are more dangerous for my finances.
Today’s article is all about implementing one simple money mindset hack so that you can start saving more money.
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How small purchases are damaging your finances
It starts off like any other day. Your alarm goes off and somehow, unbeknownst to you, the snooze button is continually hit.
Springing out of bed when you finally gain enough consciousness to realize the time.
No time for breakfast but you still manage to grab a $4 coffee on your way to work. Now you’re hungry and you’ll buy breakfast at work’s cafeteria for $5.
When lunchtime hits, you again, buy food at the cafeteria and this time it costs $7.
The mid-afternoon slump hits and you hit up the soda machine while your wallet gets hit for another $1.35. On the way home you’ll hit up taco bell because you’re too tired to cook anything for $4.
While this is an extreme example, it’s the reality for some people. This hypothetical day costs you an extra $21.35!
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What are the frequent small purchases you make?
Recently, I had a really bad habit of buying a $1.35 Dr. Pepper from the vending machine at work after lunch.
My habit started small. I’m away from home at work for 13 hours a day, Monday through Thursday. I started buying a soda on Thursdays as a way to “make it” to the weekend.
Before I knew it, I was buying a soda twice a week and shortly after, once a day.
While $1.35 isn’t much money to spend, it isn’t something that I normally purchase. Frequent Dr. Peppers mean I have to justify it in my budget, meaning it’s coming from my free spending money.
The funny thing is that I always wanted the soda after lunch, between noon and 1 p.m.
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Identify the “why” behind your spending
There is a root cause behind our small purchases and you need to identify the reason behind them.
Some of us eat out at restaurants because we are tired and looking for convenience. I was grabbing soda because I was bored and looking for flavor. We buy coffee on the way to work because it’s tasty and is less effort to buy than make.
Work is one of the biggest places people spend money. Work creates an environment of people who are forced to sit down and be productive. Forcing us to sit and be quiet causes us to get bored, looking for any excuse to get out of our chairs.
The people we hang out with causes us to spend or save money. Our friends have a huge influence on our finances. Having friends who only want to party or do activities that costs money will bring you into temptation to spend.
There are certain factors that are causing your spending. Can you identify why you are spending your money?
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Resolving your bad financial habit
Saying that you will stop spending money on small frequent purchases is going to do you nothing. It’s like the New Year Resolutioners who start exercising in January, but drop off by February.
You need a one for one replacement of your bad habit. A convenience issue needs a convenient solution. A tasty issue needs a tasty solution. You get the point.
I was bored and looking for flavor to cure my Dr. Pepper habit. Now I go for a walk when I get a craving for Dr. Pepper which cures my boredom. If I need flavor, I use a special powder pack that was already apart of my budget.
If you want to stop eating out so much, then you might need to do meal prep on the weekends if you are looking for convenience. Looking for a tasty meal? Find a recipe that you find tasty and meal prep that on the weekend.
Summary of changing your money mindset to save money
In order to change your money mindset and stop frivolously spending on small purchases you must:
- Identify your small but frequent purchases. Constantly eating out, buying soda, ordering coffee, etc.
- Identify the root cause behind your spending. Are you bored at work? Looking for convenience? Wanting flavor in your life? Hanging out with people who spend too much money?
- Find a one for one replacement of your bad habit. Cure boredom with entertainment, not food. Meal prep tasty food instead of eating out.
If you follow these three steps you should be able to start cutting down on small expenses that add up. It’s easy to fall back into old habits so constantly keep an eye on your spending.
One of the best ways to start saving more money is to budget better. I’ve created a free course that helps families budget and save money.
The course goes into detail about helping you budget, but also how to save more money in a family environment.