Small Expenses Can Add Up to Overspending Issues

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Whether you are looking for ways to save on your monthly spending or you keep blowing your budget each month, but you just cannot seem to figure out why, it is important to become more aware of your small expenses and how you are spending money in little ways that you may not realize. This money can add up quickly. Recently, I looked up to a spending report, and I was shocked at how much I had spent in my two problem categories — eating out and books.

It made me take a step back and really evaluate what my priorities are.

What Are the Little Purchases in Your Budget?

The one that is talked about most often is coffee. However, it could be the soda you buy at the convenience store each morning, or the money that you spend on buying a new book every few days for your ereader. It could be the in-app purchases for a game that you are addicted to, or the amount you spend on eating out each day. These are things you may not include in your budget, because the amounts do not appear significant. It could also be something that you do not include in your budget because you do not want to spend money on it anymore, like eating out. You may be telling yourself that you are going to stop, going grocery shopping and then still eating out and wasting even more money.

How Much Are Your Little Purchase Costing You?

It is important to find out how much you are really spending on specific categories.

This can be done in a few ways. One is to write down all of your spending based on a specific category for an entire week or month. Physically writing it down or recording it on your phone will make you more aware of what you are spending and why. Another way to monitor it is through your budgeting app.

Mint will send you a report of your spending by category, but any budgeting app can show your spending over the last few months. If you are using cash, you can either record it manually or keep the receipts to look over at the end of the week.

How Much Is Too Much on Small Purchases?

Once you realize that you are spending around $70 a month on coffee (about the cost of one cup a day), and that adds up to $840 a year, you can determine if that sounds reasonable to you to spend on coffee each year. However, if you are barely getting by that can make a huge difference in reaching goals or making it easier to pay rent. Similarly, if you are eating out every day for lunch at work, you may feel that you are justified in your spending. However, you may be surprised at how much it is adding up. If you are really frugal and just get a value meal for lunch each day, you will spend around $6 a day, which adds up to $30 a week, and ends up being $1,560 a year or $130 a month. However, if you go out to eat a nicer restaurant and spend about $10 a day, that adds up to about $216 a month or $2,600 a year.

Looking at the overall numbers, you may see some that stand out to you as being too much money.

But too much money really is dependent on your current situation. If you are struggling to make ends meet, then even $6 a day can make a big difference in your budget. If you are out of debt and saving toward retirement, you may be able to afford going out to eat each day. The key is understanding your current situation.

Does Your Spending Match Your Priorities?

Finally, you should make sure that your spending matches your priorities. When you realize how much you are spending each year, then you can determine if you really want to spend that much money on it or if you have somewhere else where you want to spend your money. This is one reason why budgeting software or apps are so nice to use. It is easy to track your spending and see the bigger picture. Seeing the amount you spend each year can really help motivate you to change.