Saving money can be so easy as buying a Bitcoin from your phone. However, we all get so overwhelmed and confused when it comes to saving because we don’t keep track of our spendings. Every two weeks, we receive a paycheck from our employers and ready to pay off our bills but we don’t pay ourselves first. We worry about the billing companies biting our heads off before we think about our future years ahead of us. Many of us hate our employers making us work hard yet we never have the courage to quit because we don’t have any decent savings in our bank accounts and we are most likely in a paycheck to paycheck circumstances.
Making Small Changes
Your small choices can build up overtime and give you a profiting life if you have the patience. Your daily spending start in the morning when you purchase that first cup of $5 latte from Starbucks or Dunkin Donuts. Some people spend about $150-$300 on just coffee, a month. Moving onto lunch time. Do you home prepare and bring your lunch to work? If not, how much do you spend on lunch?
“the average American consumer spends roughly $53 a week or $2,746 per year on lunch.” — PracticeMoneySkills
Assuming people eat out only on lunch time and not dinner, that is the money could be put into your savings account instead of someone else’s account. Let’s say on a high note, you would have spent:
- $746 home prep vs. $2,746 eating out
- $20 homemade coffee vs. $1800 at Starbucks
If you just adjust your coffee and lunch habits and start preparing them at home, you could save about $ $2000 plus $1780 totalling around $3,780 annually. Imagine you had this kind of habit spending about past five long years, this means you threw away a brand new Toyota Corolla worth $18,900. This explains why you are riding the public transportation now. Does this make you mad? How about this money could have been put into an Index Fund and you could have earned an average of 10% compound interest on your savings for five years. You could have $31,472.74 in your bank account today if you have made this small spending habit adjustments.
What this mean? This means, you threw away a brand new Toyota Corolla and $10k pocket change to spend on your dream vacation. This is just a small part of your spending habits analysis without going into your clothing and other extravagant spending habits. After reading this, I hope you will have a whole new perspective on your spending habits and realize how few small things can add up to a mounting amount. Please make that first small step and become closer to financial freedom.
