The following is a guest post from Beating Broke, as part of the 2ndYakezie Blog Swap. The topic is “What is your best day-to-day money saving tip.”
When you’re saving money and paying off debt, it’s easy to get bogged down by the bigger picture. We analyze all of our debt together, and, in effect, miss the tree for the forest. But, if we want to truly be successful at reducing our debt, and eliminating our debt, we have to overcome that problem.
In our day-to-day lives, we can’t run around focusing on the fact that we have $50,000 in total debt. We have to consciously focus on the things that we do. Every little thing. It’s the driving force behind David Bach’s “Latte Factor”. And, you’ll be hard pressed to find any good advice on debt reduction without seeing something similar.
“But, how do I focus down on something so small as a latte when I have this mountain of debt?”, you might be asking. And the answer is that it isn’t easy. It’s downright hard, in fact. It’s so very easy to overlook the mountain and say “this $5 isn’t going to make a difference in my $50,000 debt, so I can spend it on this latte.”
Here’s how you do it though. Conscientious spending. Not just on big items, but on all items. We’re all very used to analyzing big purchases. Buying a car has become a several day, and 100 questions ordeal. And, while I wouldn’t condone asking 100 questions (or taking several days) to buy a latte, I would suggest pausing long enough to think it over a little. You need to conscientiously think about each and every purchase. It doesn’t matter whether you’re buying bubble gum, coffee, or groceries. If you don’t, you’ll find yourself buying in a rut. But, if you give yourself time to briefly analyze your purchases, you’ll find yourself making smarter purchasing decisions.
Even if you still buy that latte, maybe you make it a short and spend $1 less. Or, maybe you decide just a regular old coffee will work just as well and you save $3. Buying the generic brand at the grocery store can save you quite a bit each shopping trip. And if you pair all those little choices together with a good budget, you’ll find yourself with surplus at the end of the month that can be added to your debt payments. $1 or $3 may sound like small fries, but over a month, that could add up to $100s!
I leave you with my day-to-day savings advice. Conscientiously think about each and every purchase. Take a few seconds to break out of your spending rut and see if you can find a way to save just a little bit on each purchase. Don’t do a “no-spend” month. Do a conscientious month. I think you’ll find the end result to be the same, and you won’t have had to “starve” yourself off of something all month long.
Cut down on impulse buying! And I agree, cut down on all spending not just the big ticket items. Every dollar saved is a dollar earned and a dollar today is worth 10 down the line.
I am not a huge spender, but I have found if I don’t go out, I don’t spend. So I consciously think “do I really need to buy this today?” before I head out the door. If I am tempted by Starbucks, I remember that I have all the fixings at home, even though it may not taste AS good.
I’ve been driving a lot lately, so this one is fresh on the mind:
Driving like a race car driver not only wastes gas, it puts strain on the moving parts of your car, and isn’t at all safe. While I can understand some intentional speeding on the highway (come on, we all do it) it doesn’t make sense in the city. Any time you start gaining ground/speed you’re sure to just hit another light.
@moneycone For sure, the future value of the money you save can be taken into account.
@everyday tips Sounds like a good reason to learn how to make it as well as starbucks, at home.
@jt mcgee That’s a great example of something that we don’t consciously think about often. Even if we aren’t actively spending money by buying something, we are still spending it by our actions.
I totally agree! Small changes is definitely a good way to change habits.
Thanks for an interesting article, and a great reminder that all of our small money-saving strategies can add up to big results!
I must admit, I have discussed this same issue, but called it mindful spending! It definitely works. Excellent treatment of this important topic.
Conscientious spending, mindful spending, or tighter’n bark on a tree, it’s all good when it comes to forking over hard-earned cash. More than once I’ve taken out a dollar bill while walking to the snack vending machine, and put it back in at the last minute, going instead for the free tea (used to be coffee, but I’ve cut down a bunch).
Conscientious spending is a must if you want to have any chance to be financially independent. We are bombarded with pressure to spend money everyday and if we just think a little about it, we can all save so much money. It’s so easy to flip on the auto pilot and spend spend spend. Great advice!!!
I agree with this sentiment exactly. As we detail at our blog, we have a net worth of negative 120 grand. (thanks to student loans and up until a year or two ago, bad decisions on our part as well). This isn’t Staples and there is no easy button to get rid of debt (particularly student loan debt which cannot be discharged in bankruptcy), but I do believe that if you are patient the results will come. Here’s hoping anyway!
I remember reading something similar to this in Ramit’s book, I Will Teach You to Be Rich, recently. In the same spirit, I make myself a list of subtractions to do in my head each month on the cash obligations I have. This makes me more aware of how much I’ll have left over for spending, if any, at the end of the month.
Terrific advice. I manage my expenses pretty well, but will give this a shot to improve my savings game. Good job and thanks! 🙂 Between a latte and car, should your conscientious mindset differ because one is so much more expensive than the other?
My 20 year old son has only had a ‘real’ job for just over a year while going to school. It is bringing him some nice coin and he likes it. It also lead to some free wheeling spending habits that a little bit of advice has helped redirect him a bit.
One of the things that drove me crazy was all of the loose change that was all over the floor and forever being run through the washing machine. I gave him a change jar, that counts the money as it is deposited, for Christmas. It was fun so he cleaned up the change and watched the jar fill.
Last week he brought the jar to the bank, where they ran it through their counter for free, (note coin counter in the grocery store can charge up to 10%.) He had about $75! This week he has taken vacation time to volunteer at the local Boy Scout camp for a week. He has his spending and gas money from the change jar. His volunteer work gives him a tent to stay in and food for an inexpensive time with friends. Good choice Son!
Karen – great story! Looks like the money (and time) is being put to use very well. Thanks for visiting!
I am really a savvy person, when I go shopping somewhere else I’ll keep on asking for lower prize, that’s what I make myself fun. You really made a great article about saving money and I learn a lot of things here. Thanks much!