5 Small Ways You Spend Money That Add Up Quickly
It’s easy to justify small spending; a few dollars here and there doesn’t seem like a big deal. However, even small expenses can add up quickly, and this is especially true if you make these purchases regularly or you don’t keep track of small spending. Sometimes simply taking the time to write down all of your spending each month (or even each week) can help you spend less, but another good tactic is to consider how easily small expenses can add up.
Most of us consider our expensive monthly bills such as our mortgage and utilities when we design our budgets, but smaller expenses can derail a budget if they are ignored. Many Americans don’t keep a budget at all (according to Gallup, only about one in three Americans create a detailed budget each month,) and without a budget, small expenses can easily fall through the cracks. Here are five small expenses that can add up quickly.
1. Extra car trips
Currently, gas is pretty affordable. According to AAA, the average gas price at the end of January 2016 is $1.822 per gallon for regular gas. This is a significant drop from the average one year ago ($2.038 per gallon). Most people would agree that car travel is fairly affordable right now when it comes to paying for the gas itself. However, extra car trips can easily cost you unnecessarily if you aren’t careful. While the cost of gas is low now, it won’t stay that way forever.
If you frequently go to to the grocery store without a list, forget something at home, or forget to do errands while you are out, and then you later have to go out again, your gas bill can add up. If your car gets 20 miles to the gallon, and you make 40 miles worth of extra trips in a week, that would cost you an average of $3.644 per week, or $189.488 per year (and that’s if gas prices stayed low!)
2. Breakfast on the go
Many of us eat out for lunch once in a while during a busy work day, or when we have an important meeting that takes place at a restaurant. These lunches can easily add up to a significant extra expense, but if you expect them, you might include them in your budget. Breakfast out on the other hand, is often necessary because we are running late and we don’t have time to eat at home. According to the USDA, nearly a third of every U.S. food dollar earned is spent on eating out services.
While you can certainly pick up breakfast cheaply at a fast food restaurant, if you have to do so several times a week (or even each month), this expense will add up quickly. If you spend even $3 once per week, that would equal $156 per year. If instead of grabbing breakfast from a fast food restaurant, you bought granola bars for $2 and a bag of fruit to grab in the morning, you would save money.
3. Wasted food
Spending money on food that you are never going to eat seems like a pretty awful idea. According to the The Natural Resources Defense Council (NRDC), 40% of food in America goes uneaten each year (which equates to about $165 billion each year in wasted food). The loss of this food happens in many different situations; in regards to food that you yourself might be wasting, much of it is probably happening at home. Americans throw away about 25% of the food and beverages that they purchase; that means the average family of four loses $1,365 to $2,275 annually. While throwing away leftovers or tossing out expired food might seem like a small expense, if you do it regularly, you will end up wasting a lot of money. The NRDC recommends making smart shopping decisions, keeping expiration dates in mind, cooking what you will eat, and finishing leftovers as a way to save money and waste less food.
Entertainment spending is a big part of Americans’ paychecks. According to the Bureau of Labor Statistics, the average annual expenditures for entertainment in 2014 was $2,728. It’s great to be entertained, but that is a lot of money to spend each year. Entertainment spending easily gets out of hand because the individual amounts are usually small. Spending $9 to go to a movie seems reasonable, and even $40 on a concert ticket seems fair if you really like the band. However, entertainment costs can add up quickly. If you want to have fun without spending so much money, consider watching movies on Netflix, having a game night, or getting together with the guys to watch the Superbowl.
5. Late fees and unnecessary extras
Late fees can be avoided. A $4 fee for a late movie doesn’t seem like too much, but when you factor in the fact that you paid $3 to rent the movie, paying a late fee is ridiculous. Using Redbox is a great way to have less expensive late fees, but in general, late fees are a unnecessary waste of money. If you frequently face late fees because you forget to pay your bills, you can enroll in automatic payments. These can be set up to deduct automatically from your checking account, or you can use a credit card if you are worried about insufficient funds.
Unnecessary extra expenses can also add up quickly. Many electronic items (as well as some other items) come with optional warranty plans that you must pay for if you choose to add them. These warranties are sometimes necessary, but often they are worseless (take for example a $20 watch that can include an optional $15 two-year warranty.) Most stores allow returns for a certain amount of time; usually the warranties are a waste of money unless you are making a big purchase.
Small purchases or expenses seem innocent enough, but if you make enough of them, or you forget to keep track, they can quickly add up and leave you way over budget.