Small amounts, over time, can add up to large amounts if you don’t keep track of them. Even those of us with the best intentions can overlook costs that seem insignificant in the moment.
This is especially true in today’s world, which
makes it so easy (and tempting) to make purchases without even taking out your wallet. After all, tapping your card or hitting a button to buy something feels like less of a commitment than handing over cash or writing out a check.
But, the reality is that the more convenient the process is to spend money, the easier it is to run up a tab of small costs that can chip away at your account balances. Here are five tips to help you prevent seemingly trivial costs from diminishing your funds.
1. Differentiate between wants and needs
While not all of your spending has to be strictly on things you need, check your budget to understand exactly how much money you can spend on things you want. And be honest with yourself about the difference between a want and a need. A need is something like food and rent; it's a true necessity. A want is something that is not necessary, but would make you happy, like buying a coffee in the morning.
2. Pace yourself with “treats”
Speaking of wants, you might treat yourself to small delights like coffee runs, takeout meals or quick pops into your favorite store “just to see what’s there.” While it’s completely OK (and even encouraged!) to spend money on things that bring you joy, be mindful of how often you’re indulging in small treats. These “treat trips” can quickly add up.
Another type of treat that’s easy to lose sight of is subscriptions. These days, there are subscription packages for everything: entertainment, clothing, food, software, music, fitness, beauty… even social media! Review your transactions often to ensure you’re not paying for subscriptions you don’t use or paying for duplicate accounts.
3. Conduct regular check-ins
Social plans are often one of the biggest culprits of draining our funds. If you’ve ever reviewed your transactions and thought, “I spent how much on dinner with friends that night?” you’re certainly not alone. If your social life is getting too expensive, consider pivoting away from restaurants or concerts and plan more affordable activities, like spending time outdoors or popcorn and movie nights in.
Remember that even when it doesn’t feel like it, you are in control of your money (and not the other way around). By asking yourself, “Is this a purchase I’m making consciously, or am I spending on auto-pilot?” you’ll experience less guilt and put yourself back in the driver’s seat.
4. Focus on long-term goals
It can be hard to be disciplined about saying no to a night out, so stay focused on why you're saving. Regardless of what your long-term goal may be – whether that’s aiming to buy a new car, purchase a home, go back to school or get married, for example – remember what you’re working toward as an incentive to spend less in the moment.
5. Be prepared for uncertain times
Even if you’re not saving up for anything specific, it’s wise to be prepared for elements beyond your control. The practice of “saving for a rainy day” can help you tackle unexpected expenses, like storm damage or a surprise medical bill. Emergency funds can also help you cover rising costs during periods of high inflation, when your routine expenses (i.e. your needs) are harder to afford.
No cost is too small to account for when looking at your overall financial picture. Not sure where to start? We suggest checking your balances to figure out your true starting point.
