An old cliché goes, “Poor people get poorer by acting rich and rich people get richer by acting poor.” People do not realize how small day to day purchases can add up to big bucks in the long-run. It may seem like a penny here and a nickel there doesn’t mean a whole bunch, but even little amounts can add up to big savings.
The truth is that cutting back on your lifestyle choices is probably one of the only things that you have control over in your financial life. Some examples of everyday expenses are listed below. The amounts are simple values, and do not include potential interest that can be made from investing the savings.
Pack of Gum
2 per week X $1.00 per pack X 52 weeks per year = $104.00
Cigarettes
1 pack per day X $4.00 per pack X 365 = $1,460 per year
Alcohol
3 drinks per week X $2.50 per drink X 52 weeks in a year = $390.00 per year
Specialty Coffee/Late
1 per day X $3.50 per cup X 365 = $1,277.50 per year
Bag of Chips
2 per week X $1 per bag X 52 weeks per year = $104.00 per year
Eating out for Lunch
One day per week X $10 lunch X 52 weeks per year = $520 per year
Gasoline
If you drive 15 miles less per week (or 1 gallon of gas) X $2.50 per gallon X 52 weeks per year = $130.00
Round of Golf
1 round per month X $20 per round X 12 months per year = $240.00
Pair of Shoes
1 pair per month X $20 per pair X 12 months per year = $240.00
Using Another Banks ATM
Once per week X $2.50 fee X 52 weeks per year = $130.00
Going to the Movies and Popcorn for 2
Once per week X $15 X 52 weeks in a year = $780 per year
Renting a Movie
Once per week X $3.00 X 52 weeks in a year = $156.00
Give up Regular Cable Television
$45 per month X 12 months per year = $540.00
Regular Cable Instead of Digital Cable
Save $25 per month X 12 months per year =$300.00 per year
You probably noticed that some of these examples are extreme (who can live without cable right?), but they do prove a very good point. Everything you buy means money out of your pocket, and as you can see, the little things add up quick. No matter your income level, spending less than you earn is a must to becoming wealthy.
by Jeremy LaDart
http://www.moneytopics101.com
About The Author
Jeremy LaDart is an economist with a passion for personal finance. In his spare time he runs http://www.moneytopics101.com. CopyRight2005 JML Enterprises, LLC.
