You say you know where your money goes, and you don’t need it all written down to keep up with it? Then, I issue you this challenge. Please keep track of every penny you spend for one month, and I do mean every penny.
You will be shocked at what the itty-bitty expenses add up to. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent five years.
That is how much you could have saved AND drawn interest in just five years. That, my friend, is the very reason all of us need a budget.
If we can get control of the small expenses that don’t matter to the overall scheme of our lives, we can enjoy financial success.
The little things do count. For example, cutting what you spend on lunch from five dollars a day to three dollars a day on every workday in a five-day workweek saves $10 a week… $40 a month… $480 a year… $2400 in five years….plus interest.
See what I mean? It IS the little things, and you still eat lunch every day, AND that was only one place to save money in your daily living without doing without one thing you need. There are a lot of places to cut expenses if you look for them.
Set some specific long-term and short-term goals. There are no wrong answers here. If it’s important to you, then it’s a critical period.
If you want to make a down payment on a house, start a college fund for your kids, buy a sports car, take a vacation to Aruba, anything, then that is your goal and your reason to get a handle on your financial situation now.