While the amount of any individual purchase could be negligible, the total amount of money we fritter away without thinking about it can easily average $3 per day. That works out to $90 a month or over $1000 every year. All those packages of gum? They can end up costing a lot more than you think.
The good news is you can have it all. And by “all” I mean a working budget, money in the bank, and the occasional little splurge. All you need to do is put on your financial detective hat (a charcoal grey fedora if you have it; otherwise whatever’s in your closet will do), document every small unplanned purchase that you pay cash for, and total up your spending over a week’s time. So if your co-workers ask you to chip in $2 for a birthday cake for the boss, make a note. If you give a neighbor’s kid $10 to rake leaves, write it down. The $5 you paid for a box of Girl Scout Thin Mint Cookies also goes on the list.
Keep track of these unexpected spends every week for a month. Calculate your weekly and monthly totals. If you’ve never done this before, the final amount will probably surprise you. But remember, knowledge is power, so once you know your “fritter total” you can:
- Look at how, when and where you spend money. If you’re frittering away $1.50 on weekday mornings for coffee and donuts, cutting back to just twice a week can save you over $200 a year.
- Give yourself a reasonable allowance in cash every month for impulse purchases.
- Re-allocate money you’re spending on spur-of-the-moment purchases to other areas that benefit you more, such as investing.
The point of a “fritter finder” investigation is mindfulness, not financial punishment. Taking control of your personal finances from the first penny to the last dollar can decrease stress and put you on a clear path to achieving your financial goals. It won’t cost you a thing, and the payoff will be priceless.