Cutting out small unnecessary purchases really does make a financial difference!
A penny for My Thoughts
If only I could have a penny for my thoughts, I'd have a little more loose change in my pocket, and a whole lot more in my savings account. I have found that there are two people in this world: those who spend their money and those who hold on to it.
It is amazing what a seemingly little purchase can do to your wallet. Before I get too far into my rants, check out my blog, The Thin Wallet, for weekly tips and tricks to saving everything from cents to hundreds of dollars!
When I was younger I was always blown away by how much money my friends would spend on superfluous items at meals or in everyday spending. As difficult as it was to watch them have the extra candy bar or the newer model, I knew I could save the money I did not spend and one day have something great in return.
It was not until I was 20 years old when I realised that my years of minimal spending had paid off. Where my peers had little or no money saved, I had accumulated more than $20,000 in savings! I knew I would be just as happy without the snickers in my belly, and my savings account was proof of that.
Some years ago, an airline took some time to review their budgeting tactics. To decrease their small purchases the company had to save money wherever they could, but what would produce a monetized saving?
With some thought, the company looked to their in flight menu. In an effort to minimize their change and maximize their financial savings, an almost unnoticeable change in their food would be made. Where their salads were historically served with four olives, they decided to remove one from each meal. Although it was a small change, the company ultimately recorded a savings of $40,000!
The question we must ask is what is the olive in our lives?
The Latte Factor
With Starbucks and other pricey coffee shops on the rise, financial gurus have coined the term 'Latte Factor' to represent the expensive, unnecessary things in our lives that will save money in the long run.
Imagine spending $4 each day for a snack, whether it be coffee, latte, sandwich, candy, it does not matter. At $4 a day, you are spending almost $120 each month, which translates to a grand total of $1,440 per year. What could you do with that extra money? If you can not decide, send me a personal check, because I have a few ideas that could make thousands in just a few years.
We all have things like this in our lives that simply rob us of developing a strong financial foundation. By removing the small, unneeded purchases today, we can realise great rewards tomorrow.