Stefanie over at The Broke and Beautiful Life was fortunate enough to be featured in this WSJ article, where the author talked about the dangers of wasting your money away on little things. Some of the commenters ridiculed Stefanie for insisting that grabbing a taco a few times a week could damage her budget, but after reviewing our 2012 spending – our first time ever tracking what we spent – we learned firsthand that those “little things” can indeed get you into a boatload of trouble.
It was December of 2012, and for the first “real” time in our lives, we’d made a decision to get our financial house in order and dump our tens of thousands of dollars of consumer debt. Since we didn’t get into that much consumer debt by going on vacations, buying new furniture or shopping at Macy’s, we figured it might be a good idea to go back through 2012 and see exactly what we had been spending our money on.
To keep it simple, we tracked three areas: groceries, gas for me (I’m a stay-at-home mom, so much of my travel is for leisure purposes) and entertainment funds. As we started to track, I got a sick feeling in the pit of my stomach. As the tracking months rolled on, I felt even sicker. When it was all said and done, we found we had spent:
- Over $900 a month on groceries
- $205 a month on gas for my car
- $175 a month on eating out
Now, the eating out numbers might not seem that big to you, but when you consider that most all of it was fast food, that’s pretty scary. It’s even scarier when you know that we were in a situation at that time where, due to my husband’s layoff in 2010 and subsequent new job at 80% of his previous salary, we were short about $1,000 in income each month. 2012 was a year where we had half-heartedly committed to spending less, and we did spend a lot less than we had in previous years, yet, we still spent too much. My point is that we had no business at that time spending that kind of money on those kinds of things, but we justified it because they weren’t “big purchases”.
We told ourselves that we “deserved” to spend a little bit of extra cash here and there, just like everyone else got to. The problem was that our “little bits” added up to “a whole lot”.
Since choosing to track our spending and make and stick to a budget, we are now spending:
- Approximately $400 a month in groceries
- Approximately $150 a month for gas for my car
- A max of $60 a month on entertainment funds for our family of six
I’m not trying to say that these expenditures are “bad”, although for us in our particular situation, those 2012 numbers certainly weren’t wise decisions.
The point I’m trying to make is that the little things really do add up. You might not think you make enough money, and you might not think you spend very much money, but a dissection of a month’s or a year’s spending habits, like they did for us, might tell you a very different story. And with the new information you’ve gathered, you just might be able to completely change your financial future.
Where’s the financial leak in your money ship?