How the Little Things Really Do Add Up

laurieStefanie 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

little-thingsNow, 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?

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  1. Thanks for sharing your story! It’s crazy how the little expenses don’t seem that until you look at how much you’re spending over a month or even a year!

    • Isn’t it, Heather? I believe that these “little” expenses are a large part of what’s keeping so very many people in debt and struggling financially.

  2. Only $150/month on gas is pretty darn good. That is by far by biggest budget leak as I drive a truck that gets only 15-18 mpg. I started using the Gas Buddy app though and it has helped me save some money.

    • Yeah, I drive a Suburban, so I know what you mean. If Rick were to take his pickup to work instead of his compact car, we’d easily be spending $500 a month on his gas alone. It adds up quick!

  3. One thing that has always bothered me: when I buy groceries at Walmart, my “grocery” bill is always so much more because I also buy my household goods there; the socks that someone needs, the lightbulbs, the cleaning supplies, etc.

    How does one draw the line at what constitutes “Groceries” and what does not. And if one chooses to not include clothing (or the lightbulbs and whatnot) in the grocery spending, how do you separate all that out of the bill at Walmart? It seems to be too much of a deal to separate the items and have two orders rung up. And it seems too much work to come home and do the math.
    What’s the solution?
    Thanks. I really enjoyed the post.

    • Glad you liked the post, K! I think everyone has to find a method that works best for them, but we do itemize our Walmart receipt, and put food, toiletries (such as TP, household cleaners, etc.) and pet supplies all into separate groupings when we track our expenses. This works well for us because we can see more clearly where we’re spending our money and how we might be able to cut back. Yeah, it can be a bit of a pain, but we’ve gotten into a habit now of doing this as soon as we come back from the store, or at the end of each day that we spend money, so that makes it easier. Then we can see that cutting down on toiletries might be more achievable than cutting down on actual food costs. For instance, we now make homemade laundry detergent, which costs about $7 a year instead of the $7 a month we were spending. Hope that helps! Feel free to email me separately at The Frugal Farmer if you have any more thoughts/questions, okay? Thanks. :-)

      • Thanks! I guess I was just hoping to avoid the pain of itemizing all those purchases!

        We use QuickBooks, so itemizing isn’t such a big deal (not like the old days, anyway!) so I’ll see if I can’t add it to my list of things to do. I have a feeling I’ll be shocked!

        • K, I think once you get started, if you do it as you spend, it’ll just become a habit and won’t take too terribly long. I’d be curious to see how it’s going for you after a month or so. Our little itemized spend-tracking sheet is getting to become a bit of a friend now. :-)

        • I keep a small spreadsheet by hand with only about 8 categories. I do separate my “non-grocery” products from wal-mart on my sheet. Mainly if it is something like clothes, car supplies, towels, etc. I just look at the receipt and estimate (round up to the nearest dollar). You won’t be that far off and it takes seconds. I don’t do a breakdown to differentiate into household supplies (light bulbs, toiletries, etc). I find if I get to exact, it gets too complicated and becomes a chore. If it becomes a chore for you, you will not follow through.

          • Great tip, Lisa. Yeah, you definitely have to find what works for you if you’re going to stick with it. This is key!

    • Gladly, Stefanie! Once again, you’ve written shared great wisdom with your posts. Keep up the great work. :-)

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