Patch The Hole First! Know Where Your Money’s Going!
You most likely have at least noticed the back and forth debates on the federal budget. One common theme that kept showing up was plugging the holes in the budget. Well guess what, plugging the holes in your own personal finances can have a much more profound effect.
Consider that it makes no cents (pun intended) at all to go out chasing for the latest investment doo-hickey to bring in more money if the money is going out just as fast or faster.
Where Does it All Go?
Not surprisingly, there are quite a few people around who can’t tell you where the money went. Sure, they can point to the mortgage payments, the utility bills, that sort of thing. And for whatever portion of their monthly expenses these regular bills add up to, a lot of people can tell you fairly accurately how much money those bills eat up. But for the rest of the money? Not so much. So where does the rest of the money go? Read on, especially if you have ever gotten to the end of the money well before the end of the month.
Clue: Look at Your Belly
No, it’s not even about whether you are trim and fit or getting a little pudgy around the edges, although that may in fact be a part of the clue. In this case, it’s all about the money you are spending on food. Start with your regular grocery shopping. Have you ever paid any attention to how much prepared foods you buy compared to buying the raw ingredients and cooking them up?
What’s in Your Basket?
Yes, it is true. Times are different and in most households both partners work. Oftentimes neither partner has time to cook at the end of a long work day. This is even more true when there are kids involved and more meals to prepare. Yet, modern lifestyle choices aside, understand that prepared foods do cost more. Plus, you already know they are not necessarily the healthiest choice. Whatever your personal situation may be, recognize that this is a trade off you are making. Convenience at a higher price or more work at the end of a workday for a lower price.
There’s more. While you are cruising up and down the aisles in your favorite grocer, stop and take a look at how many single serving selections you’ve got piled up. Yes, the single servings are convenient, it’s super easy to grab them in the morning and throw into the kid’s lunches. Just understand, you are paying for that convenience and in some cases you are paying a lot more.
Speaking of Food
What about the concept of eating out? Do you know there was a time in our history that eating out was a novelty, a treat if you will. Nowadays, many families eat out several times a week. Worse still, some individuals eat out several times a day. If you ever take the time to actually add up how much you spend on eating out, you might very well go cold turkey tomorrow. But then again, maybe not. It is, of course, a lifestyle choice and many people happily pay the fee for convenience. Just make sure you understand how much of your hard earned money disappears this way.
Spoiler Alert: It’s the Small Stuff
Really, it is. Do you ever find yourself looking in your wallet and wondering what happened to the money you put there? If so, you are not alone. It turns out that on a percentage basis, a fairly sizable chunk of your money goes away in onesies and twosies. Think of it like a leaking faucet. Looks so small and unimportant until you notice your water bill went up by another $50 this month. In other words, it’s little expenses that you don’t pay a whole lot of attention to in the moment that actually total up to a bigger than expected total by the end of the month.
For example, do you start your day with a stop at your favorite coffee shop for a Super Grande Latte Blah Blah. Then, at mid morning, do you offer to run down to your other favorite coffee shop by the office to bring back some pick me up snacks for the team? Oh, and let’s not forget the lunch. Do you find yourself going out for lunch most days of the week? You get the point here don’t you?
If you actually took the time to just gather your receipts for a week and total them up on the weekend, you may very well ask your partner to hit you upside the head. No wonder you are broke at the end of the week. Your wallet has been dribbling out all over town.
The bottom line is to get a handle on your personal finances you have to know where the money goes. As you can see from the above, it’s extraordinarily easy to end up at the end of the money before the end of the month.
What about You?
Now you know where the money goes. What’s your take on this?