Budgeting · Financial Freedom · Financial Health · Investing · Money · Personal Finance · Retirement · Savings

Quit Saving 35 cents

Right now I’m living in a city where a metro ride costs .35 cents. Sometimes I find myself thinking, maybe I’ll walk home, at least I’d save money on my metro ride. Then I remind myself that it cost 35 cents and there are much bigger fish to fry. Don’t get me wrong if you save 35 cents enough times it adds up. The issue is I’ve been thinking too small. Eliminating that daily metro ride (70 cents round trip!) or that daily cup of coffee probably won’t make a real dent in your budget. It’s equivalent to saying you’ll stop ordering the super size meal but you’re still eating at McDonald’s everyday. Probably not making a big difference.

If these are truly unnecessary purchases, yes, I recommend cutting them out of your budget ASAP because extra money is extra money towards your goals (early retirement here we come!) I literally saved my lunch money for a year and accumulated $1,000 so I can say first hand that every little bit counts. However, when you’re really trying to make a dent in your budget think of it like a diet– eating one more fruit a day is a great way to start building healthier habits but you won’t lose 20 pounds doing it. Cutting out small expenses helps you build the habit of saving more but you’ll need to take bigger and more strategic steps to see a real difference.

To truly maximize your budget, the trick is to think bigger. Are you looking for ways to spend less and earn more? TIP: Saving .35 won’t help you.

Two questions to get you started:

Where are your biggest expenses? Chances are home and food occupy the top 2 spots but eliminating a $200 cable bill is significant as well. Double check if all your spending matches your goals. Are there other ways to eliminate? If no, are there ways to make these expenses cost less?

How can you increase your net earnings? A part time job? Selling used items you’ve decided you no longer want draining your budget? Can you sell a skill you have or do an exchange of goods instead of buying something new? Rent out a room? Or even bigger: ask for a raise or find a new job with a higher salary?

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