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Bench Talk: Don’t Blow Your Budget

In today’s Bench Talk, we’re going to be talking about expenses that can blow your budget and what to do about it. For most people, rent, car payments, food, groceries, are not the things that blow their budget. It’s little things that sneak up on you. Things like this:

This latte cost me $4.50 today. Less than five dollars. But this latte every morning on my way to work can cost $100. Maybe for you it’s not coffee. Maybe for you it’s eating out at lunch instead of bringing lunch to the office. Maybe it’s that kitchen gadget, or that tool for the garage.

Whatever it is, it can sneak up on you and add up to things that you weren’t prepared for. Most people don’t budget $100 a month for coffee. But most people have something that adds up and can make a difference.

So how do you figure out what your thing is? First you have to track your expenses for a couple of months, and I mean really track your expenses. Write down everything you spend, and then add everything up. Are there things that surprise you? Things you spend more money on than you thought you did? Things you spend more money on than you should? Those are probably the things you need to pay attention to.

So am I saying, “Don’t buy coffee in the morning”? Am I saying, “Don’t go out with your co-workers at lunch”? Of course not. But pay attention, and control those expenses. Sounds easier said than done, right? Here’s a couple of hints.

Figure out what you think you want to spend at Starbucks every month, and buy a gift card for that amount. If you decide you want to spend $25, buy a $25 gift card, and when that $25 gift card is over, you know it’s time to start making coffee at home.

If your expense is something that’s not store-specific, then go old school and use the cash method. Put the amount of cash that you want to spend on that item in an envelope at the beginning of the month, and when that envelope is empty, it’s time to stop spending on that item.

Those little changes and little decisions can add up to big differences that can make a big difference in your financial future. It’s your money, you can spend it on whatever you want to spend it on, but you can only spend it once. Thanks for spending some time with me.