Small Expenses that Can Have a Big Impact on your Budget

Small expenses can really add up.

You don’t always realize how small day-to-day expenses can add up and represent a sizeable portion of your budget.

For example, if you buy a coffee on your way to work every morning that costs $3.50, you end up spending $70 per month or $840 over the year!

Certain expenses go unnoticed.

Naturally, there is a psychological aspect to these little expenses. Since the amounts are small, they’re often viewed as insignificant and you may think there’s no harm in spending $1 or $2 if it makes you happy.

And since few people keep a close eye on their budget, they don’t always realize that these purchases are on top of essential expenses (such as grocery shopping and electricity). In the end, all these small amounts add up and push up your monthly expenses and you could be in for a nasty surprise at the end of the month.

A few tips to help you cut down on small expenses.

So how can you limit these small expenses that eat into your budget?

The answer is simple: you must start tracking your consumption habits!

1. Analyze your spending 
   The first step involves tracking which products you’re spending your money on. You must identify exactly what you’re buying. All this requires is listing each item and the corresponding price. To get a clear picture, you can keep all your invoices, even those for small purchases.
2. Reduce or eliminate expenses
   Once you’ve made a list, you can decide whether or not to buy certain items, regardless of how tempting they are. The question you should ask yourself is whether you really need the product. You could also limit yourself to three small expenses per month.
3. Track your budget
   List all the products that you want to continue buying in your overall budget and don’t forget to include the small expenses. Naturally, you should take into account how often you purchase specific items. If there isn’t room in your budget for everything on your list, you should eliminate or drastically reduce certain expenses.
4. Save money
   The good news is that you may be able to save more money by cutting out certain small expenses. As a result, you could save enough to complete a project.

In a nutshell, don’t give in to the temptation of seemingly insignificant small purchases. Slow and steady wins the race! Through careful planning and tracking, you’ll avoid spending your money on trivial purchases and can take pride in saving for a worthwhile project! If you’re having trouble managing your budget, contact one of Raymond Chabot’s Licensed Insolvency Trustees.