When many people think of budgeting or saving money, they think of making major changes like cutting out vacations, downgrading the car, or moving to a smaller house. But budgeting doesn't necessarily have to involve a great deal of sacrifice or hassle. Paying more attention to the little expenses you incur every day on food, transportation and entertainment can help you stick to your budget with enough money left over to pay down your debt, enjoy a trip to Hawaii, or just live a little more comfortably. (Budgeting doesn't have to be all pain and no gain. To learn more, read Enjoy Life Now And Still Save For Later and Top 5 Budgeting Questions Answered.)
Food can be a major expense for busy people who purchase a lot of meals away from home. If you added up the cost of all those lunches out, you might be shocked to find that you're spending $200 a month or more on meals that wouldn't cost more than $50 a month if you brought them from home.
Let's take a look at a few food-money traps you're likely to encounter on a daily basis and how to avoid them.
- Reduce coffee costs - It's tempting to hit the coffee shop every morning, but the cost really adds up, especially if you're purchasing premium drinks like lattes. Strike a balance between saving money and treating yourself by reducing your weekly visits to the coffee shop from five to two, or ordering regular coffee and adding the milk yourself for free. Better yet, buy a coffee maker for your desk at work if it's your hatred of the office coffee that compels you to search out the premium blends. Even a fancy coffee maker will quickly pay for itself if you're currently spending $4 a day on lattes (that's $80 or more per month!).
- Eat breakfast and create a food stash - Breakfast is usually the least expensive meal of the day, and you might not spend as much money on lunch and dinner if you don't starve yourself all morning. For the times you do get hungry, keep snacks with you in the car, in your purse or briefcase, and in your desk at work. You'll save both money and calories if you eat a granola bar instead of buying a muffin. Don't forget to take advantage of any freebies provided by your office.
- Do it yourself - Rather than opening up your wallet, it's cheaper to make your own energy bars, yogurt parfaits, muffins, or whatever you habitually hand over money for. Also, don't buy bottled water. Carry your own re-usable bottle instead. The tap water in North America is perfectly safe to drink.
- Save on lunch - Bringing your own lunch is a highly effective way to reduce spending, whether it's making a sandwich, bringing leftovers from last night's dinner, or heating up a can of chili. If your office doesn't have a communal fridge, consider getting your own mini-fridge. While this item may cost $80 new at the store, it will quickly pay for itself if it gets you to bring leftovers from home instead of spending $10 on restaurant lunches every day.If brown-bagging isn't your bag, "lunchpooling" can be another way to save money on workday lunches. Get together with a small group of co-workers and agree to each provide lunch one day per week. One person orders a pizza on Monday, and the next person buys a couple of foot long subs for Tuesday, etc. By selecting the right lunch choices, you'll save money by taking advantage of economies of scale.
- Cook dinner - Cook ahead for the week during the weekend when you have the time. Make a large batch of food and freeze part of it. Don't hit the restaurant, pick up the phone, or visit the prepared food section of the grocery store every night. If you have to eat out, choose an inexpensive restaurant with generous portions so that you can get two or three meals for your money. Always take home restaurant leftovers.
Driving a car to work every day costs more than just the price of gas - it also causes wear and tear on your vehicle (decreasing its value and increasing your maintenance and repair expenses) and increases your odds of being involved in an accident. Use these tips to make getting to work more cost-effective.
- Carpool - You don't have to work in the same office as someone to catch a ride to work with him or her. Search out people on Craigslist who live and work in the same neighborhoods you do and have the same work hours. In addition to removing the stress of driving a few times a week, carpooling may even directly reduce your commute time by taking advantage of a carpool lane on the freeway.
- Avoid peak commuting hours - Adjusting your commute to avoid rush hour not only gives you more free time; it also improves your gas mileage as you spend less time idling. Traffic may be much lighter just 15 or 30 minutes before the time you normally leave. Removing a long, stressful drive from your day can improve your energy level and your mood.
- Take the bus - Even if it takes a little longer and you have to sit next to a stranger, you might find that being able to ignore the traffic and read a book makes sacrificing the privacy of your own vehicle worth it. A monthly bus pass is usually cheaper than a month's worth of gas.
- Don't buy premium gas - Ignore the hype about premium gas unless the manufacturer of your vehicle specifically recommends a higher octane fuel. (For added insight and tips, see Getting A Grip On The High Cost Of Gas.)
- Maintain your vehicle - Many major repairs and unexpected breakdowns can be avoided if you change your oil regularly and have the car thoroughly checked out once or twice a year. You can also buy an OBD-II reader to read your car's computer, which can save you a trip to the mechanic when your check engine light comes on.
At the end of a hard day's work, we all want nothing more than a few hours of relaxation and fun. How you choose to spend this time can have a major impact on your finances.
- Stay home - The No.1 way to save money during your free time is to stay home. You're already paying for the place you live, so why not enjoy it? Avoiding malls, bars, clubs, movie theaters and restaurants will put you ahead of the game (as long as you don't fill that time with online shopping). This isn't to say that you should never go out, just that it's good to enjoy these pleasure in moderation. If you just have to get out of the house, run errands that are already factored into your budget, such as grocery shopping, or take advantage of free activities like hiking, visiting your neighborhood pool, or going to the library.
- Trade major luxuries for affordable luxuries - If you feel like treating yourself to something special, keep it reasonable. Buying yourself some gourmet chocolate at the grocery store won't set you back nearly as much as going out for a gourmet dinner, but it might be all the pick-me-up you need. (To learn how to stretch your spending dollars even further, read Five Money-Saving Shopping Tips.)
- Save on internet costs - If you live in an apartment or condo, look into sharing wireless internet with your neighbors. If you already have a land line and a cell phone, you can get dial-up internet without worrying about tying up the line. Today's dial-up is considerably faster than it used to be. If your online needs are minimal or you can accomplish what you need to during your lunch break at work, consider going without home internet altogether.
- Only buy as much TV as you watch - Downgrade your cable package, or give up cable altogether and pay to watch individual TV shows from download sites such as Netflix or iTunes. Some networks let you watch recent shows for free online. You might also find that the cable company will suddenly offer you a better rate, at least for a few months, when you call to cancel. (For more on how conspicuous consumption can destroy your finances, see Stop Keeping Up With The Joneses - They're Broke.)
- Be wary of bundled services - Don't assume that package deals that bundle your phone, internet and cable TV together are the best deal. It often pays to price-out the individual services from the different providers. Bundles also put you at greater risk of being unable to communicate in an outage.
Sticking to a budget doesn't have to be painful - it can actually be enjoyable when it helps you achieve your goals. You work hard for your money, so why let it slip away from you in ways that are easily controlled? While we can't always predict or prepare for the major expenses in our lives, we can choose how much money to spend on work lunches or television. Taking charge of the small, recurring costs can have a surprisingly large effect on your finances.
For more budgeting tips and tricks, read Save Money The Scottish Way and Get Your Budget In Fighting Shape.