Budgeting 101: Why You Should Keep a Close Eye on Those ‘Small’ Purchases
One of the biggest challenges with keeping a budget is keeping smaller transactions under control. Big-ticket items are easy to spot and easier to prevent, but small, day-to-day purchases can quickly add up with many people not even noticing.
A good example is a cup of coffee, which may run you just $2 a cup, and that could easily be more depending on the brand you drink. If you purchase one cup every workday you’d easily be up to $40 a month, and if you drink two a day then you’re likely over $80. Again, this is assuming a very low cost per cup, most people probably pay more than $2.
However, these small transactions can often do a lot of damage to your budget, because it’s so easy to not notice them. We’re seeing a growing trend towards these smaller-sized purchases. Whether it’s paying $5 a month for a subscription or just $0.99 for an in-app purchase, these expenses can fly under the radar at the time of purchase because they seem so insignificant, but that’s why it makes it all the more important to track and tally up these costs over time.
The next time you make a small purchase, multiply that amount by the number of times you expect to make the purchase over the month, and consider whether it’s still a good idea, and a good habit to fund. Cutting out these small and unnecessary recurring costs is an easy way to improve your bank balance at the end of the month.