The Annual Way to Get Out Of Dept
When you are making a budget it’s easy to overlook the little things. After all, that $3 cup of coffee you had on your lunch break is just $3. How much difference could it make in your life and your budget?
However, when you start looking at your annual budget, the picture changes considerably.
Let’s say you’re spending $3 on coffee every day, 5 days a week, which is $15 a week, 52 weeks a year. That’s $780 a year. Whoa. It’s a pretty good bet that $780 could substantially pay down at least one of your debts.
Okay, that cable TV that you can’t live without. Let’s say you’re paying $60 a month for cable. $720 a year.
How about salon manicures, which generally cost about $20 twice a month plus $5 tip each time, versus the cost of doing it yourself at home with a $2 bottle of nail polish which will last you a month, and a 50 cent emory board? $600 a year.
So if you gave up your daily expensive coffee habit and your monthly cable habit for one year and your monthly manicure, and set aside that money every month in a savings account, you could save $2100 in a YEAR and make a significant difference in paying down your debt.
This doesn’t mean that you should give up all indulgences forever – because you’ll cave in pretty quickly if that’s your goal.
What it does mean is that you should pick SOME of these monthly extras to give up for one year’s time, or at least reduce how often you pay for them – only buy one cup of coffee a week, say, and make the rest at home.
And you should look at every single extra time that you spend money on daily, and figure out how much you spend on that item over the course of a year, and decide if it’s worth it to you when you’re in debt and paying interest on that debt every month.