How Small Amounts Matter

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How Small Amounts Matter

How Small Amounts Matter

We’ve all heard the expression “pinching pennies.” Perhaps we’ve even laughed at it. But as insignificant as pennies may seem, a penny here and a penny there adds up. If you save up enough pennies, before long you’ll be counting your money in dollars.

Whether you’re facing a drop in income or trying to save up some money, it’s important not to forget the little things. In fact, they may be the best place to start when it comes to trimming the budget. Small expenses are less likely to be missed than larger ones, and most individuals and families have lots of them. A cup of cappuccino here and a video rental there won’t make a big difference in our lives either way, but combined with other small expenses, they can make a big difference in our budgets.

Here’s an example. Let’s say you grab a biscuit and juice or coffee at your favorite fast food place every morning for breakfast on the way to work. It costs you $3 a day. That doesn’t seem like much. But if you were to eat breakfast at home, you could eat for about 50 cents each morning. In a week’s time, you would save $12.50. In a month’s time, you’d save $50. And over the course of a year, you would save a whopping $600!

How Small Amounts Matter

If you can save that much just by cutting one minor expense, imagine how much you could save by eliminating a few more. If you switched to a cell phone plan that’s $10 cheaper, you could save $120 a year. If you buy a bottled water to take to the gym three days a week for $1.50 a pop, you could save $234 a year by bringing water from home. Just those three minor adjustments could save you a grand total of nearly $1,000 a year!

Conserving energy can also save you money while causing little or no inconvenience. For example, maybe you split your errands over two days each week. Making one trip out and running them all at one time could cut your transportation costs for that activity in half. Simple habits such as turning the lights off when you leave a room and turning the thermostat down a few degrees in the winter and up a few in the summer can also make a difference. Actual savings on these things will vary, but they add up just like anything else.

Small expenses end up costing us more than we realize. By making minor changes in the way we do things and cutting out unnecessary items, we can have more wiggle room in our budgets. This can enable us to start an emergency or retirement fund, save up for a family vacation, or buy that new appliance we’ve needed for so long.

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