Almost everyone has been guilty of this before:
You’ve just had your coffee on a late weekend morning and decided to go get a new pair of shoes because your current ones are coming apart. In town, you come across a new café that looks cozy and the smell of freshly baked cakes wafted into your nose. You go in and have a second cup of coffee for the day, this time with a slice of cake. On your way to the shoe shop after your coffee, you see your favorite clothing brand is offering a 20% discount for everything. An hour later, you walk out with a couple of new sweaters. And when you’ve finally bought your shoes and is starting to head home, you see your favorite burger joint across the road. Your stomach is growling and it’s almost dinner time. So, you went in even though there is already dinner at home.
If you can relate to the above, you are most of us. Unfortunately, these are also the things that make us look at our bank account at the end of the month and wonder “where did my money go?” Don’t get us wrong though; it is absolutely OK to indulge occasionally, but like everything else, having more money is all about balance and picking your battles – what is worth spending on once in a while and what is a bad habit.
If the scenario above does apply to you, then you’re already spending €50 or more just over one weekend outing, and rather unnecessarily. What if you’re doing this for 40 weeks out of the 52 weeks in a year? That’s an additional €2000 you could’ve saved! And that’s not all, because we’re just talking about the weekend here. How about your weekdays and other things you didn’t notice?
So, before we delve deeper into financial literacy itself, let’s first look at the littlest of things you might’ve missed - expenses that slip by us which we don’t even realize is affecting our yearly budget.
Our TOP 4:
Cars are some of the most expensive things you can own, after a house. Most people take only the lease into consideration, bu the real average monthly cost to operate a car in Europe is as high as €616 per month. That’s a whopping €7,392 per year, and we have not even included parking charges! While we understand it is quintessential for some families to own a car for mobility, is it really necessary for an average family to own more than one car?
Cable TV or Online Streaming Subscription - after a long day at work, one of the best ways to relax is to just kick back and watch a show, right? But which one do you pick? Your cable TV or a Netflix show? If you’re constantly finding yourself having to make this choice, it just means you have one too many options that you don’t even need. Cable TV can cost up to €40 or more per month whereas Netflix can cost up to €12. Put together, you’re spending €624 per year just to have entertainment options that you may or may not use!
How about an occasional beer? Bars are some of the best places to be if you’re grabbing a pint while hanging out with some friends or if there’s an exciting match going on. However, it is also one of the places that can make you spend too much without realizing it. An average pint of beer cost around €5 to €6. Therefore, you can easily spend more than €20 and up in a night just having 2 pints and a simple dinner at the bar. If you do this once a week, you’re already spending at least €1,040 in a year. And that does not only concern drinking out: if alcohol is a regular on your groceries list, your are probably spending more on food too!. Let alone your booze affected shopping experiences! :)
Next in the list - take outs and food deliveries. They may be one of the greatest inventions out there, but they come with a hefty cost if done regularly. An average Chinese take away meal can cost €10 or more, depending on what you order, and this is not even including the delivery charges yet. Just by doing this twice a week, you’re incurring another €1,040 in a year! Yes, it's food you may say, but if you're eating at home, why not cooking it at home at a fraction of the price?
12,000 a year
If all the things mentioned in this article so far applies to you, you’re virtually spending an additional €12,096 per year on options! Does the value you earn in return for this €12,000 truly contributes to your quality of life or are they merely the monetary equivalent of empty calories?
The things that take the most out of our bank account, are really the little spending that we did not notice slipping by due to their small but accumulative amount. Over time, they slowly create bigger and bigger gaps in our bank accounts, which gives us the all-too-familiar “where did my money go?” shock at the end of the month, in our own continuous saga of The Disappearing Savings.
So, maybe tonight, sit down and start creating a better future for yourself by reviewing your spending habits (and check your waste bin too - how much of the stuff that you buy actually ends up there?) Over time, you may even realize that you have plenty to put into better things, like a retirement fund or even an investment to grow your money!
Here at OSOM, we are not only building the best money management app. We promise to dive deeper into explaining money for you. Spending, saving, planing and freeing yourself from your daily money questions. Stay tuned!