Stop Dollars From Flying Out the Window

“I work hard, I make a good living, so why is there never enough money?”

Does this sound like you? Yes, poor budgeting could be part of the problem, and sometimes people have been known to live above their means, e.g., buying more house or clothes or car or vacations than they can afford.

But part of it may be the sneaky way addition can attack your wallet when you’re not looking. Five bucks for that latte doesn’t seem all that much, especially when you need one to face a tough day at the office. And you deserve it, right? Then there’s $9.99 for a quick pizza on the way home from work. And $8.99 for that cute little pair of gloves that are marked down from $49.95. Can’t pass that up.

But look what just happened: $23.98 just disappeared without your really noticing. Do that just four times in a month and nearly $100 is gone. Do that twelve times a year for 30 years and you’re out close to $35,000, not to mention the interest you could have made on that money if you’d invested it. The point is that the little things add up faster than you think they do.

Does this mean you should never splurge on yourself or your friends? No, that’s not what we’re saying. What’s the point of working hard to make money if you can’t enjoy it from time to time? All we’re saying is to stop and think every time you open your wallet or tap your smartphone.

Splurge spending tends to rise when we’re in a negative frame of mind. Whether from a hard day at work, a recent break-up, or lousy weather, it’s a natural impulse to want to do something to get yourself out of it, and retail therapy is a well-known go-to for the blues, or even just the blahs.

Sometimes it’s okay and even healthy to indulge yourself. If you’re suffering from winter doldrums, a $10 bouquet of flowers from the grocery store might not only perk up your mood for the several days that they’re alive, but be better in the long run for your waistline than a $5 slab of chocolate cake.

If you spend your life in super-frugal mode, you could end up very wealthy and very depressed in your old age when you think back on all the fun things you denied yourself. But if you’re thoughtful about what you spend, you could end up with a little less money and a lot more happy memories.

The classic question many financial gurus advise you to ask yourself is: Is this a need or a want? Needs will always supersede wants.

But wants can be good, too, if they’re carefully indulged. When you’re about to purchase something, ask yourself: (a) do I need this? (b) do I want this? If the answer to (a) is yes, buy it. If the answer to (b) is yes, ask a follow-up: will I be happy six months from now that I bought this? If you can honestly answer yes, buy it.

And don’t be afraid to return something if you change your mind later. Keep sales receipts and return unused items for a refund. Even small items are worth returning. They add up. (Don’t make a special trip and spend more in gas and time than you’ll get back—wait for the next time you’re in the store.)

A special note about online purchases: They’re crazy easy to make, and web marketers are experts at persuading you to part with your money. It’s even easier, though, to postpone an online sale than one in a bricks-and-mortar store, because with the latter you can talk yourself into buying while you’re there so you won’t have to make a special trip back. Online, you can bookmark the site or leave items in your shopping cart and log out. When you go back, you’ll often find the retailer has offered a lower price to get you to complete your order.

One final tip: If you do decide to pass on the latte and the pizza and the gloves, take the cash you’ve saved, go to your bank and get a hundred-dollar bill. Tuck it into your wallet and walk around feeling rich (or at least richer) and very virtuous. As an added bonus, you’ll be far less likely to break that hundred for something you don’t really want.

Finally, let Billshark’s sharks go to work on your bills. The savings we will find you can be earmarked for splurges or savings/investments or both!