A lot of people think it is good enough to keep track of the big purchases without worrying about the small everyday expenses. That thinking suggests that only the expenses over $100 or $500 are worth paying attention to. If that is your way of looking at things I am here to tell you that you could be looking at a financial downfall in your future.
To clarify, it is important to make sure we have enough money for large purchases and bills. It is just as important that we make sure we can afford the small expenses. A few dollars here and there may seem fine at first but it adds up quickly if you aren’t keeping track of each expense.
According to Fox News, the average American spends $1,100 on coffee per year. Do you know how it got to that high of a number? With only $3 a day in spending. This is not to say you have to completely cut out buying a cup of coffee. You simply need to track your spending each time you purchase a coffee so that you do not go over your budget.
It is far too easy to go over your budget. Put another way it is too easy to begin spending more than your actual income. Even when it comes to small expenses like a cup of coffee, hamburger, protein smoothie, ice cream, soda, vending machine chips, candy bar, etc.
All the above-mentioned expenses involve food and beverage items but small expenses can also be app subscriptions, video games, home décor, kitchen gadgets, movies, etc. It doesn’t even have to be luxury items. As it can also be essentials like toilet paper (if you can find any), soap, water jugs, vegetables, fruits, etc.
All your small expenses add up to be big purchases. Groceries for instance is one of the largest expense categories in most people’s budgets. Yet groceries are a bunch of small purchases. It doesn’t matter whether you go to the store once a month or multiple times a week. The fact is each item is a small dollar amount that adds up over time. Thus you should treat small purchases as you would large purchases.
You need to write a budget for yourself and your family. The budget simply tells you how much money to spend in each category to make sure you are living below your income. It also helps you achieve your goals but you can look more into that in my other articles.
By tracking each time you spend money in every category of your budget you are making sure you are not overspending. Overspending is dangerous as the only way to find extra money that you don’t have is to borrow money. Whether from a credit card company or a family member.
Since small expenses add up over time you need to track it all to be sure you don’t have to rely on others to pay your bills. That is why it is important to track every single expense no matter how small it may seem. Healthy financial independence comes from knowing your income, expenses, and financial goals. Don’t exclude small expenditures from your plans as they will be present in everyday life and are worth tracking to reach your goals.
