Budget Suckers You Won't Miss


It’s often the innocent small-ticket purchases that end up wreaking the most havoc on your bank account. To put the most cash back in your pocketbook with the least amount of deprivation, we went to Denise Kiernan and Joseph D'Agnese, money experts and authors of the upcoming book, Feed the Monkey, which outlines savvy financial strategies for freelancers.  They say the most sinister budget suckers fall into two main categories: habits, those items you always buy without thinking, simply because “it’s just what I do,” such as appetizers, movie popcorn or the morning paper; and impulses, those items you don’t technically need, but when the urge strikes, you gotta have it (think chapstick, breath mints or your 17th pair of black strappy sandals).

Here, they’ve ID'd the top bad habits and impulses, plus their costs to you.

Habit: The Good-For-You Green Drink
Sure, it’s good for you, will likely ward off several major diseases and boosts your energy, but at $3.50 a pop, can’t you just pop a daily multivitamin? Your yearly savings: $875.

Habit: Junk Snacks
Chips and soda at work, candy in front of the TV, a hot cookie because you’re at the mall and that’s what happens when you’re at the mall: These small two- or three-buck habits add up. “If you want to save money immediately,” D’Agnese says, “resolve to never spend another dime on soft drinks again. You’ll feel healthier physically and financially.” He points to Sharon’s Muffin Calculator, an online resource that points out if you invested the money used for your thrice-weekly $2.75 muffin habit, you'd have enough for a new computer at the end of the year.  Kiernan points out that a muffin mix (for the same price of one gi-normous baked good) will get you 10 homemade muffins and feed your habit for two weeks.

Habit: Luxury Coffee
Yes, you work hard. Yes, you deserve to reward yourself with something small like a cup of coffee. But switching from the gourmet variety to the deli brand will save you a few bucks a day.  Even better? Use the coffee maker at work and you save five big ones each morning.

To stop bad spending habits in their tracks, start by taking stock of your spends. Then consider that you’re not breaking habits, you’re creating new ones, D’Agnese and Kiernan suggest. This way, it’s not about depriving yourself, but about making smarter choices. Then tweak your purchases—if you eat out five days a week, cut that number in half.  And if you’re big on the “I deserve” language, switch from “I deserve a $5 coffee” to “I deserve to pay off my debt,” they advise. “It’s more financially empowering and you’re making choices that support your bigger goals."

Impulse: Temptations Dangling by the Cash Register
Flashlights, magazines, lipstick holders, key chains, you name it, it’s hanging by the checkout line, screaming, “Buy me!” “All the shiny delicious stuff that appeals to the pleasure center of the brain and distracts you, like candy, gum, DVDs, can easily add up,” Kiernan says. “Stores know they have a bored audience waiting in line, so it’s like they’ve created Christmas all year, permanent stocking stuffers you wouldn’t normally buy.” A whimsical $20 tagged onto your bill each week is $1,040 a year.

Impulse: Techno Anything
Think ringtones, downloadable songs and basically anything you can type in a password to make a purchase. Kiernan says nine out of 10 times, impulse buys are even easier because you don’t even have to take out a credit card. And at just 99 cents a song, the cost barely registers on your budget radar. At the end of a year, however, 99 cents a day turns into $361.

Impulse: New [Insert Fashion Item Here]
At $150, even $250, a new pair of shoes might seem like a steal if they’re on markdown, but D’Agnese says an unplanned bigger-ticket item can screw up your budget for the entire month. “Even if the price tag isn’t that high, it could be the value of a car payment or student loan payment,” he explains. Instead, fix the shoes you have, save for the purchase or live with the several other pairs already in the closet.

To stop the "buy on the fly" mentality, Kiernan and D’Agnese suggest giving yourself a daily budget in cash. You’ll become more connected to the money you spend and you’ll make better choices about priorities.



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