Financial Friday: Your Money Drain

This week, for Financial Friday, I want to discuss in-depth, Money Drains and how they can negatively impact your finances each month.

We have discussed budgeting before, some of you have written in and asked if it is really that important to do. What if you are just not that good at budgeting, some have asked.

My thoughts are this: 1. Budgeting is not hard, it just takes practice. 2. Without a budget, you will not really be able to Tune In 2 Your Money 100% ‘cause you just won’t know exactly how much you have. 3. Rich people have budgets and know exactly where there money is going each month.

I don’t know about you, but I want to Tune In 2 My Money so that I can be a #3.  I think that we all assume that if you are “rich” and have extra money that you just don’t have to take care of your money… I say this mentality is opposite of what works to get more money each month. Anyone who is not watching where there money is going could be throwing money away each month and not even know it.

Regardless of how much money you have each month, mindless spending works against us and against all of us.

David Bach in his Automatic Millionaire series calls this kind of spending your Latte Factor. He named it after folks that buy a coffee and muffin each day on the way to work, and don’t even realize how much money they are spending each week and how quickly it all adds up each month.

So as we discussed in previous weeks, by tracking your spending and watching your budget, you can find out your latte factor and how much you are spending.

Tune In 2 Your Money

Here are some quick figures to help you Tune In 2 Your Money. How much do you think that you spend each day or week that you can slow down or curb entirely?

Daily                        weekly                        1 year                  5years              10 years

$3 $21 $1,092 $5,460 $10,920
$5 $35 $1,820 $9,100 $18,200
$7 $49 $2,548 $12,740 $25,480
$10 $70 $3,640 $18,200 $36,400

 

WOW!  This chart even surprised me while I was calculating out the numbers. I mean, ten bucks a day could happen…. A cup of coffee and a bagel, a candy bar and a soda, lunch and dinner out not to mention a magazine or a pack of gum.

So again I urge you to Tune In 2 Your Money so that you can start to identify and plug up those money drains. What if you could start to save $10 a day instead of spending it?? Just think, after a year you would have $3,640 all saved up. That is a LOT of cash in a savings account, right?

What do you think? How surprised were you by the totals?? Share your thoughts below or on Facebook!

P.S. Here are a few of David Bach’s books that I have read and enjoyed:

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