Ever noticed yourself sweating the small stuff and worrying about small amounts of money here and there whilst the big expenses keep on coming?
There’s no point in worrying about the tiny amounts of money you save if you just blow it all
This article first appeared in City Press
Do small savings matter?
Have you ever found yourself consciously trying to save R2.50 by going to a different store? Or possibly saving the R8 parking fee by finding street parking instead? It’s great to save money and there’s certainly nothing wrong with looking for ways to save more, but are these amounts going to make any difference?
They do, and saving money generally makes us feel good about ourselves and how we’re managing our money. It gives us a sense that we’re in control and know what we’re doing.
But, after a long day at the office and knowing that we saved a few rand during the day we feel nothing about going out for dinner and drinks or possibly splurging on the new denims we’ve been wanting. There’s a vicious cycle that plays out in our heads; we “punish” ourselves by creating situations where we either deny ourselves some small luxury or where we go out of our way to save some small amount and then we reward ourselves with things to feel good. The problem though is that the rewards are generally out of proportion to the savings we made.
You’ve probably read blogs about how buying less coffee can save you thousands of rands over the next few years (and it can!), but why deny yourself this pleasure if you’re simply going to drop R1,500 on a designer shirt or R4,000 on those sneakers you’ve been eyeing out? It seems a little absurd to be sweating over the small savings but not thinking about the big expenses we’re making.
So what can we do about this crazy cycle of denying ourselves small pleasures to save the odd rand and then rewarding ourselves lavishly?
Track what you’re sacrificing and where you’re saving money
Create a list to track what you are giving up on every day in order to save money, no matter whether it’s a small or large amount. Where you parked, whether you consciously decided to not buy coffee or breakfast. Did you do a price comparison or possibly choose the cheaper brand?
Without getting too complicated or detailed simply mark the items where you feel it was actually a little “sacrifice” for you.
Track your daily expenses and rewards
The list above is tracking the money we didn’t spend, but what about the money we do spend?
Create a second list to track all your daily expenses, absolutely every little expense! Mark all the “feel good” expenses on this list. The things you spent money on to cheer you up, make you feel valued or make you feel more confident about yourself.
These expenses may be small things such as chocolates and coffee or they could be larger items such as clothing, dining out or new mags for your car.
The point of the exercise is to try to identify how buying certain items (or not buying them) can make you feel. You can also compare the sacrifices to the rewards and see how they align.
Understand your values & priorities
Finally, we need to figure out what our values and priorities are and how they align to our spending. Understanding this can bring about such a huge financial peace that it’s worth the effort of getting to know ourselves better. Think about what brings you joy and true satisfaction in life and then check if your expenses reflect that.
It is really good to make conscious decisions that help you save money each day but instead of sweating the small amounts rather look at the large expenses where you could actually save something significant. One large saving can be far more valuable than 20 small sacrifices.
Don’t ignore small expenses, but don’t be sweating the small stuff when there are obvious large expenses that need to be curtailed.