Saving Series: Tip 3

TIP #3: IDENTIFY YOUR BIGGEST “EXTRA” AND ADJUST

The next area where I worked to cut back was my “Extras” category. This included pretty much everything besides bills and food. I wrote down what I spent on clothes, gifts, beauty products, books, movies, office supplies, coffee dates. (I consider coffee an “extra” rather than a food because for me, coffee was usually a social thing. I occasionally grabbed a Starbucks drink for myself, but it was always as an activity rather than part of a meal.)

The first thing I changed was-- you guessed it-- my Starbucks spending. It was a pretty big extra. Now, for those of you who don't know, Starbucks has a rewards program wherein you register your gift card online for free and every time you spend, it keeps track. You can add money to the same card over time instead of spending cash. For every drink you buy, you get a “star”, and for every 15 “stars” you spend, you earn a free drink. Plus you get a free drink on your birthday, and you get free extras, like flavors and whipped cream, etc.

So anyway, I cut back on how often I went to Starbucks, but when I did go, I used my Starbucks card and reloaded as needed. This way I got the most out of each trip, and I now receive a free drink each year, plus a free drink every 15 visits. Though now it takes longer to earn that drink, it'll be there eventually, and I'll enjoy it guilt-free, with more money in my pocket.

I now usually only go to Starbucks every 2-3 months, almost always with friends, and sometimes when I'm at the airport. In between visits, I make coffee at home. I found a great blend and I'll add extra milk, or cinnamon, or vanilla to it whenever I want something different. This way I still get variety, but instead of spending $6 and getting two drinks, I get about 35.

What is your biggest extra? Do you get a regular Starbucks drink like me? Or do you splurge on a pedicure regularly? Instead of going to the nail salon once every 2 weeks, could you go once a month and invest in a quality polish and hand moisturizer that you can use at home in between? You'll get many more uses out of the polish and moisturizer per dollar than you would for the same amount at a salon. Do you spend a lot on clothes each month? Go through your closet and find some items you haven't worn in ages. Visit a resale shop or a thrift store. 

(Your knee-jerk reaction to “thrift store” might be to freak out about cheap items and germs, but I have a few words for you: French Connection, Abercrombie, Kenneth Cole, George, American Eagle, Old Navy. These are just a few of the brands I've found while scouring the racks, and with one wash in hot water, those old clothes come out new and ready to be enjoyed for a fraction of the original price. Plus, you can usually find amazing vintage items that will really make a statement. Just last month I bought 12 items for work at Goodwill-- for $35. That's less than $3 for quality brand dress pants, blouses, and sweaters for work. And the money goes to help a great charity.)

It's perfectly okay to have extras-- without them, we'd all go crazy! After all, that's the point of having money to spend, right? But by spending smarter and finding ways to maximize your dollar on your extras, you'll also be able to channel funds into other important areas, like savings and retirement, that will serve you well later on. Just remember, a little sacrifice and creativity now can mean a huge payout later.