Is Your Money Going Down the Drain?
You may have a really great handle on where your money goes. Pretend there are a few dollars that go to a new whatchamacallit that you lose track of by month’s end. You ask yourself “Where did all my money go, how can I possibly be coming up short this month?”. It is a pretty common occurrence for many people, even those who have managed to balance their budget. It’s those small, almost insignificant purchases that add up to something significant.
This is your financial leaky faucet.
Your Leaky Faucet
Compare your tiny little purchases to drips from a leaky faucet. Each one seems so insignificant. The noise is annoying in the moment but you don’t necessarily consider what it means long term. A faucet that leaks 1 drop per second adds up to over 7,000 liters (1850 gallons) a year. Averaging water consumption rates in several major North American cities, that equals about $14/year. That isn’t an overly scary number – it is only $14.00. If you were to invest $14.00 annually at a rate of return of 5% that is over $1,000.00 over a 30 year period. We aren’t talking about anything that is going to make or break your life here. That is money that is going down the drain so to speak.
What Are the Drops?
There are so many tiny little expenses that we don’t think about. Individually they are so small they have almost no immediate impact on our budget. Below are a few examples that may apply to you and the some of the numbers to go with them.
Grocery Store Bag Fees
Many cities have adopted a policy that disposable plastic bags have a fee applied of $0.05-$0.10 each. If you were to purchase around 4 bags per weekly grocery trip that would be around $15.00 a year in extra costs going into the landfill. Bringing your own bag/box is obviously an easy work around. For a small investment you can also bring reusable bags. Sarah and I have had the same 10 or so split between our cars for over 5 years.
There are a number of no fee options, however for a more traditional bank you might pay between $4.00-$6.00 every month. The fee you pay goes to providing you some level of personal service at the branch, but as the world goes more electronic my guess is you don’t get fair value for your dollars so I’ll count 50% or $30.00 in wasted fees.
If you have a little one (or maybe yourself – no shame!) that is scared of the dark you may want to consider a solar option. A traditional night light will run about $6.00 in extra electricity costs per year. Solar lights may not provide quite the lumens that a plug-in light will but it should be more than enough to keep any scary creatures at bay!
Every sheet of paper you print can run you about $0.06. Assuming you print one thing off weekly that you can save on a phone, tablet or computer. You’ve spent an extra $3.00 without thinking about it. Make notes on your phone or tablet where possible, and make sure you only print what is needed. When you are done with the piece of paper – flip it over and use the other side for notes, to-do lists or even your weekly shopping list. This isn’t just about saving money, it is also about being green!
Timing on Filling up Your Car with Gas
This is difficult because it is super regional, but it is not uncommon in Canada for gas prices to go up as you get closer to the weekend. People tend to travel more on the weekends (going to the summer cottages) so the price increases with demand. In looking at average fuel costs in my area I found that gas prices mid-week tend to be a few cents per liter less than at the end of the week. Assuming an average tank size of 45 liters at a rate of 1 tank per week – filling up Friday might run you an extra $45.00 every year. Amazingly (sarcastic face), the gas is the exact same quality on both days.
Taking these 5 leaky faucets, that adds up to almost $100/year. You might want to tighten up that faucet, using the same investment numbers as earlier in this post over 30 years that would be a whopping $7,200. That isn’t a drip…that is a full on downpour.
I know it is quite often worth it to pay a little bit more for the little conveniences in life. It isn’t always fun to squeeze every last drop of efficiency out of our income. Just keep your eyes open for opportunities to reduce costs on those things that don’t have much of a factor on your life. If you stop justifying making choices based on the thinking of “well it is only $___”, you’ll end up with a whole lot more $.
I believe it was Benjamin Franklin that said “Beware of little expenses, a small leak will sink a great ship”. And you have to listen to Franklin – he invented electricity! JOKES
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