Sandra Gilpatrick, CFP ®,CDFA™

With Budgeting; Small Bits Add Up

We are all busy getting though our daily lives. It can be difficult to carve out any extra minutes to make changes in our routines. However, I have an enticement… how about if it could save you some money each month?

I recently switched my mobile phone carrier and starting saving about $15 each month. Now, I understand, $15 is lunch money. Nevertheless, in a year’s time this adds up to $180. This led me to find a way to get a carrier’s absolute best price. By telling my former carrier I was “porting” my phone, it tipped them off that I was looking to switch carriers and I was offered a lower monthly price. You may try that as a bargaining tool.

Another small money saver for me was a decrease in my credit card interest rate. One of the many reasons to strive for an excellent credit score is that it can give you better bargaining power for lower interest rates from lenders. It’s rare I have anything but a nominal balance, as I pay my bill off in full each month. However, this tip will be more meaningful for those who carry more of a balance. After not checking my interest rate for a few years, I decided to click on my annual percentage rate (APR) and thought it looked a tad high. After seeing this, I phoned a customer service representative at my credit card company. Just a brief hold and review with his manager, and I was immediately knocked down 2% on my interest rate.

An item for annual review is subscriptions. Make sure you’re enjoying and actively using your subscriptions. These could only be $5 per month, but remember that is $60 per year! If you’re not using it, why pay for it?

I’ve trained my son to think long and hard about purchases over $5, which is nearly everything. I make him stop and think about the utility of the purchase including how often it would be used, even how it was manufactured (unfair labor practices or environmental impact he’d support by purchasing). Also, what else is he forgoing by purchasing this particular item? Is there a different purchase that would be more important to him? Instilling general good financial habits early is helpful. It’s a good lesson for us all, as our unconscious purchases can add up to more than we realize. With good daily habits, an occasionally small unplanned purchase won’t be as worry-some on your budget. My son decided it was worth $6 to buy an ice cream from a vendor on a summer day. I fully supported his decision and asked to nick a bite. While it is true that any one of these small types of savings will not make a drastic difference in my financial life, the practice of being diligent about being on top of my finances, will make a difference over time. 

Being mindful of purchases, no matter how small will create good financial habits. I try to be flexible in my spending. If I see strawberries on sale, I’ll buy them over the raspberries I might have had on my shopping list. Good luck on trying some of these ideas. I hope they might be helpful for your budgeting!