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BVC #22: Big Impact of Small Everyday Spending [VIDEO]

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All too often we go through our lives spending a little here, a little there. We make these purchases automatically because they can be so small and so routine that we forget we even make it. A lot of these things are habits, like smoking, or they’re part of our daily routine, like a cup of coffee in the morning. In this video, I talk about how you should take a look at all those small purchases because over time they can accumulate into something bigger.

I also want to thank the fine folks at Intuit and TurboTax for supporting Bargaineering and sponsoring this video. With the end of the year coming, you’re bound to see a lot of tax related articles everywhere as people give advice on what you should do before the end of the year, so it’s fitting that TurboTax is the inaugural sponsor of these videos. If you’re on Twitter, I invite you to follow @TurboTax for more information on tax and product news straight from the experts.

Bargaineering #22: Big Impact of Small Everyday Spending from JIM WANG on Vimeo.

And before you go, one thing I want to emphasize was that the point of this video wasn’t to convince you to avoid making small purchases like coffee and cigarettes. You should spend your money on whatever makes you happy, but I believe understanding the full impact of those decisions is important in making that decision.

What are you thoughts on the video? If you like it, I would love it if you could leave a comment or tell Vimeo you liked it!

{ 22 comments, please add your thoughts now! }

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22 Responses to “BVC #22: Big Impact of Small Everyday Spending [VIDEO]”

  1. anthonyvogl says:

    I decided a while ago that I was going to cut out the cup of dunkin donuts coffee on a daily basis. Now I treat it more as a treat, or if I need to get up really early and need a decent cup to get me going. I also have grown used to the coffee at the office and can usually wait until I get in for my first free cup.

  2. The Other Schmitty says:

    The thing about spending $10/day on cigarettes is that after forty years of smoking you die of lung cancer anyway, so that $400k you could save won’t do you any good.

    I guess that’s the invisible hand at work.

  3. Studenomist says:

    Great video Jim! You ever consider working as a professor?

    A pack of cigarettes in Toronto is $10 (sinners tax). Quitting at the end of high school was win-win idea. Health improved and as did my wallet.

  4. Moneymonk says:

    LOL @ other schmitty

    I’m glad you said at the end “do what makes you happy….as long as you are aware of the costs”

    We all seen these kinds on charts where if you buy a soda every day in 40 yrs you would have wasted x amount of dollars. It’s not a waste if it enhance your happiness

    I say do both!! If you have a nice 3 month cash cusion for rainy days, investing a set percentage of your income for retirement each month and avoiding consumer debt, well yes, you can do what you want. SAVE first, then buy your little luxuries that way you won’t have a guilt trp.

  5. Moneymonk says:

    LOL @ other schmitty

    I’m glad you said at the end “do what makes you happy….as long as you are aware of the costs”

    We all seen these kinds on charts where if you buy a soda every day in 40 yrs you would have wasted x amount of dollars. It’s not a waste if it enhances your happiness.

    I say do both!! If you have a nice 3 month cash cushion for rainy days, investing a set percentage of your income for retirement each month and avoiding consumer debt, well yes, you can do what you want. SAVE first, then buy your little luxuries that way you won’t have a guilt trip.

  6. Leyan Lo says:

    Warren Buffett always thought of the compounding effects of every dollar he spent. That’s why he was so frugal. Every dollar would become ten dollars in the future, and in his mind they were the same.

    The balance between frugality and living life is interesting. Thinking about this kinda reminds me of the story of the Mexican Fisherman:
    http://www.inspirationpeak.com/shortstories/mexicanfisherman.html

    I really like the way MyMoneyBlog talked about how spending $1 less is equivalent to earning $2 more. It’s just another way of looking at saving money.

  7. It makes me sad when a friend of mine complains that she doesn’t have any money, but then spends $6 a day on really bad cafeteria food because she is too lazy to bring a lunch. That is $120 a month right there!

  8. mike says:

    Jim,

    Thanks for the video. The “latte” factor is definitely a money 101 topic that people must be aware of.

    One thing that I think would’ve have been cool to add, is if you also covered the “cost of waiting”. I think pretty much everyone knows that they need to save those daily dollars and in the back of their mind, I’m sure a lot of them are saying, “I’ll do it someday”, “I’ll start saving later”, etc. So I think if you showed people how much they would lose out if they waited 5 years, 10 years, 15, etc. This really shows the true power of compounding interest. :)

  9. LeanLifeBlog says:

    @MoneyMonk – If you are aware and you make the choice that’s one thing. But how many do not appreciate the long term impact of their decisions?

    @Leylan Lo – Good point, you must balance. If you manage your life right you should have the benefits of a decent life today and a comfortable life tomorrow. As noted above, most are not aware, they are spending their future today.

    It is always easier to save a dollar than to make a dollar! I prove it here… http://bit.ly/8wpvD

    Great job Jim!!! Keep of the good work.

  10. Chris says:

    Quiting smoking was the best thing I ever did for my health, but equally satisfying for my budget. I loved smoking…now I love the savings.

  11. Foo Finance says:

    I should also point out that for the coffee and lunch numbers you should factor what it would cost to bring it. In most cases you don’t eliminate the cost entirely. If you make your own coffee that still costs a little and lunch certainly has costs if you bring it from home.

    I would re-run the numbers on the difference in costs as opposed to the entire amount to be more realistic. The only exception is smoking where if you stopped the cost would really be zero. I would also make the smoking example for 365 days as you most likely smoke everyday.

    Either way the video makes it’s point. As long as you have the discipline to put that money you save into investments and not spend it in some other way it will most certainly pay off!

  12. zapeta says:

    I finally got a chance to check this out…great video!

  13. Matthew says:

    Great video, it’s so true!! One of my biggest problems is spending small amounts. Working on a budget to help reduce it but this rely put things into perspective for me.

  14. Matt Jabs says:

    Great stuff Jim. What you discuss in the video is exactly why my wife and I started keeping spending journals. Nothing has been more effective in our lives than tracking every penny. It’s way easier than everyone thinks it is and is such a huge help.
    Cheers man.

  15. pcallaghan says:

    My girlfriend and I used to go to Starbucks EVERYDAY… talk about expensive, $3 a day (conservative) times 2 times 365 amounted to $2190!! Never really thought about it till recently… if only we had saved the money from the beginning of our relationship, we’d have an extra $3500 (taking some money off bc we bought an espresso machine,which makes actually good tasting espresso, unlike starbucks)

  16. Daniel says:

    Another good video Jim. It always blows my mind when I hear about someone who has no money and is struggling with debt – yet they smoke a pack a day.

    I’ve always “sweated the small stuff” when it came to money and spending. The concept of money making more money, or putting every dollar to work for you, is the mindset that has helped me make great strides in the last few years.

    I picture every single dollar, literally, as an employee of mine. When I save one dollar, I am sending him off to work for me. The more employees I save, the bigger my workforce, the more profit I earn.

  17. Wilma says:

    Good video. You didn’t factor in the cost of using your own mug for the coffee you make at home. You save money and land fill space as well as time standing in line for the coffee and gas going out of your way to get the coffee. Time is a premium these days and I cherish it more and more because if you can saunter into work with some time to spar instead of blazing in the door and to the time clock it really is the difference between a good productive day and a stressful wired day. Time management is a kin to money management.

  18. Great discussions in this post. There’s several factors that an individual has to weigh over their small purchases, and those factors will vary depending on the individual.

    Can a single mother of two children afford to eat out everyday at work on a $20K salary? No way. Can Steve Jobs afford to eat out for lunch every day? You bet. Time is a crucial factor for some individuals. An executive would gladly fork over the extra hundred dollars for lunch every week to spend more time at the office doting over reports. A middle class mother who keeps her finances and investments in good shape may also deem it worth spending the extra $50 a week to buy lunch so that she can spend her free time at home with her family.

    However, the more common reality is that the small purchases do squat away our wealth like you said. It can only help the bottom line to evaluate your purchases and attempt to reduce. I easily go days without spending a penny anymore, and it feels great!

  19. anna says:

    wow.. nice.. it helped me understand my research..

  20. David says:

    Jim Wang I think you could do a video on the costs of having a kid which is astronomical compared to compounding $10/day @ 6 percent.

  21. FlyFisher says:

    So true! Save a penny make a penny…


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