Financial quandary: What if you’ve already cut the corners?

Periodically, I see articles like this one, titled “Turn $1 a Day Into $67,815.”

These kinds of tips are inspiring, and I’m fortunate enough to be able to stash away $1 a day (and I think I’ll try to start after reading his final figure there).

But the author’s suggestion is that $1 a day is just the change from your purchases that day. I’ve seen other articles suggesting that the way out of debt is to not spend $5 or $10 a day and instead apply it to your debt or save it.

I feel like I live like a pretty normal bourgeois American, but I don’t spend $5 a day or $10 a day that I could cut out. Sure, some days I do spend that much — but generally, no. I do have a jar where we collect the day’s leftover coins. I get up to about $40 every three months or so. That’s half his minimum level.

The author has some specific suggestions for how to save even more – he projects $123 per month easily. His suggestions are:

  • Take-out vs. dining out once a month – save $45 a month
  • Manicure less often – save $15 a month
  • Fewer trips to car wash – save $12 a month
  • Video rental vs. movie monthly – save $11 a month
  • Regular coffee instead of a cappuccino on weekdays – save $40 a month

The total annual savings of $1,476, he says, could grow to $278,040 in 30 years.

Now that’s just depressing.

  • My dining out bill is usually closer to $35 for our family, so even if we substituted take-out (does this mean something like Chinese? That costs about $16) we would save $19.
  • I never get a manicure. Save $0.
  • I go to the car wash about every three or four months. Don’t think I’d better cut that down. Save $0
  • We might go to a movie once every six weeks or two months. If I cut that out I’d never go. Occasionally we rent a DVD from Redbox for $1. Otherwise we get them for free at the library. Save $0.
  • Regular coffee instead of a cappuccino on weekdays – aha! I do buy a latte, sometimes twice a week. I wouldn’t bother buying regular coffee out. Save $30

My total savings if I completely eliminate coffee out would be $49, not $123. That translates to $588 a year or $105,589 after 30 years.

It’s not so shabby, and likely worth doing. After all, $100k is nothing to shake a stick at. But if you already live relatively bare, cutting out “just a few luxuries” can feel like cutting out everything.

The quandary, then, is: Do you cut out “everything” and save, save, save, or do you throw your hands up and figure you’ll worry tomorrow?

I usually try to strike a middle ground. I don’t save our change jar proceeds for retirement — we either earmark the cash for date night or put it into our Christmas gift fund. Sometimes I am content to cut out “everything” (which I put in quotation marks because as a middle-class American, I’m rich by the world’s standards even when I feel I’ve eliminated all my luxuries). Other times I simply must have a latte, and I go ahead, and figure I’ll start again the next day.

Are you good at stashing away “extra” funds? Do you have a failsafe savings strategy? Do tell …

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5 thoughts on “Financial quandary: What if you’ve already cut the corners?

  1. Meghan says:

    Oh, I feel your pain. All of these articles appear to be aimed at people who are just getting started with financial awareness. I have the worst trouble finding anything directed toward anyone at the “intermediate” level.

  2. L'an says:

    Ha! We’ve commiserated on this before… and I still don’t have a good answer.

    Maybe I’m just selfish in not wanting to give up certain things. Actually, there’s no maybe about it. I *am* selfish about certain indulgences. I know and value the wisdom which says you should set aside today’s little indulgences in favor of something bigger and better down the road, but in my experience, the stash I manage to set aside for… say, a couch to replace any one of the three hand-me-downs that are in various states of utter disrepair… invariably gets mostly depleted replacing some vital part on the car or replacing the hot water heater or whatever. So a chai out once or twice a week becomes a nicety that I don’t have to postpone indefinitely.

    All that said…

    I love love love automated savings. I direct deposit part of my paycheck into an account I don’t have easy access to (can you do something like direct deposit when you’re self-employed?). And I’ve created a rather byzantine but effective set of automatic transfers and automatic investments, so every week a few dollars move from the “regular” account into the “out-of-sight, out-of-mind” accounts, which eventually go into an investment account.

    I figure that this way, when I get lazy about tracking our finances, we’re still socking away a bit of cash to pay for the car repairs, maybe the couch, and oh yeah, our old age.

  3. L'an says:

    Okay, one other comment here: I checked out the article on ‘a dollar a day’… and although I see the point, I also have a question: how many of us actually still have “spare change” in our pockets at the end of the day? I have taken to just not using cash because then it just gets… spent. I don’t do that with the debit card (and I’m always careful to use debit, not credit). So what’s the debit-card-era answer to pocket change?

  4. Meghan says:

    I’d suppose it’s to set up something automated to go to an account daily or weekly. But it’s funny that you point out your tendency to spend cash versus the care you take with your debit card. I’m opposite – I whip out my debit card and feel no pain. But if I use cash, I find myself thinking twice before committing to a purchse. I throw the spare change around my place in a piggy (err, ducky) bank weekly. When it gets full, I deposit it & send it to my ING account.

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