I tended to think about money in two ways – everyday spending and larger financial goals (for us, mostly travelling and retirement planning). (If you prefer video, scroll to the bottom of this post.)

What I’ve noticed though is that most people don’t think of those two ways of spending as one thing, we divide how we think about our spending. What if we were to bring our everyday spending into line with our larger financial goals?

Take a minute to consider if your everyday spending habits support that larger goal. If you’re not sure, here’s a challenge for you to try.

Print off your banking statements for your bank accounts and credit cards for last month. Physically print them off so you can make notes on them.

Categorize the following (I used different coloured highlighters for this visual exercise):

• Mark your non-negotiable payments – rent or mortgage and utility bills.
• Highlight your monthly subscriptions. This includes anything and everything you pay for that’s an automatic payment from your accounts or to your credit cards. Add up the monthly total.
• Highlight your grocery spending (without restaurants.) You may include in here paper products, pet food, and cleaning supplies. Calculate the total.
• Highlight your restaurant spending and calculate that total.
• Highlight your entertainment or “random” or “other” spending and calculate it. Make note of what kind of things you spend this money on.
• Continue noting any other spending categories until you’ve accounted for the whole month.

Don’t make any changes yet. The purpose of this exercise is to see in reality the amount you’re spending in various areas. This is the wake up call. Did any of these spending categories surprise you?

Think about your larger financial goals, then ask yourself if your day-to-day spending last month supported those goals?

Now go through each category of spending and while thinking about your bigger goals consider the following ideas:

Subscriptions

Look at each subscription individually. Which ones do you use regularly? Which ones have you not used? Even if you use them, do you need them? What would you use instead if you didn’t have that subscription? Do you need all of them at once?

For example: when my husband and I did this exercise we decided we didn’t need three TV streaming services all the time. We can pay for a different one at different times of the year. We cut our services down to one that we currently watch more than the others. We will switch to another one in the fall for three months to catch up on shows there and then cancel it again, then pick up a different one for three or four months to catch up there. This also allows us the option to try other services that we haven’t thought of before because we only need to pay for one at a time for a few months at a time. This saved us $30/month.

Some other service subscriptions I was paying for “family” plans where it turneds out I was the only one using the service – so I reduced the plan to individual and saved about $40/year.

Now you might be thinking, like so many of us do, $40/year, that’s like $3 a month… so what? Well, we easily $5, $10, and $20 buck ourselves to broke. Why give away our hard earned cash to someone else frivolously when it could be in our pocket, just because we’re to “lazy” to change a subscription setting? Those small expenditures add up, and that’s what we’re going to see with this exercise.

Normally we’d have paid for a gym membership year around, using it or not. However, this year, we had a conversation about our gym usage and if it was realistic to pay for it over the summer. We decided it was not worth paying for June, July, and August when were naturally busier and more active outside. So we put our membership on hold for three months, saving us $300. This payment will come back into play in the fall, but why give away $300 for something we’re not actively using in the moment? It was a simple email to put our membership on hold.

Groceries/Restaurants

I calculate our grocery spending separate from our restaurant spending intially to get an idea of where our food dollars are going. Then a quick calculation to combine the numbers just to see the total food budget. When you look at your totals for groceries and restaurants do those numbers sit right with you when you think about your larger financial goals?

In our home we were underspending on groceries and overspending on restaurants. We needed to change our habits. We came up with some eating out ground rules and also changed our meal planning and grocery shopping routine. Again, being busier in the summer we eat out more often than we do in the cooler months and made restaurant arrangements accordingly. With a renewed focus on cooking at home, we signifacantly dropped our food spending dollars by $200-300/month.

Entertainment/Other/Random

How much do you spend on “other”? When considered against your larger financial goals, how do you feel about this spenidng? When you think about what you spent this money on is it planned spending or impulsive buys? Do you remember what you spent this money on?

Being a minimalist home, our impulsive spending is quite under control, but that didn’t mean that we couldn’t consider more carefully where we’re spending some of our “other” money.

A huge savings came in with my husband deciding to quit smoking… (shh, he doesn’t want me to tell anyone.)

So that huge secret, plus making the other adjustments as stated here, we saved over $1000 month. You’d be surprised how $10 here and $20 there adds up. It was easy to say well Netflix is only $18/month or Disney+ is only $10/month… but combined that’s $30/month (rounded) or $360/year – put that money towards your larger financial goals instead. Be careful about getting caught up in the “but it’s only a few dollars” excuses for continuing spending where it’s not necessary.

It’s also not about never spending day-to-day dollars on entertainment or going out for dinner. We can’t be so strict with ourselves or we’d rebel. It’s about giving ourselves choices and guidelines to do these things intentionally rather than impulsively or routinely. This keeps in mind that our daily spending and our bigger financial goals are in line with each other. This is how we can meet those goals. Little by little adds up.