Personal finance is an area that most people would probably say they struggle with in some form or another. It is, sadly, not something that is covered in many schools, so oftentimes young people come into adulthood with all its responsibilities and expenditures without being truly prepared.
I'm a planner by nature and finance falls into line with that, but I will be the first to admit, I'm not always as strong in my financial planning as I am in, say, planning a family vacation with all of its lodging, dining, and activities. I'm a transcriptionist full time with a seasonal job that I work a few times a year, and I have a reasonable idea of my income for each year. I like to sit down near the end of each year and look at/plan any extra output I may have for the upcoming year, be it travel, vehicle expenses, or maybe a necessary purchase such as a laptop or phone. Obviously, we all have those unexpected surprises like a home repair, vehicle breakdown, etc that we can't plan for in detail. However, by figuring out what trips we'll be taking, what tool or device I have that may need replaced soon, and a general idea of what/if my car might need some work done, I can get a decent idea of my extra expenses for the year. This gives me the ability to put some money away each paycheck to be used specifically toward those costs, in addition to my regular savings that won't be touched except in case of absolute emergency. A savings goal calculator is a great help to see just how much that little bit each week will grow over the years.
One thing I have started working on recently is to stop spending little bits of money here and there on extras, and instead to put that money into my savings. I love coffee (as if my blog name didn't give that away!) and it is all too easy for me to swing by Starbucks or Dunkin' Donuts to grab my favorite beverage whenever I pass by. Even the cheaper of the two options ends up being a $10 or more expenditure every week if I stop in 5 days. Doesn't sound like much, right? And yet, that adds up to over $500 a year that I'm needlessly spending on coffee! Add in the fast food, snacks, and sodas I pick up just because it sounds good (not a necessity while traveling or in need of an actual meal), and I realized how quickly I spend a good amount of money on "extras" in my day to day life. So, the plan I came up with recently is to allow myself an occasional splurge (pumpkin spice latte season is just around the corner, after all!) but to honestly look at what I'd normally spend on coffees or other extras, and put that amount of money into savings each week. It may not sound like much, but I'm excited to see how my savings will grow as I put this into practice.
I recently read a study that said Americans in 2019 spent an average of $18,000 (in one year) on non-essential items. They broke it down into categories such as eating out, impulse purchases, etc. While some of the categories don't apply to me (I've never used a ride share service and don't have a gym membership, for example), the coffee was calculated at $20 per month and I KNOW I spend more than that on coffee each month! So, after seeing the aforementioned article and then taking a good look at my own expenditures, I am determined to make changes going forward.