Let’s save some money! Once you’ve tracked your expenses - for a week, a month, or longer - I bet you’ve found a few things you can spend less on. And, I’m guessing you had a moment of, “Holy crap, I spend THAT on THIS!?” Yeah, we've all been there. (See: my shoe spending in 2013.) Is your wealth sneaking away from you in your shopping cart?
I’ve had the chance to review the expenses of many women - as a money nerd, I happily comment on and offer to review budgets. Here are the categories I find cause trouble for most women:
Food. Groceries and restaurants often represent one of our largest monthly expenses. Higher food costs often result from a lack of meal planning.
If you don’t plan your meals, you’re vulnerable to takeout and restaurants. We’ve all been there, hungry and without a dinner plan. Call the Thai place ASAP! This habit can add up to thousands of dollars annually for lunches alone. I enjoy restaurants, but go out meaningfully and occasionally (versus by default).
If you’ve skipped meal planning, you may enter the grocery store without a list. This puts you in a position to look for inspiration while shopping, which costs in two ways. First, you’ll pay more as you impulsively add items to your cart. Second, you’ll be more vulnerable to food waste - throwing away spoiled food that never made its way into a meal. Yes, actually throwing money away!
Drink. Enjoying a few cocktails at the bar can sneak our money away from us. The recommended markup for bar drinks is 75-80%, and provides an important source of restaurant profit. However, that doesn’t give us an excuse to blissfully over-indulge. Invite your girls over and learn how to make your favorite cocktails. Look for lower-cost but delicious wines like Bota Box (a Wine Enthusiast best buy wine) and raise your glass to the savings. Cheers!
Cell Phones. Providers like Republic Wireless and Virgin Mobile offer affordable, month-to-month plans. If your monthly cell bill is more than $40, you owe it to yourself to consider switching! These low-cost providers run on the same networks as the big guys and don’t require contracts. You may need to buy a new phone initially, but the cost savings can be tremendous.
Gifts and Presents. Gifts can be a double-whammy. Events like birthdays can sneak up on you (creating a surprise expense) and there is tremendous social pressure to gift generously. Gifting often falls disproportionately on women, who are often purchasing on behalf of others. I suggest budgeting for regular gifts, and giving memorable experiences or high-quality homemade gifts.
Most of us do not need more “stuff” but would appreciate an experience tailored to our interests. Think about gifts like: a restaurant-quality meal at home (served, cooked, and cleared by a close friend); a museum, art gallery, or winery visit; or a carefully planned day hike complete with a delicious picnic!
Beauty. This is a tough one for women. It’s incredibly easy to fall prey to the $60 billion dollar beauty industry. But, do we really need all the makeup and skincare goodies we buy? Will the latest miracle cream be that much better than what we're already using? Haircuts, coloring, makeup, and skin care represent a huge expense for women.
I used to spend a ridiculous amount on high-end skin care and makeup. Each individual purchase was small…until I added them all up. Now, I’ve switched largely to drugstore brands. For example, I splurge on Kiehl’s sunscreen and Dermalogica moisturizer, but buy Maybelline makeup, and wash my face with Dove.
For kicks, I compared my Maybelline Great Lash® mascara to YSL’s Mascara Volume Effect Faux Cils - the price difference was 400%! If you love mascara, this may be well worth it. But, if you splurge on every beauty purchase, these “small luxuries” will add up and create a barrier to saving and investing.
Target, Costco, Kohl's. Your store may vary, but this concept comes up all the time! This is the store you “swing into” for one item, but leave with a full shopping cart. “It’s just shopping,” you may say. But over time, you’re putting less and less wealth in your pocket.
Stores are carefully designed to separate you from your hard-earned money. I don’t blame the retailers - they don’t force us to spend more than we planned! However, next time you go to “your” store, stick to the items on your list. Before making an unplanned purchase, ask yourself, “Do I really need to this item?” This will prevent money from sneaking out of your wallet!
The most important action to take when you’ve freed up some money? Save it, automatically.
How? Let’s say you decide to cut the cord on your $150 cable bill (seriously, *do it* - more on that later). Immediately set up an automatic deposit for $150 to your savings at the same time your old cable bill was due. You will not miss the money, you will not “accidentally” spend it, and it will be creating a lot more wealth for you each month. Boom!
What are you trimming back on? Are there different categories you spend too much on? Let me know. Managing what you spend is hugely important in creating the gap between income and expenses, which is where real wealth comes from. You got this!
xoxo, Ms. Financier
A version of this post also appeared on the Fairygodboss blog - I love their mission to improve the lives and workplace for women, through transparency.