When I lived in Zimbabwe I spent all day out in the ghettos teaching about the gospel of Jesus Christ. As you can imagine there was a lot of very very poor people that I met and learned to love in those two years. The color of my skin made it very obvious that I was an outsider there. And as you would expect, I had people asking me for handouts every day. One such time made a profound impact on the way that I view "small purchases".
I was out in the street talking to people and was approached by a man who appeared to be in his thirties somewhere. He started trying to explain to me, a nineteen year old kid in a white shirt and tie, the financial situation that he was in. He explained about how he couldn't find any work and how he couldn't even afford to buy bread for his kids.
During the story I realized that he has an unsmoked cigarette tucked behind his ear. So I asked him how many cigarettes he usually smokes in a day. This was several years ago so I don't remember the exact numbers that he told me but I think it was somewhere around 4-6, so we'll say it was 5 to make the numbers easier to deal with. Then I asked how much each one costs. I think that the number he told me converted to around $0.10 USD per cigarette.
Ten cents, that's nothing to calm your nerves in a difficult situation right? Well, that's what he thought too, until I started doing some math for him.
The obvious short term pick up would say that if he didn't smoke for that day he would be able to have enough in savings to be able to take half a loaf of bread home for his families dinner. He caught that implication immediately but his mind looked blown as I continued.
5 cigarettes a day is 35 a week, which is 140 a month, which is 1,680 a year which translates to about 183 loaves of bread.
I think that I kept going but I could tell that he had shut off by this point. I don't know if he ever quit smoking of not but I was able to help him see that his habit was stealing food from his kids mouths.
If you don't smoke you might be thinking, "Nice story but how does this apply to me?" I thought that for a long time too since I don't smoke either. If you do smoke, Quit!, it is costing you a fortune but I'll get farther into that in a different article.
A few years later I learned that this was the beginning step of a personal finance principle called The Latte Factor which has exploded in recent years.
Here are some ideas of other things that are causing you to burn your money:
Cable package, alcohol, phone bills, eating out, lunches, gas, coffee, heating/cooling, sodas, food, magazines, gym memberships, new technology, clothes, banking fees...
You know what it is that you are wasting money on. Something that you could give up if you really wanted to? Which one of your habits is stealing bread from your children's mouths?
Today I want to ask you to take a few minutes. Sit down with your family, if applicable, and write out a list of all small things that you are spending money on that you could cut back on if you had to. Lable the top of the paper with your motivation for saving money, ours is paying our mortgage and being able to retire ASAP. Then circle just one item on your list that you are going to work on cutting back on. When you've succeeded in cutting that item back as much as possible, cross it off and circle the next one that you want to work on. Put this list somewhere where it can be seen daily and add to it as needs arise.
We'll get there.