5 Bucks Matters
By Tana Gildea, CFP®, a CPA, and a Certified College Planning Specialist, and author of The Graduate’s Guide to Money
I didn’t start my career as a financial planner, so I bumbled and stumbled my way along my financial journey making LOTS of money mistakes. The worst one was a mindset of “it’s only 5 bucksy; it’s only 10 bucks; it’s only 3 bucks.” It only adds up and up and up, though, and that’s the problem. Little amounts add up to big amounts when they are repeated over and over.
Most of us can’t process how many “5 buck” items we toss in the cart, swipe onto our credit card, or let dribble out of our wallets over a month’s time. We don’t feel like we have spent much money, yet our wallet is empty, our credit card statement is shocking, and the bank account is riddled with negatives. I have had $1,000 credit card bill where there was not one charge greater than $50. $1,000! That’s “buy furniture money” or “make a massive student loan payment” or “take a trip money.” But no, I had none of that.
Here are a few tips and tricks to help you plug the hole in your bank account:
- Only use your credit card for things you must buy like groceries, gas, and doctor’s visits. Have those items built into your spending plan so you can pay off the balance every month.
- Use cash for the want to have things – all of those 5 buck items. You decide, in advance, how much is in your plan for “this, that, and the other thing” and then be sure to have it in cash. Spending cash feels like giving up something (because you are!) and it keeps you fully aware of how much you have spent and how much you have left to spend – no surprises.
- Have enough cash available to cover big purchases you make like furniture or electronics. You will have to plan ahead and know what the “all in” cost is before you get there. Make a game out of finding free or nearly free things to do with your friends and family. Challenge each other each week to come up with an alternative to eating out or spending out on the weekend. I bet your activities will be a lot more memorable too!
- See how many days you can go in a row without spending any money (especially your cash stash.) When you gamify something, it becomes a fun thing to do and not a punishment.
- Of course, make sure your savings is going automatically into your retirement plan and your savings account each month. The old “pay yourself first” rule is alive and well, and easier than ever to implement.
- Whenever you hear that voice in your head start to say, “It’s only…” I want you to hear my voice finishing that sentence: “…YOUR HARD EARNED MONEY AND YOUR FINANCIAL SECURITY.” Because every dollar is hard-earned and it all can go toward your financial security if you don’t let it drip away 5 bucks at a time.
I now laugh when I hear those words, but honestly, 5 bucks matters. It matters if it’s falling out of your wallet; it matters if you are paying just 5 bucks more on your debt, and it matters if you are saving just 5 bucks more toward your big dreams. I hope you become wildly wealthy, 5 bucks at a time.