You know the old saying, “a penny saved is a penny earned?” Our parents used that saying to tell us that even a small amount of savings can eventually become a big amount down the road. Personally, I have never subscribed to it. To me, a penny saved was not worth the effort. I’m sure I’m not the only one who thinks that. This is where the impulse purchase comes in. They’re designed to take our pennies.
How many of us see something we like and say, “It’s only a few bucks. That’s not going to break me.” I always thought that way for a long time. Then I realized this is how I make my money – with a click here and a click there. By themselves, the clicks make less than a dollar. However, added over the course of a month and they run into the tens of thousands. There is a lot of money in nickel and diming.
Many years back, a financial planner asked me track my all purchases for a month by writing them down on a small notepad. Being the tech guy that I am, I used a Pocket PC and MS Money. He asked me to begin the month with an estimate on how much I think I will spend and then compare it to the real number at the end of the month.
The experiment was very enlightening to say the least. I completely blew my estimated budget. You have no idea how those little purchases can add up quickly until you see it all in front of you. All those nickels and dimes really do add up.
The exercise did change my spending habits – I don’t buy thing as impulsively as I used to. Most people keep an eye on their big purchases but they really should be keeping an eye on the impulsive ones. Impulse purchases are like clicks to my Google ads – it’s only nickels and dimes but they add up really fast.