None of us like to waste money, nor think that we might be, but sometimes expenses creep into our lives and we don’t realise just how much they are costing us. I once worked with a lady who worked 5 hours a day so that she could get her kids off to school in the morning and be there for them at the end of the day.
She was always moaning about how little money she had. You see, she would come to work with a coffee, she’d buy her lunch every day and buy another coffee too. On average, she was spending $ 15 a day, that’s $ 75 a week. She made lunches every day for her two daughters and I suggested she could save at $ 10 a day if she made her own lunch too. And she could save the other $ 5 a day if she made her coffee at work. Now I’m not a coffee drinker, but I do understand that there’s a vast difference between instant coffee and barista made coffee.
And then there was another lady I knew who loved the glossy magazines, you know the ones, both home and food magazines. We worked out that she spent $ 200 a month on those magazines and she was wondering why she found it difficult to save money.
These are both examples of conscious spending, albeit they had become habits for both ladies and they hadn’t really stopped to think about just how much it was costing them.
But then there are the insidious costs that creep into our businesses. You know the ones, those that are automatically charged on your credit card month after month, and because you don’t actively pay for them, you may not realise just what you’re paying for.
Added to that, but the chances are that your accounting system will have these expenses hidden under various categories where you’re not seeing them when you look at your reports. This is particularly prevalent when you have a bookkeeper who reconciles your financial records.
I’ve been guilty of this in the past myself. I used to use GoToMeeting to run webinars, but then I stopped doing the webinars. A few months went by and then I realised that I was paying the subscription but not using it, and then I thought that I’d start doing webinars again soon so I kept paying for a few more months, until I finally decided that I really should cancel the subscription and re-start a new one when I needed it.
The same happened with Audible, I had great plans for listening to books, but then I never found the time to do so. Month after month the payment would go through until I eventually made the decision that I just wouldn’t use the service and so cancelled it.
Another situation occurred when I transferred from one system to a replacement system, but kept paying for the old one. I paid a few months more than I needed to have done whilst at the time justifying that perhaps I might still need to go back…
The difference I have found between what I’ve done and what I’ve found with people I work with, is that I have my accounting system set up so that every month I can see every one of those monthly subscription amounts listed separately on my reports. That way I know what I’m paying for and can easily make the decision to cancel quickly when I’m not using the service.
I highly recommend revamping your accounting system so that each and every subscription is listed separately and then review the list each month to consciously make a decision about whether you are using the service or not. And if not, cancel it immediately so that you don’t waste money on something you’re not using or getting value from.
We all hate wasting money, so check your records and make sure you’re not wasting money, particularly on the monthly subscription services. You might be surprised at how much money you are inadvertently wasting and can now save by making this one small change.