Once you start the journey to financial independence, you realize that every dollar counts. And that every dollar saved means you are one step closer to financial independence. It’s not even a one-to-one ratio (i.e., a dollar saved is a dollar earned). When you factor in compounded interest, every dollar saved is more than a dollar earned. At least… this is what responsible people would say. Me… I still like nice things. And if I didn’t have a latte every once in a while, I would have brittle bones since I don’t otherwise drink milk. But, before you criticize my latte habit, please know I consider lattes a luxury–not an everyday indulgence (though arguably it’s a slippery slope, going from “I deserve this latte” to “I deserve a week at a luxury spa” (though I really do!)) Without a little luxury every once in a while, waiting for financial independence becomes mundane and intolerable. You can’t just cut out everything you enjoy. Besides, I eat plenty of rice and beans to “make up” for it. However, the virtues of life’s little luxuries and how they fit into the goal of becoming finacially independant is not actually what this post is about. Not completely. This post is about using those little luxuries as motivating factors in how you decide if your efforts at some form of saving are “worth it.”
I am going to buy a latte every once in a while. Probably once a week. It’s just something that is going to happen. But it doesn’t mean I have to be mindless about it. For some time now, I have used lattes as my gauge for the value of savings I can seek. What I mean is that I tend to think of every dollar, or portion thereof, saved as worth saving because the value to me is tangible. A lot of people don’t bother, for example, questioning a grocery receipt for the $1.34 they were over charged on veggie burgers, or returning a screw from the hardware store that is worth fifteen cents. They think it’s not worth their time and energy. But I disagree. See, these things add up. I can put forth a small effort and, very quickly, get the equivalent of a latte–something that I consider a luxury, remember? This is not to say that every time I can eek out a savings of a two to three dollars I immediately go buy a latte. Rather, it means that at that moment when I’m about to walk out of a store and ask myself, “should I bother to go back inside and get the price difference,” the answer is always yes.
This moment when you question the value of your time happens far more often than in the grocery store. It occurs in late fees, service fees, price quotes, being unsatisfied with a product…etc. In my estimation, no fee is too small to not bother making a phone call to request a reversal. No overcharge is not worth your time to question. A discount is always worth seeking. Because, small amounts add up to big amounts.
Admittedly, it is hard to see the big picture. In fact, the big picture may not even help. For example, if all the small efforts you made made a difference of $86 for a year and you took this money and invested it at 5% interest with compound interest, in like 10 years, it’s still only worth about $140. You may just find that it is not really worth it to hang onto that $86 dollars for ten years. But if you think of the fact that this $86 dollars for which you spent some effort to search out savings or refunds gets you about 30 lattes… that become a tangible value that you see as worthwhile. At least I do.
What is your vice and how do you go out of your way to make it work in your savings goals? As always, your input is encouraged.