Do you ever feel like saving money is a waste of time? Like, no matter what you do, at the end of the day, it doesn’t make a difference to your bottom line.
I’ve certainly felt that way.
However, a few days ago, I was listening to a podcast featuring business and finance expert Ramit Sethi. If you’re familiar with him, you know that he’s a big proponent of focusing less on saving money and more on making it.
And you know what? For the most part, I completely agree!
The problem with saving is, if you make say, $50,000 a year, you’re only ever going to have $50,000 a year that you can save. So if you want to save more, you have to make more.
However, the problem with Mr. Sethi’s idea that quitting Starbucks is flawed. In this podcast, he talked about how people quit buying Starbucks everyday, they think they’re going to save money, but they don’t. They just end up spending it on something else.
And this is where I disagree.
If you have a daily Starbucks habit, let’s say it costs you $3 a day. That’s about $90 a month.
Not a lot, but it’s something, and it adds up to just under $1,100 in a year that could have gone into an investment portfolio to collect compounded interest over the next 20 years.
For someone who makes $50,000 a year, that’s pretty big chunk.
You see, the reality for many of us is that making more money would be great, but maybe you have another priority.
For me, that priority is limiting my work hours so I can be a stay-at-home, homeschooling mom, which limits my time for side hustling.
And yet, since I still want to build up a generous retirement fund, I’ll take that daily $3 any way I can get it.
The problem isn’t that stopping your Starbucks habit doesn’t work.
The problem is that people quick Starbucks, but don’t budget that money into another category to make sure they don’t lose it.
If we fail to properly budget the money we’ve saved, there’s no point in knowing the ten best ways to save money right now.
Maybe you don’t have a Starbucks habit to quit. Maybe you’re working on eating out less, or something as simple as washing your car at home instead of going through a car wash.
Maybe it’s entertainment services that need to be cut, or any number of other elective expenses.
But guys, whatever that expense is that you’re trying to cut, make sure you put the money somewhere where it will benefit you – not get lost.
Saving money is only a waste of time when you don’t intentionally use that saved money somewhere else.