The latte factor: How small daily expenses add up over time

Explore how everyday indulgences like coffee, eating out, or small purchases can impact long-term financial health.

It’s very easy to live-in-the-moment and indulge your ‘wants’ over your ‘needs’ as if to compensate for the stress and toil of modern-day living. And before you know it, that little frothy pick-me-up latte on your way to work or that guilty e-commerce binge, has added up to a substantial sum by the end of the month.

Identifying unnecessary expenses

Whether you have a super tight budget to balance through the year or have factored in a generous allowance to tide you through a rough time at work, often it’s these seemingly insignificant daily indulgences that waylay your finances. Sure, that weekly night out is great and that pizza takeaway is nice, but at what cost?

The digital ease of paying for indulgences with a tap of your card or a click on your favourite shopping sites, makes it tough to keep track of your purchase history. But if you want to keep a check on impulsive buys and unnecessary expenses, you need to start by reviewing your spending patterns to understand where your money is going, every single day. Here are some ways to do this:

  • Budgeting apps: Mobile apps that connect with your financial account enable you to track and categorise expenses on a daily basis. Choose one that you like and keep a close tab on where your Dirhams are going.
  • Allocate a ‘Live for the moment’ budget: Because we are human after all! Put a specific amount into this budget after studying your regular monthly expenses for a few months. This ensures that things like an expected supermarket dash, tips to service providers or that fast-food craving in the middle of the week are all catered for.
  • Plan in advance: Research showcases that food delivery apps and takeaways are the biggest culprits when it comes to upending people’s carefully set out monthly budgets. This might seem simple, but the basic task of pre planning your weekly meals, so you know exactly what you’re having for dinner on a Wednesday, can avoid that sudden splurge mid-week when you might be tempted to order in.

Treat yourself when you reach your goals

Unless you are aware of exactly where that AED 5 is going each morning you will have no clue where AED 5,000 has gone by the end of the year. By saving yourself from spending on frivolous stuff, you can actually end up with more money to spend on something valuable for yourself. It could be that designer bag you thought was out of your budget or a new class you want to enroll in to upskill yourself.

The treat could be a bigger ‘Live for the moment’ budget for the next month enabling you to indulge in what is truly priceless – yourself.

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