Figuring out the fritter factor

It’s so easy to fritter money away, isn’t it? A latte here, a happy-hour drink
or two there, lunch out with friends or colleagues, new clothes. Before you
know it, it’s the end of the month and you don’t have any money left. Where
did it all go? Most likely, you unconsciously frittered it away on unnecessary,
miscellaneous items. Each purchase may not have cost much, but together
over a month’s time, frittering adds up to a significant amount. How much?

Let’s assume that every workday you spend $3 on a latte. In a month, you
spend $60, and in a year that small daily purchase adds up to $720! If you also
spend $2.50 per day for a bagel or pastry to go with the latte, you’re spending
$110 each month and more than $1,300 per year! Scary, huh?

If you’re like the vast majority of people, you get paid money much less often
than you spend it. You probably get paid every week, every two weeks, or
every month — but you spend money every day, don’t you? This leads to a
distortion in how you think about money and makes frittering all too easy.

To help you get a handle on how much you fritter away, for one month we want
you to write down everything you purchase with cash, a debit card, or a credit
card. Your spouse or partner should do the same. Carry a small notebook with
you whenever you leave the house so you can record every expenditure right
away instead of trying to remember it later. When the month is up, add up
everything you spent on nonessential items. We bet you’ll be shocked to see
how much it amounts to. Multiply this number by 12, and put that number in
your worksheet under “Other” in the “Variable Spending” section.