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.