Lots of financial gurus will tell you to focus more on the big financial decisions in your life, like your house, your car and your job, and to focus less on the small, day-to-day decisions like buying a cup of coffee and what you eat for lunch.
I tend to disagree.
Not because you shouldn’t care about the big decisions. It’s true that whether you buy a $10,000 car vs a $100,000 car, or a $300,000 house vs a million dollar house, is going to have a bigger impact on your financial future than whether you bought coffee today or brewed it at home.
And I do advise clients to think hard about whether the more expensive option is actually going to bring them joy, or is just going to leave them feeling frustrated by how much more difficult reaching their other financial goals is going to become.
But it’s also true that, for most people, everyday decisions matter. If you spend $10 on coffee and breakfast every weekday morning, that’s $200 a month. If you buy a $20 lunch, that’s $400. Get Uber Eats for $50 three nights a week, that’s $600.
And if buying coffee on your way to work is the best part of your morning, that might be money well spent. If you hate cooking dinner and never have time, maybe you can’t avoid that Uber Eats bill.
But it’s important to be aware that everyday expenses add up fast and can quickly become a significant part of your budget. I remember years ago I used to get Wendy’s chicken wraps all the time. $4 here and $8 there never felt like anything.
That’s why daily expenses can be so sneaky. They never feel like much.
But when I started to add it all up and think about whether that money could’ve been better spent elsewhere, I changed my habits.
So sure, you should be thoughtful about getting the big decisions right. Put effort into increasing your income. Maybe don’t buy a boat or a huge house or a fancy car just to impress people.
But if you’re not earning a super high income, it’s important to be thoughtful about your daily spending patterns. They’re often far easier to change than where you live or work, and over time, they can make a big difference to your financial future.