What is a discretionary expense? A discretionary expense is any expense that is not necessary, not required. Think about anything that is fun to spend money on, coffee at your favorite coffee shop, dinner out with your friends, new clothes, or that new stereo system for your car. These are all discretionary – of course they are.
And of course, they are the first expenses to consider cutting back or cutting completely out when you are trying to find good ways to save money. Why? Because you can actually live without them. Yeah, you can. What can you not live without? A roof over your head, food, basically anything on that lowest level of Maslow’s Hierarchy.
Let’s think about coffee. If you swing by a coffee shop every morning before work you’re spending $3.95 daily, without tip. (This is an approximate amount given that the other day I paid $3.95 for a 16 ounce coconut milk latte – cut back, not necessarily cut out.)
$3.95 daily. Nothing to blink an eye at.
$19.75. That’s the weekly amount. Still not a ton. That’s less than a dinner with your significant other or two movie tickets.
$85.58 monthly. ($19.75*12 months/52 weeks to account for those pesky half weeks.) Less than a concert or a really good night on the town with friends, but more than your internet bill.
$1,027 annually. That’s like a weeks worth of an Aruba vacation for two. OK, I know we can’t always travel like that, but that is still a pretty awesome weekend getaway in the normal world.
Stop by a coffee shop every weekday for five years? $5,135. That’s more than Dave and my vacation to Europe. By almost half. Just on coffee.
Or think about it this way. Take that annual $1,027 and divide it by your hourly wage. That’s how many hours you need to work to support your coffee habit. Say you make $20 an hour (it makes the math easy). You need to work more than 50 hours a year to pay for your morning coffee. Over a week of working. Again, just on coffee.
So, How to Cut Back on Everything Fun in Life
Sticking with coffee for a second, especially since Dave and I are super coffee snobs, coffee shops are the perfect starting point. Don’t worry, homemade coffee has come a long way from its humble Folgers and Percolator beginnings.
You can buy packages of coffee from Dunkin Donuts, Starbucks, Seattle’s Best, and on and on. They’ll cost about two or three of your normal lattes, but last so much longer. Better yet, Dave and I buy the Kirkland House Blend from Costco. Two pounds for around $10. And the beans are roasted by Starbucks (seriously, just check the image to the right).
Get yourself a French Press and a grinder, and you’ll have amazing coffee and save the majority of your daily $3.95. Don’t have time for that? Get a percolator with a timer. You’ll wake up to the smell of freshly brewed coffee. A good insulated mug will give you a reusable, environmentally friendly caffeinated beverage that will stay warm much longer than anything you can get in the paper “mostly made from recycled material” cup you get handed by your barista.
OK, getting off my coffee soap box. Say you just can’t give up your daily latte, or you agree to cut back to a cup or two a week. Where else can we find you some extra money to pad that savings account.
Does anyone still pay for cable? Do you think they know about Netflix, Hulu, insert-any-streaming-network-here? Cable is a vast waste of money, and a huge time-suck. How many of those channels do you actually want? Seriously, cut the cable cord.
Netflix, in particular. I love Netflix because they don’t seem to mind if multiple people use the same subscription – up to a certain number so I have heard. I know people who share the same Netflix account across three separate houses.
Going Out to the Movies
Many metro areas have deals on movie tickets. Here in Boise, we have $5 Tuesdays at the big movie theaters. Yeah we had to download an app for one of them, but we got to see Captain Marvel the week it came out for $10 – and yes, we snuck in candy from the nearby Walmart.
We even have a dollar theater. They do a drink and popcorn for an extra $3. It’ll be an older movie in one of those old theaters, before stadium seating, and the 7pm movies are always the ones made for a younger audience. But for a movie, popcorn, and a drink for $4, I’ll stay out and about for a 9pm showing of an Academy Award nominated flick.
Yep, you guessed it. Happy hours are our favorite. Even if we forego the drinks, a ton a great restaurants have amazing happy hour deals on food. Lunch specials are also a great way to get the eating out experience without the cost. We recently went to a cute little Cuban restaurant and were able to get a sandwich and soup for half of the cost as anything else on the menu. And both Dave and I were fully satisfied without feeling like we were going to explode stomach-first.
Speaking of overeating, sharing a meal is also always an option. I know people tend to think this option is typically for a mother-daughter combo, or two friends, but Dave and I do it all the time. Here in America, portion sizes are so out of control that it is entirely feasible to split a burger and fries and no longer be hungry.
And if a place states that they charge for an extra plate? Just don’t tell them you’re splitting the meal. I’m sure they could catch on and add the charge, but we’ve never had it happen.
Redboxs and Buying Books for a Bit of Light Reading
I know it’s an ancient place that no one thinks about anymore, but there are places call Libraries. You sign up for a card and they let you borrow movies, books, CDs…for free, pending you bring them back on time. We’ve rented literally ten movies at one time before. Three weeks later, we returned them with no late fees. I don’t think I’ve ever been able to return a redbox without paying for an extra day.
Get Saving, But Remember to Treat Yourself Too
So many more options exist for saving money on discretionary items. Ebates, Groupon, Ebates on Groupons. Second hand stores – I haven’t paid more than $10 on a pair of jeans since college. Craigslist or Facebook Marketplace for just about anything. Brown bagging your work lunch. Too far?
Wherever you decide you want to cut back, just remember that it isn’t necessarily forever. There will always be special occasions or times that you should treat yourself to something. But just like with dieting, everything in moderation. Spend a little extra when you really feel like it, and watch your savings account bulk up in the meantime. Your will-I-be-able-to-pay-the-rent stress level will thank you.