Think Annual Expenses When Creating Budget
I’m currently reading Stay Mad for Life, the latest offering from CNBC and TheStreet.com money manager, Jim Cramer. By the way, I personally think this is Cramer’s best work as it focuses on all areas of personal finance, not just stock picking. In the early chapters, Cramer discusses a unique way of budgeting that carries monthly expenses out to yearly outlays. It got me to thinking. My wife and I are big soft drink drinkers. Besides them not being healthy, I wondered in what other ways these things were affecting our lives.
In a given week we probably go through 2 twelve-packs of Coca Cola (or Diet Coke, depending on how good we are being, or not being). Our local grocery store generally offers a 3/$10 deal making these close to $3.50 each with sales tax. That comes out to $7.00 a week on soft drinks. Convert that to a 52-week, annualized expense and it comes out to about $360 a year, nearly a dollar a day!
Over the next couple days my wife and I plan to take a look at our budget and annualize all our expenses to determine what’s costing us the most over the course of a year (can you imagine what the cable bill looks like…yikes!).
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