Watch your pennies. It’s not terribly difficult to do, and the pennies, the little things, are usually what add up to big savings over time.
I was speaking with a client recently who was introduced to the concept of tracking his daily expenditures. This task of “watching the pennies,” really had him questioning things. “What’s the big deal?” he asked us. “How could this help me save money?”
Think about it though: $21 a day works out to $7,665 a year. How often, without much thought at all, do we pull out a $10 bill here, a $5 bill there, then spend loose change on gum or a lottery ticket? (Or whatever it is that you spend your loose change on.)
Before you know it, even on a relatively frugal day, you’ve spend at least $20, if not much, much more. All of it can add up to thousands of dollars each year, but somehow we think it’s beneath us to keep track of it all.
The fact of the matter, though, is that even rich people watch their pennies.
According to documentarians, industrialist Andrew Carnegie, who died August 11, 1919, was the richest man in the world during his time. Carnegie said it was his mother who taught him to “look after the pennies and the pounds will look after themselves.” It’s a phrase that’s been modified and adapted over time to become the “watch your pennies and the dollars will watch themselves” idiom we use today.
Later on Carnegie modified this phrase for use in his steel plants. Where his competition would eye profits, he watched the costs, and developed a system to track them day-by-day.
His formal motto or dictum, was to “watch the costs, and (let) the profits take care of themselves.”
Still, when you get down to the actual task of tracking your own small spending, the effort at first glance seems downright tedious. A lot of my clients have graduated to positions where they lead, and focus on larger, big picture developments and objectives. Your own budgeting efforts, however, are not something you can delegate to a team member.
The only person who can keep track of every $5 latte you buy, is you. This is not to say you can’t drink lattes, but you do need to be mindful of the fact that $10 a day for coffee, not to mention impulse purchased clothes, electronics, and unnecessary food snacks all add up to a considerable amount of money over the course of a year.
Pay attention to these costs with even a fraction of the same zeal as this late Scottish-American industrial leader, and you will undoubtedly soon see the wisdom of his approach, and the savings (profit!) that it could generate in your own life.
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