The following is an excerpt from management professor Scott Behson's new book "The Working Dad’s Survival Guide: How to Succeed at Work and at Home."
A few months ago, a financial planner gave a guest lecture to students at my university about the importance of smart financial management right out of college. He talked about his own spending habits when he got his first job. As he drove to work for his first day, he stopped along the way for a Starbucks — after all, he had money now, and he deserved a treat. Later that day, his new colleagues took him out to lunch at a local café. What started as one-off decisions quickly became habits.
Eventually, on his way to work, his brain went on auto-pilot and so he stopped at Starbucks each morning. He never got into the habit of packing a lunch, so most days he went back to the café with a few coworkers, or even by himself. A few months later, it dawned on him that his paycheck didn’t go as far as he’d thought — because he was spending $15 a day due to his unconscious spending habits (quick math: $15/day x 5 days/week x 50 weeks/year = $3,750). This was more than two months’ rent!
I’m not saying you should never treat yourself, and I recognize the incredible awesomeness and indispensability of large amounts of morning caffeine. However, making his own coffee and lunch at home four days a week and splashing out for Friday Starbucks would have saved him over $3000 a year. That’s enough for a weekend getaway, a gym membership or a host of other purchases that are enjoyable and/or create time for family (more on spending money on family time instead of “stuff” in Chapter 10).
Alternately, he could invest or save that money, and then use the accumulated interest to start his own financial consultancy. In fact, this is what he did. This book is not just about family time, after all. The range of our career choices can be enabled or constrained by everyday financial decisions.
I bet a lot of us, myself definitely included, spend little bits of money unwisely. Like a small drip in a pipe, over time, little things can add up to big problems. I never started smoking, but I often say I was too cheap to start. A half-pack a day at $10 a pack (about what it costs in New York State) equals $1,825 over the course of a year. Plus it makes you smell bad and hurts your health. No, thank you.
I know I spend too much on my cable bill and cellphone plans. There are lots of places to economize. Here are some tips from fellow working dads:
Order water
Back when I was a poor grad student, one way I saved money was to never order anything but water to drink when at a restaurant- whether it was McDonalds or Chili’s (which was the upper end of what I could afford then). Three dollar Cokes and five dollar beers add up.
Use your state’s prepaid college tuition program
I have always been — and will always be, I fear — an idiot when it comes to economizing and saving money. But one really smart thing we’ve done as a couple, my wife and I, was to set up my state’s prepaid college tuition program for both our kids- a little bit from every paycheck goes into it, before I have the chance to waste the money, like an idiot.
Look out for family deals
We are constantly on the lookout for good family deals — things like “kids eat free” or free drink refills. Groupon has become a friend, as we often organize entertainment around the very good deals you can find on Groupon.
See the rest of the story at Business Insider