The Little Expenses Are Killing Me!


Don't sweat the small stuff - just don't go overboard either. Finding a happy medium in your finances is the key to finding stability and happiness in your life.

Recently I was sitting in front of my computer adding some transactions to YNAB, ticking off various small dollar items like burritos, a bottle of wine (or two), some fancy cheese from a local gourmet store and the other odds and ends that creep into a spending pattern. As I do this, I see YNAB’s budget amount for the various categories (dining, alcohol, groceries, etc.) slowly dwindle down. I usually hit my spending targets but sometimes I go over. I just shrug and move on.

When you add up these little expenses here and there, it starts to feel like a lot of money. It’s particularly not fun if you do this at the end of the month when the benefits of those purchases have long faded into your memory.

I think that’s why I often get an email like this:

I shudder to think of how many thousands of dollars I’ve lost because I’ve been more focused on convenience/surviving my first 2 years in big law.

or this:

I’m guilty of lots of daily NYC frivolous debit swiping … like Starbucks in the AM, Chopt for lunch, weekend cab rides and $40 fitness classes a little too much.

What follow is is not a lengthy discussion about what can be done to reduce spending and how to achieve redemption for the years of wasted money …

I always respond: RELAX!!

You’re probably doing a lot better than you think.

Stop being so hard on yourself.

And yet, I totally get it. If you graduated with $200K in student loans and live in a high cost of living city with a stressful job, you want things to get better immediately.

That means that every “unnecessary” expense can feel like a punch to the stomach.

But is saving 100% of your income a recipe for success either? Or will it lead to burnout, unemployment and an unsustainable pattern of trying not to spend any money in a city that requires a lot of money just to get by?

If this is you, your number 1 priority IS surviving your first couple of years in your job (whether it’s Biglaw, government or a solo practitioner). This is the time when you want to build the systems that will carry you over the next decade. It’s not the time to agonize over a $40 fitness class (which is probably an excellent use of money). Sure, you could run outdoors in sub-freezing weather for free but let’s not kid ourselves here. How long would that last?

The big questions you should be asking yourself are: (1) Am I maxing out my 401(k)?, (2) Do I have a Backdoor Roth IRA and a Health Savings Account?, (3) Did I set up my paycheck so the amount I need each month is deposited into my checking account while the excess “available balance” is automatically sent to my brokerage account?

In other words, am I hitting my target savings goals in a sustainable way?

If you’re not meeting these goals, then you have an immediate to-do list of doing whatever it takes to get those systems set up.

From there you can focus on big ticket spending items (like houses, cars, vacations, etc.). I think literally the last thing you need to optimize is your $5 coffee habit.

But if you’re looking for a few ways to save money on all the little expenses that creep up, try this:

  1. Plan Ahead. We spend money on convenience because when it comes time to make a decision, convenience is the most important factor. Convenience is never the most important factor if you’re planning ahead. I have a dorm fridge in my office. Do I fill it with homemade lunches? No! I fill it with Dig Inn (ordered in bulk), hot sauce and cheap supplies ordered straight to my office from Jet. This works for me because it’s a happy medium between bringing my own lunch to work (something I’ve never been able to do) and spending $15 each day on food.
  2. Give It Up Once. If you’re trying to break a spending habit, sometimes all it takes is stopping it once to realize it wasn’t making you as happy as you thought. For example – are you always taking Uber to the airport? Try planning ahead and taking public transportation once. Did it feel better saving that money than taking the Uber? If it did, try it again. If it didn’t, try something else! If you give something up and enjoy saving the money more, you’re evaluating the happiness of the two choices and making a decision based on that.
  3. Spend Money on Exercising. How can spending money on exercising result in saving more money in the long run? Well, despite the obvious fact that your health is your greatest asset, would you agree that a lot of your little expenses are simply stress related spending? If you’re billing 220 hours this month, there’s a good chance that you’re going to need various comforting items to get you through a strong month (I find that 220-250 is the worst – any more and spending drops because you literally are doing nothing other than working in the office). By excising and reducing stress, you’re a lot more likely to have the willpower to skip other expenses. I consider any time or money spent exercising a good investment.
  4. Find the Discounts. How much is your mobile phone bill? How fast is your internet? How many services have you subscribed to? All of these can be audited and changed but take some advance work and planning. One example is when I realized Time Warner was charging me $8/mo to rent their crappy cable modem but I could buy a good one on Amazon for about $90. I did that several years ago. My internet service is now more reliable and I’m not paying the $8/mo charge! Or there was that time I realized I could get by paying $7/mo for my iPhone plan.

To recap, focus on your savings goals first and go easy on judging yourself on the little expenses. I get that most lawyers start their careers with a pretty severe case of financial insecurity but you aren’t doing yourself any favors if you burn out immediately. Get the systems in place and start to tackle things like tax and debt management and big ticket spending before you focus on the little items.

Let’s talk about it. What advice would you give a lawyer three years out of law school that’s worried about all the little expenses?

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