Short On Cash This Holiday Season?
It happens to many of us this time of year – the Christmas crunch. There seem to be so many gifts to buy in addition to struggling to get all of our bills paid on time. What is the cause? For many of us it isn’t one big thing; it is a series of small, daily purchases that add up to more than we realize. Those small purchases can quickly add up to a lot of credit card debt and a shortage of cash just when we need it most. Some financial experts call this the Latte Effect.
Think about items that you buy daily, or even weekly that can add up to a lot of money over the course of a year. For many Americans such an item is a daily coffee from Starbucks or other coffee shop. The average price for a cup of joe (though such mundane names for coffee are certainly not used anymore) is about $3.50. Usually these drinks are not simply coffee; they are lattes, cappuccinos or a frozen coffee beverage. If you spend the median price on a cup of coffee everyday for a year, you will spend approximately $1,275.
Now, imagine you find an alternative to your daily purchase. You invest in a coffee maker for your home, and pay $100 add to that the price of a pound of coffee (about $10 depending on the quality and the brand) every two weeks for a year. You would pay $310 total for both the coffee and the coffee maker for the year. Your potential savings: $965.
Most of you already know this, but think of it in a different way. These small items that add up throughout the year have a major impact on your cash-flow by the time the holiday season rolls around. That one adjustment to your budget, if saved, would leave you with about $1000 at the end of the year. You could use that money to buy holiday gifts, decorate your home or finance your holiday travels.
Author Bio: Allison Roberts is a graduate of the University of North Texas Department of Journalism. She has experience in agency and in freelance public relations. Allison currently writes for Credit Solutions and she is completing an unfinished work of her late grandfather. For more articles by Allison on bankruptcy visit Credit Solutions.
