Step 3: After you have evaluated your big ticket items, examine the rest of your budget for smaller savings. We can call these “money leaks”. Look at every category and expense as an opportunity to save money and see what expenses you can reduce or cut down. It may surprise you how certain expenses add up. For example:
1 vending machine snack per day at .75 cents per snack will cost you $21 a month or $252 a year.
Thirty cigarettes a day (1 1/2 packs) (the amount an average smoker smokes) at $6.75 a pack will cost you $10.13 per day; $301 per month; and $3,612 per year.
Two lattes a day at $3 a latte will cost you $6 per day, $180 per month; and $2,160 per year.
After you have gone through steps 1-3, you can see how much extra money you have to work with. You can put that extra money toward paying off debt and/or savings.