I can’t find the quote, but I recall a quote of a tourist asking a Buddhist monk “How do you get to Mount Fuji?” and the monk replied “Take each of your steps in that direction.”

So how do you save money when you use all your take home pay every month? Let’s look at a few of the conveniences we take for granted and how much they cost. Perhaps some of these can be exchanged for others.

I’ll pick on Starbucks coffeehouse. If you go to a Starbucks every day for a cup (or more) of coffee in the morning, you are spending at least $15 a week. If you are like many, you toss $1 bill and the change into the tip jar to get better service and a smile. Not to mention feel good. That’s another $6-8 a week. Thus you are spending about $1,100 a year on one cup a coffee a day.

Staying with the coffee trend, K-cups. They cost $1 each. I brew really good coffee for my wife and myself at $0.75 for four cups. Or less than 20% the cost of using K-cups. Not saving 20%, saving 80% of the cost of K-cup. At $3.25 a day 7 days a week, that saves almost $1,400 a year over using K-cups.

Let me move on before I wrap this up, please bear with me, I’m not saying don’t enjoy your indulgences, rather let’s pick them and decide which are important to us.

The other area, and we all hit this from time-to-time, is paying our bills late. If you pay your credit card bill late, they will hit you with a late fee of between $25 and $35. Do that every month, and it’s $300-$420 a year. Same thing with cable, phone, electric, etc. Those annoying charges can really add up. It’s a law now that your bills have to be due on the same day of the month every month. Get a generic calendar month and write on it when your bills are due, it will really help you, I know it has helped me.

Mobile phone cost. Features, bandwidth, cost of your phone, etc. All of those get rolled into your plan. If you can keep your phone for more than 2 years, don’t buy it as part of the plan, you pay it off after 24 months and then keep paying for it afterwards. It’s like borrowing money for a car, and pay the car off but they keep charging you. Also, call your carrier and tell them you want a better deal. A few months ago I did and got $15 a month taken off my second phone’s monthly charge. Just like that. That’s $180 a year.

Now the biggest monkey in the room. Charge cards. You’ve got to pay them off. Those interest rates are outrageous. Not only do you pay interest on the balance, but you pay interest on all your charges the moment they hit the card, if you carry a balance over. That means every $10 you charge, costs you $12. So you seek those sales that save you 30%, charge it, you’ve saved less than 10%.

So how to do that? This is hard, really hard. First you can’t pay the minimum or you’ll pay it off in 17 years. That’s how the minimum is calculated. Plus you probably charge more each month than the minimum payment. That just keeps letting the balance grow ever larger and ever harder to pay off. If you are really dedicated to paying it off, go to your bank and see if you can get a personal loan to pay it off. If not, go to your credit union (if you have one) and get a card from them, transfer the balance and figure out what it takes to pay it off. Credit union cards typically are 1/2 the interest rate of commercial cards. Then close the account and destroy the old card.

OK, so that’s a few ideas, now what do you do? We want to enjoy our lives, that’s why we buy Starbucks coffee, K-cups, lavish phone plans and charge so much onto our cards. But really, what is most important to you? If Starbucks is worth it, then say that’s an expense I’m not willing to give up. That’s got to be budgeted. Put it in as a line item in your budget spreadsheet. Make it obvious.

Do that with everything you spend money on. You may be surprised that you simply do some things out of habit. Change the habit and reduce the cost.

Lastly, take the savings and put it into two accounts, half-and-half. One long-term savings, the other fun-savings. When the fun savings is big enough, do something you’ve always wanted to do but never thought you’d have enough money for. THAT is your gratification reward. The long-term savings will be your reward when you are older and not working and can still enjoy the things you do today.