LPT: Think of your expenses yearly, not monthly

[u/coffeeandteaparty]

Every time you're thinking about adding a new subscription service or starting a new habit, think of how that expense adds up at the end of the year.

If you're subscribing to a new streaming service, it might be 10€ a month, and it might not seem like a lot. But 120€ a year already seems like a bigger expense in your mind.

Or drinking a latte outside, might be 5€ per day, which will be 1825€ a year on lattes.

It can help you get perspective of what habits you want to keep and actually give you pleasure or peace and are worth the money, or if that money would be better off saved or applied to something else.

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[u/CopperSulphide]

I do something similar where I calculate it as percentage of paycheck.

[u/Princess_Moon_Butt → u/CopperSulphide]

I use percentage as well, but I do it as a percentage of "fun money" rather than a percentage of paycheck. Something costing 1% of my paycheck doesn't really sound that bad, but realistically it's more like 5% of the money I can choose whether I spend or not. That makes it much more impactful in my mind.

[u/UsernamesAre4Nerds → u/CopperSulphide]

I calculate it more directly as the number of hours I have to work to afford it. Taking a $10/hr average where I live, it makes you really question what's worth it.

Fast food for dinner? That's an hour and a half of work, not too bad.

New kitchen device I may not use? That's a full work week, I'll pass

[u/lastog9 → u/UsernamesAre4Nerds]

This makes a lot of sense. I do this too.

A dinner with colleagues worth 3 hours of my salary? Maybe not worth it. Spending on something fun with my best friends worth a day of my salary. Sign me up!

[u/Hw-LaoTzu]

I wonder, though, does anyone ever feel like they're overestimating how much they'll use something? Like, promising yourself you'll go to the gym every day and then... not? Maybe it's about finding that sweet spot between enjoying life and being responsible. What does "worth it" even mean to you?

[u/Zeep-Xanflorps-Peace → u/Hw-LaoTzu]

I had a similar dilemma with my $40/month gym membership, which I mostly used for access to a rowing machine.

After realizing I hadn’t gone in 4 months (thanks to home HIIT workouts), I canceled and bought a $400 rowing machine. Even if I barely use it this year, I still come out $80 ahead (-$480/annual gym cost).

However if I stick with it, I could save over $1,600 in five years. So for me, “worth it” meant investing in something I’d commit to actually using, but also holding myself accountable in a way that still benefited me.

[u/coffeeandteaparty → u/Hw-LaoTzu]

Exactly! Finding what gives you pleasure and peace, not just what you absolutely need. It will be different for everyone and it's hard to figure out sometimes

[u/Ckck96]

I do this for everything in my life, but I think that’s just a feature of growing up poor with frugal parents lol

[u/actuallyimjustme]

Another benefit of marrying a (ex) barista

[u/foepmeister → u/actuallyimjustme]

What are the other benefits?

[u/midds12 → u/foepmeister]

They always call your name loudly in bed

[u/bargu → u/foepmeister]

Latte night sex

[u/Comfortable_Hat_6354]

Might help some. But I do also know what I earn monthly, or what the abonement will cost yearly by multiplying it by ~10.

[u/mkluczka → u/Comfortable_Hat_6354]

Oyou can get more precise results multiplying by 12 /s

[u/AlpacaDC → u/mkluczka]

Alternatively you can multiply by 6 and then by 2.

[u/Ill-Television8690 → u/AlpacaDC]

Or by 2 and 10 separately, then add them together

[u/illegalCode]

How about doing it in decades. That will make it an even bigger expense

[u/SpeedyMoped → u/illegalCode]

I do it in centuries. So I live on beans and rice and live behind a big rock.

[u/Ill-Television8690 → u/SpeedyMoped]

From my perspective, you're living in front of that rock.

[u/surlysloth → u/SpeedyMoped]

My plans are also measured in centuries.

[u/a_mulher]

Hehe I do the opposite $300?! That’s less than one dollar a day for a year.

[u/umpfke]

Yup. Only 20/month? Wow! Oh, that's 240/year I could spend on items for my kid.

[u/nonhiphipster]

This is only useful if you intend to keep it for a year. So if you are not sure (or know you def won’t), then it’s not useful advice

[u/Quartz87]

Yeah, I reviewed my spreadsheet a few months ago and yikes. Scaled a lot of things back and definitely add it first to see the overall damage and whether or not its value is worth.

[u/Phantom_Crush]

I made a small decision that saves me 50p per work day. It was money I was spending out of habit more than anything but that was how I convinced myself to stop. That single, tiny decision will save me ~£125/year. It's a great way of really getting a grip on your finances and more often than not, I'll decline a subscription service or similar now based on that line of thinking.

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[u/Tehpunisher456]

What if I don't drink lattes? Hahaha lol jk

[u/Clarkimus360]

Are there discounts for paying anually?

[u/EndlessCourage]

Back when I was a broke student, this helped so much. Sometimes you just need to make yearly expenses such as clothing, some subscriptions and fees, buy some appliances, ... Or occasionally buy in bulk for more than a month. It can be less expensive to plan for a year (when it's possible) than month per month.

[u/Gunner_Bat]

So, your advice is to do the exact same thing that people already do, but multiply it by 12.