If you watch the pennies the pounds take care of themselves

Many years ago I was working for a really good manager and one day we were talking about money and personal finance. Chris taught me one very simple rule - “If you watch the pennies the pounds take care of themselves.” I’ll translate for the current currency - “If you watch your cents the dollars take care of themselves.”

When I first heard about this saying many years ago when I worked in a corporate office, it was pretty self-explanatory.  Applied to one’s personal life, basically it means that if you pay attention to the smaller financial issues in your life, then the larger ones will take care of themselves.

What I also take it to mean is that managing your money is more of a mindset and a frame of mind than anything else.  If you watch how you spend your money during your weekly trip to the grocery store, then the big things in life (lowering your mortgage payment, buying a new car, etc) should be no-brainers.  You simply adopt the same attitude to the former as you do the latter.

It also reminds me of one of the ways that I used to look at money and how it came in and went out of my life.  Back then, I would utter the phrase, “It’s only money” all the time.  You know, spend $10 a week on lottery tickets and rarely win?  So what? It’s only money.  Have an area of your life where you could save significantly but are too lazy/busy/whatever to actually implement the change?  No worries-it’s only money.

I had a client whose only goal was to go on a decent holiday. I asked to see this client’s budget and a list of everything they spend their money on, no matter how small the item. This client’s budget was tight, there was not a lot of disposable income. I found one thing that was not on the client’s budget and was not budgeted for.  The client was a smoker and so was their partner. At that time, a pack of cigarettes was around $30 a pack and they were smoking two packs a day, $60 a day, $420 a week, $1,680 a month, $21,840 a year in cigarettes. When the client saw how much they were spending on smokes every year they were speechless. I suggested to the clients, “Cut your smoking in half and enjoy your holiday”

My own personal, “If you watch the pennies the pounds take care of themselves” was coffee. I really needed that first long black in the morning to get the pistons firing. I was spending anywhere from $3.50 to $7.00, depending on the number of cups I would have per day, $2,555.00 a year on coffee. Now I was not going to give up coffee, that would be ludicrous! To save some money I bought an inexpensive expresso coffee machine, a coffee grinder and some beans for around $170.00 and now I just have to buy a bag of coffee beans every few months and I am saving around $2,400.00 a year in coffee and the coffee I make is so much better that what I could ever get in a cafe.

“If you watch the pennies the pounds take care of themselves,” I am sure there are small items in your household budget you can do away with or adjust to help you save money.

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