1. Home
2. News
3. How Does Coffee Affect Your Credit?

How Does Coffee Affect Your Credit?

Apr 15, 2009

Let's say you stop and pick up a coffee, on average, four times per week. If that coffee costs $1.50, you'll spend more than $300 in one year. And if you like those creamy, frothy coffee treats, you could be spending upwards of $725 per year. These little purchases – a coffee here, a movie ticket there, a new magazine subscription because, hey, you deserve it – add up and wreak havoc on your checkbook- and possibly your credit.

An expenditure review will help you get a control on your expenses. Go through your checkbook – using a program like Quicken, QuickBooks or even a simple Excel spreadsheet – and track where your money went. You may be surprised to see where your money goes.

Cut Simple, Recurring Costs

Once you understand your spending habits, develop a plan to cut expenses. By making a few small changes, you will save money that you can then use to pay off high-priced debt or save in an emergency fund.

• Have a land line? If everyone in your household has a cell phone, consider cutting your land line expense.
• Cable company raised your rates? If so, call and try to get your old rate restored. Increased competition in the communications industry makes this request common.
• Need to renew a magazine or newspaper subscription? If you don't read every issue, don't renew. Also see if you can read the publication online for free, which is a more fiscally- responsible alternative.
• Only drink bottled water? Not only is it bad for the environment, but it can hurt your bank balance. Instead of bottles, invest in an inexpensive water purifier.
• Shop brand-names only? Buying generic or store-brand items can save you money. Often these items are made by the same manufacturers as the brand-name products, but are packaged to sell for less.

Make Your Own Bargains

Another easy way to save is to negotiate. Some places – especially if you shop locally– will meet you in the middle for high-dollar purchases. And you might also get a discount for paying cash.

If you are strapped for cash and won't be able to pay a creditor on time, call them. Tell them exactly when you will make the payment and they may cut you a little slack. This could help you avoid penalties and late fees, which quickly add up.

Be In the Know

Once you know what you spend your money on and figure out where you can cut out unnecessary expenses, follow these simple tips to stay financially savvy:

• Check your bank balance regularly. Most banks offer free online banking and you should log in at least once a week to check your balance.
• Stay up-to-date with your credit score. Each of the three major credit reporting agencies - Experian, Transunion and Equifax - will give you a free credit report each year. If you have a credit card with a balance, set up a plan to pay it off as quickly as possible. If you don't have one, get one - but be sure to pay off the balance monthly.
• Use free financial tools and resources online. Websites like www.360financialliteracy.org, www.feedthepig.org, www.financialfitnessohio.com and www.reacpa.com have financial tools and calculators that can help you get and stay on track.

In trying economic times, it's more important than ever to make a budget and stick to it. Making little changes in your spending habits can truly have an impact for years to come.

This article was originally published in The Rea Report, Winter / Spring 2009 issue.

Note: This content is accurate as of the published date above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

Back to news listing