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September marks a time when many Canadians return to more regular routines, and along with this comes a timely reminder to review or establish a budget before the fall and winter holiday shopping seasons begin. A mid-year checkpoint is the perfect time to measure your progress against financial goals, identify gaps in your plan and make adjustments, if necessary. But if you discover that despite your best efforts your budget remains unbalanced, micro expenses may be contributing to the discrepancy.

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When I review a client’s spending habits with them, a quick look at their recent credit card or debit transactions typically reveals that ongoing small expenses rather than a single large purchase are what undermined their budget. Collectively, micro expenses such as multiple subscriptions for similar streaming services, delivery fees for small take-out orders, memberships you no longer use or convenience store purchases add up to hundreds, if not thousands, of dollars a year.

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Taking the time to look over your bank account and credit card statements is useful for identifying both spending habits and minor expenses. To gain a more thorough understanding of where your money goes, track your spending for a few weeks using a notebook, app or spreadsheet. This can give you valuable insights for balancing your budget.

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How to reduce micro expenses

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However, reducing micro expenses is not as simple as spending less. It requires a mental shift and lifestyle changes. Consider a daily $5 drink habit, which might seem like a harmless joy to kickstart your morning. But over a year (five days a week for 50 weeks), a daily habit that costs $5 comes to $1,250.

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Budgeting should not be about guilting yourself into never buying a $5 drink or only crunching numbers to cut costs. It is about pausing to decide if this daily expense leads to $1,250 worth of happiness, or if that money could be used for something more meaningful.

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Instead of deprivation, think redirection. That $1,250 could become a weekend getaway that creates lasting memories. Using the money to pay down a credit card could be a big step toward financial freedom or it could fund a high-quality coffee maker to enjoy better brews at home for much less cost per cup.

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The ‘just this once’ trap

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Identifying micro expenses can be challenging, so one way to discover them is to think about expenses you justify as “just this once.” For instance, while you may budget for picking up coffee each morning, fancy add-ons such as flavoured syrups, a shot of espresso or a whipped cream topping could bump the price up by several dollars.

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Buying an afternoon snack or coffee break item from the vending machine at an inflated price because a craving hit, instead of incorporating these items into your grocery shopping or preparing them yourself, can add up significantly over time.