Personal Finance Leak

Since I was in college right during the heart of the poker craze it should come to no surprise that I used to gamble.  One of the things you learn while gambling and in this playing poker is how to tighten up your shortcomings.  It could be a number of things including folding quality hands pre-flop, over thinking the other player’s strategy, or making large bets into a stronger hand.  The leaks that I have mentioned above are more specific to playing poker, but one of the bigger leaks that can develop while being in a casino is a true gambler’s leak, I like to call this the “You Can’t Win at Everything” leak or “Stick to What You are Good At” leak.

It is very common in poker to finish up your session and leave the table wanting more.  Whether you win $200 or lose $200, many of us can’t fight the feeling but to move on to a new game.  When I gambled my Gambler’s Leak was Blackjack, I would finish up my session and be required to walk through about 20 blackjack tables, for me many times this was very hard to resist.  It didn’t matter if I had won or loss, I had my eye on getting even or doubling up and winning big.  Some of my stories lead to winning, but more probably are closer to losing my money than doubling it, because remember the house always wins.

A wise man once told me why do you think the casino’s look so nice?  It’s not because everyone is winning at these tables.  In most cases he said look for a really nice building and you will probably find a business that is used to winning.

The reason I bring up the Gambler’s Leak is because many of us including myself have this same Gambler’s Leak in our personal finances.  Most PF bloggers at one point or another preach the use of a budget and I am no different.  If you want to save more money and/or pay off debt you need to know where your money is going.  We were on the right track when we knew where the money was going and then we were looking for solutions on how to save more money, here is a couple examples of what we have used and what I recommend in your financial journey.  We were at a good point in our financial budget, cutting out some of the little guys and having them become big guy savings items in the budget.  We took out 2 of the Big 3 with our Mortgage and Car situation, but one ever present battle with money was beginning, it was our Personal Finance Leak.

Eating Out

While Mrs. Even Steven and I have similar Financial Independence goals, we keep a personal account and a joint account for major expenses.  This happened to be the best way for both us to feel independent and still share our common long term goal.  We have decided that our grocery bill is a joint expense, I put in $200 each month and so does Mrs. ESM, for the two of us, it does not vary a great amount, not enough to make any changes financially.  What we decided at the beginning was to put a small amount of money into this same joint account and have this be used for eating out.  While I know it’s almost a sin in the PF world to go out and enjoy a new restaurant, me and the Mrs. love going out to a new restaurant in our neighborhood or one with great reviews that we are dying to try,  I mean not many can say they had a Hot Doug.  What we soon found out was this was not the answer.

Mrs. ESM before we were married had almost zero costs living with her parents, so it was pretty common to go and get a Cafe con Leche every morning, followed by an Argentinian steak for lunch, since her expenses were so low spending money on a few lunches and some coffee were not breaking the bank.  This was all of course pre-Florida investment property and Chicago as well, now we have some big boy mortgage payments even if we are debt payment free.  We have decided that our investment real estate will be our passive income investment of choice towards our financial independence, so extra payments are applied each month and what that does is make you want to tighten up your budget so you can pay off a house.

Back to what we were doing was wrong.  We put such a small amount of money in the joint account that our eating out budget was easily exposed with a nice sit down dinner.  What happened was Mrs. ESM who loves going out to eat would go back to the days before she met this hansom lad named Even Steven and pay for dinner out of her personal account, as you can see this became our Personal Finance Leak.  We decided to switch things up and not contribute any money towards our joint account, but rather have our personal accounts handle any dinners or eating out.  The good news was we were getting closer, Mrs. ESM the free spender that she is, let me put together a budget for her personal account.  The first couple of months I just wanted her to know what she was really spending on shopping or eating out or gas, just so could decide if this was a little or a lot.  This was our Phase I, we saw that she was spending a lot, and she wanted to save money so she knew something had to change.  Phase II set up a budget for eating out and stick to it!  Bad news Phase II didn’t work, well not at first.  I would set up the preliminary budget on what amount of money we would spend for the month, ask if this worked out for her, talked more one each number, come back at the end of the month and find out we blew our budget by $500.   Phase II needed some fine tuning.

We realized after some careful trial and error, reading every personal finance website on the planet, and listening to Dave Ramsey(he reminds me daily I can’t spend money on my train ride to work), that we needed 3 things to happen to get results and stop our Personal Finance Leak (PFL), feel free to use this as you please, I’m not trade marking it, i’m not going to make T-Shirts, if anything I encourage you to use it, just make sure you give me a shout out, you know something cool on Twitter like “You know your PFL?  WTF, OMG, ESM has been down since Day 0!, then proceed with the remaining characters in exclamation marks.  Lost in my own crazy mind for a second, hard to get out, 3 things that worked for us to stop our PFL:

  1. We set up a preliminary budget and meant it

  2. We took out that exact amount that we set up for our preliminary budget from the Money Spitter aka ATM

  3. We talked about it

3.5  I knew I was going mess this up.  We planned and cooked ahead.  If you forget lunch you have 2 options, go hungry for 10 hours or buy lunch, we took away that option.


Let me elaborate a little more.  Have you ever told yourself you are going to lose weight, exercise every day, and eat right?  Then about a month, week, day later you are eating at the pizza place on your way home from work, thinking well maybe I’ll start tomorrow.  That was us, we needed the Fake “I’m going to really do this and budget for eating out” to have The REAL “I mean it this s*** is going to work because I’m making it work.”

Next up I know everyone loves credit cards for points or miles or cash or because they sell them on their website when people sign up or for whatever reason you think they are the solution to life’s problems, but if you are trying to stop your Personal Finance Leak, credit cards are not the answer, if anything they could be the problem.  Put $200 cash in your hands at the beginning of the month for eating out and paying the lady at Starbucks $5 for a latte gets harder, the money comes out of your hand slower, your thought process becomes more clear on if it’s really worth it to spend $10 on a lunch, you start wanting to keep that money in your purse or wallet, it’s very difficult to replicate these actions with your credit card.

One of the greatest things about having your own website to share your thoughts is you get to talk about your money.  Now if I talked about what we bought and ate for lunch each day I’m pretty sure you would all flock to something more entertaining, I know I would.  Talking about what we had for lunch became a part of the normal conversation at home, I asked what she had or if she spent money, I asked what the plan was for tomorrow.  Funny thing happened if you start talking about it, you pay a lot more attention to it, whatever the discussion is about.

Good old step number 3.5, really came up because of talking about it.  We started making a little extra for our lunches the next day or having that big cooking day on Sunday, we planned ahead.  This morning when I left the house, I knew exactly what I was having for lunch and what Mrs. ESM was having as well because we planned ahead.

Now I know you think that these steps only apply to my personal situation, but we here are trying to stop Personal Finance Leak’s around the world.  These steps are for everyone’s PFL.  Think you are spending to much on shopping, OK let’s see what steps we are going to take:

  1. Set up a preliminary budget and mean it

  2. Take out that exact amount that you have set up for your preliminary budget from the Money Spitter aka ATM

  3. Talk about it(spouse, friends, anonymously in the comments)

3.5  Plan ahead.  Know ahead of time that you are going to a department store and you plan to spend $50 on jeans or even better yet plan not to go.  Here’s another idea, try this, take away an option.  Take the cash you have and your license, you just eliminated from being “hungry” and needing those pants or sale item.

The steps don’t really change we all have Personal Finance Leaks, look around read a personal finance website like Wealth Within if your Australian of course , nobody has it perfect.  If you follow these steps I really do think you are a step closer to stopping your PFL, I know it worked for us.

 What’s your Personal Finance Leak(s)?

26 Responses to “Personal Finance Leak

  • Few years ago I was addicted (I can say this) to Travian (an online game). Not only would I waste few (working) hours/day, but I also paid for ‘gold’. 6 bucks here, 12 bucks there, nothing much, but it still got to 100-200 hundred in an year. I just quit cold turkey and never touched the site again
    dojo recently posted…The True Cost of Being in Debt – Wasted OpportunitiesMy Profile

    • EvenStevenMoney
      3 years ago

      Sounds like gambling, except without ever getting returns. I think for your sake you did the right thing.

  • Hmm, good question. I’m on a very tight budget and sometimes don’t make my projected income so that many things become a leak, but many of those items are necessary. Even though it’s not much at all, probably coffee could be a leak. I love a coffee (plain) after I work out and I’m usually about 30 minutes away from home so I get lazy and get one at Starbucks. Probably once or twice a week. Probably doesn’t add up to too much but again with a tight budget I probably should eliminate it entirely, even though it’s such a small pleasure. Sigh…

    • EvenStevenMoney
      3 years ago

      I guess it depends if you have it built into the budget for the coffee. If in your “coffee budget” you have $0 and you keep getting Starbucks then yeah that’s a Personal Finance Leak!

  • Our financial leak was eating out several years ago! Now our leaks mainly revolve around the kids- $20 for a dance class here, $15 for a birthday party gift, etc. It’s fine as long as I budget for it, but our expenses are going up because they are just getting older and getting involved.
    Holly@ClubThrifty recently posted…4 Reasons Zero-Sum Budgets Are AwesomeMy Profile

    • EvenStevenMoney
      3 years ago

      I can’t even imagine all the things kids “need” and/or “want”, best of luck cutting out that PFL.

  • Nice article – I think we all have our financial leaks within our budgets. Like you, restaurants are our vice as well, although we have successfully curtailed many of those spending habits as of late. The key for us was to create a series of short term goals that will allow us to get to our long term goal.

    Our long term goal is moving to Sedona, AZ within about 5 years. But like your example of losing weight, it is far too easy to say, “Eh, we’ll start to REALLY save next month” because relocation is a lofty goal that is big enough to easily push off to the next month…and the next, and the next.

    So instead, we created a series of shorter term goals that we need to meet first. An example is we’d like to buy a condo or townhouse in Sedona early next year. So, this brings our 5-year goal to relocate a little closer to home by committing to purchasing (and subsequently renting out) a townhouse in the very near future, which keeps us on the straight and narrow. If we compromise on the shorter term goals, it is very easy to link that failure to missing our ultimate goal of relocation. This is what helps us to not push things back into the future for the [often times irresponsible] benefit of our current selves.

    But, everyone has their own techniques to managing this. Only taking out what you need is a damn good way to keep yourself spending on what you should be spending, and no more. Take cash to the restaurant and leave your credit cards at home – that’ll teach you to spend wisely!
    Steve Adcock recently posted…Using Etsy to generate passive incomeMy Profile

    • EvenStevenMoney
      3 years ago

      Having short term goals along the way I certainly like that and I am with you, when you start putting goals in front of you, you start noticing and getting closer to each milestone. I don’t pretend to have the best budget out there, but we certainly try our best to get to our short and long term goals a little faster with each dollar.

  • Since I have roommates, my current leak is cable. If I lived alone, I’d ditch it for Netflix and Sling TV (although I need to do more research on this but $20/month sounds great compared to cable prices).
    Fervent Finance recently posted…Starting the Path to FI/REMy Profile

    • EvenStevenMoney
      3 years ago

      How much is the difference in price, I mean if you have 3 roommates and a $100 cable bill, spending $25 month works for me.

  • I can’t think of any financial leaks that we have right now. We have a good control over of our budget and have allocated money for the different monthly spending. If anything I guess our financial leak would be some of the fancier food items that we purchase… like organic nut butter and etc.

    Leaks are important to fix. If you have even the smallest leak on a boat, you will eventually sink.
    Tawcan recently posted…Achieve financial independence and explore the worldMy Profile

    • EvenStevenMoney
      3 years ago

      I like that, “If you have even the smallest leak on a boat, you will eventually sink”.

  • We have worked hard over the last year to plug all of our finance leaks. The only one that still remains I’d say is at the grocery store, specifically snack or junk foods. I do try to keep it to a minimum, but my tracking efforts let me know when that so-called minimum gets out of control. So then I reign it back in and stick to the basics.
    Mrs. Maroon recently posted…Optimizing Debt Repayment and Retirement ContributionsMy Profile

    • EvenStevenMoney
      3 years ago

      Nobody says it’s easy, as you saw in the post it took a couple tries to really get the PFL taken care of or at least plugged as you say.

  • Great post Even Steven!

    I know that one of my biggest financial leaks is eating out. The wifey and I love food. Although we cook a lot, we still figure out a way to spend almost $1,200/month eating out for dinners on Friday-Sunday. We typically cook at home mostly during the week. We also have a tendency to be pretty generous with picking up the tab.

    We have talked many times about trying to reduce this expense, but with no success. We even set up a budget in Mint, but we tend to just blow past it every month. However, we have been successful in other areas and in the last year have reduced our expenses by at least $1,500/month.

    Recently on my blog I announced that I will start tracking my income and net worth. And will produce a detailed monthly financial report starting with January of 2015. My wife knows I plan to publish report on a monthly basis and will likely read it. I am hoping this will finally give us the push to cut our eating out budget in half.

    I just logged into my Mint and see that we spent $20,000 in the “Food & Dining” category. This category does also contain all of our spending at the grocery store that averages about $500/month or $6,000/year for two (we buy good meat and organic stuff). That means we still spent about $14,000 on meals out. My goals is to get that number under $10,000 this year and eventually hold it to about $6,000/year.

    We get too much joy from eating out to ever cut it completely. But that is a lot of money to be spending here.


    • EvenStevenMoney
      3 years ago

      I’m not judging, but WOW, $1200 month that does seem on the high side, just quick math of $300 weekend or $100 each day for a meal. I’ll say it’s a great opportunity to cut out some expenses for your budget and having the accountability on your blog should really help!

  • Oh yes, blackjack is killer. I have a very hard time resisting using some of my winnings for blackjack, especially when you know it’s possible to come out WAY ahead (and relatively easy to limit losses i.e. only playing with $40-$60). As far as my personal finance leak, I would have to say it’s our house. I could invest or save more, but we have upgrades to do and I will always prioritize those over saving more or investing more. Part of it’s an investment and part of it won’t be recoverable.
    DC @ Young Adult Money recently posted…Are Your Hobbies Costing You Too Much?My Profile

    • EvenStevenMoney
      3 years ago

      The house is a big PFL for a lot of people out there that’s a good one. I remember the multiple visits to the hardware store each weekend right after we bought the house and all I could think of was didn’t we just spend thousands of dollars already why are we spending more?!

  • My personal finance leak was definitely eating out. We used to eat out 3-4 times a week, then we decided to get control of our money two years ago and focus more on controlling our food expenses. We figured out that we saved about $5,000 last year by eating in alone. Talk about a leak! I don’t miss the eating out because I have found great copycat recipes and they are all MUCH cheaper!
    Shannon @ Financially Blonde recently posted…Happy Hour Session 1My Profile

    • EvenStevenMoney
      3 years ago

      That’s awesome to save $5000 for a year, I know some people talk about getting a Big Win, but they forget that these little wins add up, $5000 is a lot of money to save, I mean that’s a used Honda.

  • Steven,

    Great analogy between poker/blackjack and PF!

    My personal finance leak still is video games, although I’ve cut back a lot on them in recent times. It’s really hard to resist Steam sales when almost everything is 75% off and can be bought for €5. I’ve solved that problem by not buying anything new until I’ve finished another game.

    No More Waffles recently posted…Dividend Income for January 2015My Profile

    • EvenStevenMoney
      3 years ago

      Thanks NMW. Video games are a good one, my wife told me a story the other day that her parents bought her a PS1/XBox one of those with a game and they told her once you conquer the game we will buy you a new game, well she didn’t conquer it so that was pretty much the end of buying video games. I’m not sure if that works the same way as back then, but you are right on with the waiting till you finish the game.

  • It seems like eating out is the #1 PFL for everyone that has a blog! WE have gotten much better about it, but I will try to enact your advice about planning ahead for lunches. I have already cut it down, but am still in a hurry a couple times a week and forget or don’t make my lunch that day.
    Vawt recently posted…Financial Acumen Can Be LearnedMy Profile

    • EvenStevenMoney
      3 years ago

      Sounds great that you are making an attempt to cut down that personal finance leak, maybe we all can get it sealed one day.

Trackbacks & Pings

  • I Delivered Food for $4 | Even Steven Money :

    […] you may know one from reading Even Steven Money, my personal finance leak is eating out. I would say my eating out habit is mostly in check, but Mrs. Even Steven might hurt […]

    3 years ago
  • Meet Mrs. Even Steven Money | Even Steven Money :

    […] Mr. Even Steven Money probably wishes I was more like my parents in this area because I do like to splurge a little on eating out and love to take my family to new restaurants.  I mainly enjoy it since we could not do it much […]

    2 years ago

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