Money Suckers Vs. Expenses

Money suckers

unnecessary and costly expenses

Expenses

money spent in doing an activity

little gratification compared to cost vs. maximum value for cost

Example: A candy bar is an unnecessary expense, but it’s not a money sucker. The monthly payment on that luxury car might be, especially if those funds could go towards something that could give you more enjoyment or more profit. An office space is a necessary expense for many businesses that need to see clients in person. A well-located, sumptuous office decorated to impress is a money sucker if it serves more to stroke the owner’s ego than to secure additional business.

Key Point: Money suckers are high-priced, unnecessary expenses. Unnecessary expenses are expenses that can be eliminated without a significant reduction in profitability, quality, or happiness. The average household probably spends 10-25% of its income on money suckers. The average company probably wastes 5-15% of revenue through mismanagement, lack of automation, and ineffective procedures. Most people resist cutting these suckers, but when they do, they free up funds for more satisfying purposes.

Benefit: We often spend money to meet a need or give ourselves a good feeling. When you find healthier and more direct ways to meet your needs, you’ll be less likely to take on a money sucker.