Many people go through their day without realizing how much they spend. But when you track your spending to make a budget, you may be surprised to see where your money is going. If you’re like me, you may discover that you have poor saving and spending habits that keep you from your goals. For those who are struggling to build their savings, here are 10 of the most expensive habits that prevent you from saving money.
10 Expensive Habits that Prevent You from Saving Money
1. Eating Out
When it seems like there just aren’t enough hours in the day, the last thing I want to do is cook. And with more delivery apps than ever before, it’s hard to resist the temptation to get my favorite foods from local eateries. Although it is easier and more convenient, eating out is one of the most expensive habits that prevent you from saving money.
Estimates show that you will spend five times more eating out than if you cook at home! Not only is the food more expensive, but you also need to include the service and delivery fees as well. So, every time you stop for coffee, go out with friends, or have something delivered, it sets you back. Eating out is an easy solution when you’re tired, but if you have larger savings goals, it’s worth the short-term sacrifice.
2. Impulse Buying
Another bad spending habit many of us fall victim to is impulse buying. This is why I try to stick to my shopping lists. But, if you like to shop online or scroll through social media, you are bombarded with advertisements and special offers. Even the most frugal shoppers may find themselves buying things they don’t need.
You may excuse the overspending because of seasonal sales. Or, perhaps it’s a coping mechanism that fills an emotional need or offers instant gratification. Whatever the reason, impulse buying is bad for your finances. It’s better to shop around for the best deals and compare prices.
3. Relying on Credit Cards
If you don’t understand how credit cards work, relying on them could ruin your finances. Sure, they make like simpler. But, it’s also easy to lose track of how much you have spent. And, if you have multiple cards, it compounds the problem.
Those who don’t pay off the monthly balance are digging themselves deeper into debt. Making minimum payments may keep creditors off your back, but it won’t pay off the principal. You are simply paying for the high-interest rates which could keep you in debt for many years to come.
4. Personal Vices
When we are stressed, many of us turn to vices to take the edge off. However, personal vices such as smoking, drinking, gambling, or junk food are costing you more than you realize. Not only are they addictive, but they negatively impact your physical and financial health.
If you overindulge in your vices, you could be taking years off your life and money out of your pocket. While they may feel good in the moment, personal vices are some of the most expensive habits that prevent you from saving money.
5. Late Payments
Making late payments is another bad habit that undermines your savings goals. Being late comes with its own set of problems. However, not paying your bills on time creates extra fees. If you have several late payments, it can rack up hundreds of dollars in unnecessary fees. Furthermore, delinquent payments will also affect your credit score. Setting notifications and marking due dates on your calendar can help you keep more of your hard-earned cash.
6. Unused Memberships
When I sat down to review my monthly budget, the amount I spent on membership and subscription fees was shocking. However, the amount I wasted on unused memberships was even worse.
Although it was only $5 here and $10 there, it added up quickly. When I took a closer look, I rarely used half of them. Since they had automated payments, I hadn’t noticed how much I was spending. But once I saw how much I could save every month, I consolidated many of my streaming services and found ways to save more each month.
7. Wasting Food
Every year, Americans throw out 222 million tons of food. If you took the time to add up the total costs, it would be an astronomical number. However, all you have to do is look at the price of fresh produce and you will get an idea of how much money you waste.
It’s expensive to eat healthily. And, fresh fruits and vegetables turn quickly if you don’t use them. So, if you aren’t eating the produce you bring home, you are literally throwing away your money.
8. Not Negotiating
I didn’t learn until later in life that I was even making this mistake. However, when you are facing significant debt, negotiating can save you a ton of money.
I was surprised to learn that you could negotiate utilities and cell phone service, medical bills, and insurance. If you are willing to pay a cash settlement, you can also negotiate credit card debt. If you’re hesitant to try, remember that it never hurts to ask.
9. Ignoring Financial Statements
It’s easy to toss financial statements and account notices aside. But ignoring a problem won’t make it go away. Those who are having financial struggles know how small issues can grow into huge problems. That’s why it’s so important to review your monthly statements. If there are additional charges, fees, or anything out of the norm, call your financial institution right away. If you put it off too long, you may be left paying for someone else’s mistakes.
10. Putting Off Investing
Although it takes the final spot, this is probably the most expensive habits that prevents you from saving money. Unless you are independently wealthy, you need to invest to save enough for retirement. Otherwise, you are sabotaging yourself and your future.
It’s easy to put off retirement planning when you have other financial obligations. Investing becomes a low priority when you have bills to pay. However, you don’t need a ton of money to get started. And the sooner you begin, the more you can earn by taking advantage of compounding interest and employer-contribution matching.
Creating Better Savings Habits
If you are committed to making a change, you have to take control of your finances and change your relationship with money. It all starts with self-reflection and honesty. You can’t lie to yourself or avoid the problem if you ever hope to establish good habits.
You need to take an objective assessment of your finances and make a plan. However, if you feel like you are drowning in debt or need expert advice, you can always consult with your financial advisor to best determine how to get back in the driver’s seat.
Read More
Come back to what you love! Dollardig.com is the most reliable cash-back site on the web. Just sign up, click, shop, and get full cashback!
Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.