10 Bad Money Habits You Need To Break
Big or small, some financial habits can zap a solid financial plan and leave smart savers with empty wallets. To avoid buyer’s remorse and similar guilt about neglecting your finances, you need to know what habits might be costing you extra.
Check out these bad spending habits and identify how you can learn to eliminate them.
1. Paying Bank Fees
Many banking fees can be avoided, so there’s no reason to pay these if you don’t have to. Instead, find a financial institution that will allow you to avoid certain fees.
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With the right checking account, you can avoid the monthly fee with a monthly direct deposit or minimum daily balance of $500 or more. When it’s that easy to avoid a fee, you should always take advantage so you can keep more of your money in your account.
2. Going Out to Eat
According to various studies, Americans spend roughly $330 a month dining out. No need to waste money on lunches at cafes or fast-food joints when a brown bag lunch is cheaper and, if packed correctly, more nutritious. Likewise, meal planning your family dinners at home can save a bundle.
3. Having Wine With Dinner
If you do go out to eat, buying wine with dinner is a pricey proposition. Restaurateurs routinely mark up bottles by about three times the wholesale price — sometimes more. Consider a BYOB-friendly restaurant instead or, if you can bear it, skip the wine altogether when dining out and wait to pop a cork until you get back home.
4. Keeping Your Gym Membership
Your unused gym membership — even one you managed to save on — is not a good deal if you’re not actually using it. Attracting members who won’t actually come work out is a strategic move by many gym owners.
The secret is to know yourself. If you’re not going to work out, don’t sign up to make gym payments.
5. Making Impulse Purchases
Adding a pack of gum to your shopping cart at the grocery store checkout might not seem like a big deal, but habitual impulse shopping is.
Online retailers, for example, have added new tricks to entice you to return to your abandoned digital shopping cart — such as by emailing you reminders and promotional offers — and making it easier than ever to make purchases, like offering in-store pickup. Those unplanned expenses can easily ruin a well-planned budget if not kept in check.
6. Not Keeping an Emergency Fund
Without an emergency safety net in place, it’s easy to break out the credit cards and ruin a well-thought-out budget if the car breaks down or the roof leaks. Having an emergency cushion of three to six months’ worth of expenses can keep your plan in place when unexpected events occur.
7. Buying Groceries Without a List
People who shop without a list can easily fall prey to grocery shopping “creep,” the phenomenon that happens when you add “just one more thing” to your cart several times per trip. You probably don’t need chocolate-covered pretzels or frozen waffles.
Having a list keeps you from running afoul of your budget and spending more than anticipated.
8. Your App Addiction
In the list of things to waste money on, smartphone apps are a big one. Those $1.99 purchases seem inexpensive enough, but they can snowball — especially if you have kids who are adding to the overall purchase price or frequency.
Consider free app downloads exclusively or cap yourself and your family with a monthly app budget.
9. Not Checking Your Credit Report
People with top-tier credit ratings qualify for the lowest finance rates when car or home shopping. Over a 30-year term, a quarter of a percentage point can add up to thousands of dollars.
Check your credit history regularly and clean up any problems as soon as they arise.
10. Ignoring a 401(k) Match
One in four employees doesn’t save enough to receive the full 401(k) match provided by his employer, according to a report by investment advisory firm Financial Engines. That means the average employee leaves $1,336 in his employer’s coffers each year. That’s like telling your boss you didn’t want a pay raise this year.
It’s recommended to max out your 401(k) contributions, but at the very least you should contribute enough to get your employer’s match.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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