9 Bad Spending Habits That are Killing Your Budget
Alright, it is time to get our budgets back on track and get rid of bad spending habits.
Getting rid of these horrible spending habits could possibly save you thousands of dollars a year. It has for my wife and I.
We all have been guilty of bad spending habits at one point or another in our life. In fact, a lot of us might still be guilty of these bad spending habits, I know I am.
Let’s take a look at these 9 bad spending habits that are killing your budget and save you some money!
1. Not Paying Attention
We all need to pay attention to our bad spending habits. This is something that really turned around my wife’s and my finances. We now track our spending on an almost daily basis by using the Mint application.
Tracking your spending allows you to see how quickly frivolous spending can really add up. Until then you really do not realize how those horrible spending habits are really killing your budget. My eyes were blown wide open after the first week of tracking.
Here is what we did. We downloaded the Mint application and set up our budget within the application. Checking the application almost daily I am able to monitor our transactions and see how we are doing in each budget category. I am also always trying to see new ways as to where we can save money.
I love Mint. It is clean. Simple to use. But very powerful. If you do not know Mint you should check out our Mint App Review. Here Andrew walks you through as to what the application is and what it can do for you.
2. Making Excuses
It is so easy to make excuses to enable bad spending habits. It is so easy to skew the purchase from a ‘Want’ to a ‘Need’.
But do you really ‘Need’ it? My guess is probably no!
Instead of focusing on materialistic items, focus on your final goal. Remember that you want to pay off your car by next year. Or that you want your student loan payments to disappear three years from now.
It might be tough in the beginning to let that item go but guess what. Something better will be out once you pay off your debt. Treat yourself then!
3. Eating Out
I talked about this a few weeks ago but eating out is the toughest on this list for me. I love food and I live in a foodie city, Denver. Surrounded by so much good food and having a 1-year old that wears you out on a nightly basis makes it very tempting to eat out a lot!
One solution would be the PBJ Theory that Andrew came up with a few weeks back. If you have not read it, I suggest you do. It is very cleverly written.
While I think think the PBJ Theory is a good emergency fall back, I do not think you should always rely on it (Andrew agrees with this). Instead, plan that you will be too tired to cook an intense meal (an hour or more cooking time) a few times a week.
There are plenty of healthy recipes out there that can be put together within 20 minutes. Just the other night I made us these very yummy black bean quesadillas for dinner. The meal took about 15 minutes to cook and we were very satisfied for under $8.00.
The best part about this meal is that all of the ingredients could be frozen if you do not get to the meal right away.
4. Not Eating What You Have
We have all been here. We find some awesome food that we plan on eating in the coming days. Then those days pass, then weeks pass, and then a couple months. One night you are hungry for a snack and remember that awesome food you found a while back. So you run to the fridge to only find it growing a tree out of it (mold).
Do not be this guy. This is literally just throwing money into the garbage.
My wife and I keep a pretty tight weekly menu throughout the week. I make our meals to feed four people so we will have leftovers for lunch the next day. Then that is it. Those leftovers are done. If there are more, like from a crock-pot meal, I will freeze for a meal later on down the road.
We also do not buy that many perishable snacks for home. Most of the snacks we have are healthy non-perishables. We do not buy any more until those initial snacks are gone.
For more information on how we save money on groceries check out my 7 Ways on How to Save Money Groceries article.
5. Worrying About What Others Have
As humans, we tend to compare ourselves to others. This comparison could include lifestyle, looks, or what the other has that you do not. Do not fall into this trap as it can lead into a dark spiral that creates bad spending habits.
You might feel the urge to go buy that sweet new phone because your buddy has it. Or you might want to upgrade your car because it looks like a junker and not like the sweet new SUV your neighbor just got.
Sure, it would be awesome to have that new shiny toy but is it really worth it? Not long after the joy it brings will wear off resulting in your wanting a new shiny toy to bring that joy back. See how this turns into a nasty spiraling circle of bad spending habits?
Instead, I propose you do not buy that new shiny toy. It is a temporary band-aid. A distraction to what you really want. Financial freedom.
You should work on paying off that debt you have. My wife and I were very aggressive over the summer to get our car paid off (see how we paid off $7,000 in 3 months). Even though it has been a couple months, I am still finding joy because I now know I never will have that payment again. That liberation never goes away.
6. Monthly Subscriptions
Man, it can be so easy to spend money on these monthly subscriptions that we have available to us now. They are set up by the companies so brilliantly as well. We purchase them, set up the monthly charge, and forget about them.
We spend $198.19 a month on subscriptions.
- Spotify – $9.99
- Netflix – $9.99
- Amazon Prime – $8.25
- Dollar Shave Club – $3
- Cell Phone – $116.20
- Internet – $50.76
Surprisingly, we were able to cut these back by a significant amount. Our cell phone bill was just under $170 a month. The internet bill was just over $100 a month before we cut out the cable and switched to an antenna for the local channels.
Also, since I can barely grow any facial hair, the Dollar Shave Club subscription was cut back to only come every other month.
Keep an eye on these subscriptions as they can easily be forgotten about and turn into bad spending habits. Overall, we have saved about $1,300 a year with our most recent changes.
7. That Fancy Coffee
I do not drink coffee so this one really is not applicable to me. But I do know enough people who spend WAY too much money by stopping by their favorite coffee shop to grab a $10 latte on the way into work every morning.
Even if a person grabs their latte three times a week, that is costing them over $1,500 a year. Just in coffee!
Now my wife loves her coffee and loves that $10 latte but she has made a rule that she cannot get one unless she has a gift certificate. She will ask for a gift certificate to Starbucks for Christmas and her birthday to crave her want. In between those times, she will just brew her own at home every morning.
8. Shopping Convenience
My wife and I have a rule that if we did not buy it on our weekly grocery trip, then we do not get it until next week. There is one exception to this rule, if the item is an essential ingredient to a recipe then we can go grab that ingredient.
When we do need to run to the store during the week we make sure that we do not shop at a convenience store. We will take the extra few minutes that it takes to drive to a grocery store to grab the item.
Convenience stores up-charge their merchandise because of the convenience it is to shop at them. Shopping here instead of going the extra two minutes out of your way is pure laziness and just throwing money away.
Just stay away from these stores. There is no real reason to shop at them.
9. Buying Unnecessary Items
Don’t get me wrong. I am guilty of this all the time and just recently started to learn how to control the urge to spend because I want that new shiny toy like everyone else has.
We recently just paid off our RAV4 14 months early. Our other car, an Accord, is really beaten up, I mean really beat up. I’m now the guy that no one wants to park next too. Because of this, I had the urge to trade in the Accord for a new 4Runner, which I love.
When those thoughts started running through my head I needed to stop everything and refocus that my wife’s and my next goal is student loans. We could not do that by adding on a $600 monthly car payment.
Plus, even though it looks horrible, the Accord is mechanically sound. There is no reason to get a new car right now.
The next time you want to get that new shiny toy, I suggest you stop everything you are doing and refocus on what your real goals are. Those are what will bring you true happiness in the long run.
Now Go Break Those Bad Spending Habits
Just like me, I am sure you are a work in progress. It takes a lot of time and effort to break bad habits. I do not expect you to go out and change all of your bad spending habits within 24 hours.
That would just be crazy.
Pick one bad habit and start changing that one first. Then add on another one to change. Keep this positive cycle going until you feel like you have everything under control.
Changing your bad spending habits will get you on the right path to financial freedom.