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6 Habits Which Are Costing You Money

6 Habits Which Are Costing You Money

If you are living in Manchester, and on your way back from office, eats a pizza at Wilmslow Road, you are surely spending a good amount of money on something which you should clearly avoid- for your health reasons.

Few of us do such things repeatedly- unconsciously spending money on small things. Money which could have been saved is spent on buying an extra cig or for that matter Latte coffee.

Is it wrong? Well! It depends

It depends on how you value things- for you, latte may be important because it gives you a caffeine boost you need just before you start your day

Or for someone like me who drinks 5 to 6 glasses of water immediately on waking up- just to get the same boost without caffeine. (if you drink coffee just to get a boost, try drinking a full bottle of water first thing in the morning and you will be more alert! Just try it) it may not matter much…

If you want to save money by avoiding some small expenses, here is the small list of mini habits which are costing you at least you hundreds of dollars a month:

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1. Buying pizza on your way home

I know, you guessed it right! I was going to discuss this first because most of us feel too tired after day’s work. Single, young professionals, looking to make their mark and get quick promotions, work too hard often.

By 5 pm when you leave the office for home, all the motivation and willpower is almost at zero level and you don’t feel like cooking.

If you live in a large city, peak evening hours means a lot of rush in the metro and more stress to deal with.

More stress- less willpower and you know what, on your way back, you just pull out your wallet and buy a pizza.

A pizza costs you on average $5 to $10 and if you buy at most 2 pizzas per week, you are already spending 40 per week on something you can easily cook at home or buy a really nice dinner at fraction of the cost.

2. Putting your money in banks which don’t offer interest on current accounts

I’m nott going to inform you about a secret current account offering you 5% rate but what I’m going to tell you is that you can squeeze out some extra cash if you place your money in accounts which offer you some interest.

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You may be thinking, how this one is a habit? Right?

Because you are too loyal to your Bank- you have a long history with them or probably it was the first Bank which agreed to open your bank account (My first Bank gave me an appointment to meet the Bank guy for opening my account after 6 weeks from the date I requested to open my account).

So yes over the period of time, using your Bank may be your habit because you simply don’t want other Banks.

But if it is costing you money, it’s time to rethink.

3. Buying for current Christmas season only

Buying on Boxing Day sale is a habit- a cultural phenomenon as people spend millions every year on that sale.

We buy Gifts, cakes, wine, cards, gift wrappings, and decorations just before the Christmas. However, most of the things are bought for that particular event i.e. bought in quantities which are consumed on that Christmas.

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If you can just stock up gifts (non-perishable items) for next year, you can save at least amount equal to the inflation.

If you are not a fashion crazy person, you can easily save a lot by buying next year’s items such as shoes, bags, and clothing on this Boxing Day Sales.

4. Supporting your teenage children

This one could be really emotional. If you have teenage children and you are still supporting them with pocket money and is paying for their other stuff, you should rethink because you are losing the opportunity to save.

5. Not preparing and following a budget

No one can deny the importance of having expense budget and following it. I guarantee you that if you just start tracking every single penny you spend; you are surely going to save a lot. Start developing this habit and build it as a life-long habit.

For me tracking expense is a habit because it requires repetition and if you keep on repeating this task, it will become a second nature to you record and track your expenses. Gradually you will realize where your money is going and what you can do it save it.

6. Stop paying with credit cards

In next few years, most of the developed countries will be check-free with banks only issuing money against plastic or online.

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But believe me, the joy of paying in cash is more than paying through the card.

When you pay through cash, subconsciously you are exercising control over yourself. Except your direct debits, the habit of paying cash can help you reduce your expenses. Many people spend more and get their balances transferred to balance transfer credit cards which can reduce your cost for some time but ultimately you have to pay.

Above are some simple facts which can cost you a lot of money in long run. Just be more observant of what you are spending on and you can easily save a lot. Spending without a purpose is always going to hurt your wallet so be careful.

Featured photo credit: Stylist via stylist.co.uk

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Adnan Manzoor

Data Analyst & Life Coach

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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