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I Can’t Believe How Much These Small Purchases Are Costing Me Every Year

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I Can’t Believe How Much These Small Purchases Are Costing Me Every Year

Have you ever stopped to add up all of the tiny, seemingly inconsequential expenses that we accumulate daily, weekly, or monthly? A few dollars here, a few dollars there add up to big bucks at the end of the year. You will be shocked at how much those unnecessary expenditures are leaching out of your wallet.

1. Make mine a grande.

Your Starbucks habit may be costing you big time. I paid $4.59 for my last Grande latte (Cinnamon Dolce is my favorite). At that price, five days a week, you’d be spending nearly $100 per month, or $1193.40 per year at Starbucks. And that’s just the coffee; throw in a muffin a few times per week and you’re looking at $1500 per year.

What this could buy: With that amount of money, you could buy a new laptop or some living room furniture or maybe a cruise for two.

2. Roll that money up and smoke it.

If you’re still one of the smokers among us, you might as well just roll your money up and smoke it. Though the cost of your cigarette habit will vary by location, from around $5 in Kentucky to $14 in New York, any way you look at it, it quickly adds up. With the average smoker in the US consuming just under a pack a day, you’re spending around $50 per week—that’s $2600 per year. Want to kick the habit? Here are some great tips.

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What you could buy: That would pay for a family vacation. Disney anyone? Or maybe you’re more of a big screen with surround sound and gaming type. You could outfit a family room nicely—every year.

3. The salon habit.

Love that straight, smooth look? If you go to your salon for weekly blow out, at an average of $25 a pop, you’re spending $1300 a year. If you’re a Brazilian blow out consumer, those will set you back another $800 a year. Is smooth hair worth that much to you? Maybe. Maybe not.

What you could buy: You could spend that money on a massage every other week instead or some really fabulous outfits or a bunch of great shoes.

4. Watch those pesky bank fees.

Are you still paying a monthly maintenance fee? Better check your statement. There are so many free checking accounts without fees; it’s foolish to pay that $12 per month when you don’t have to. Also, did you know that most banks now charge a “statement fee” to mail your monthly statements? It’s usually only $2 or so, but that adds up. Get it via email and it’s free. How often do you hit the ATM? According to recent statistics, the average ATM user will hit an ATM 8 times a month. If that ATM is not at your personal bank or if you get cash back at the grocery store, you’ll pay an average of $3 per transaction.

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Some banks charge $5–7 for replacement card and shockingly a few banks are now starting to charge for a “human teller” service. Seriously, $8 to deal with a live person. Even without counting the ridiculous human teller fee, you could be paying more than $500 a year in completely avoidable fees.

What you could buy: With that $500, I could buy a gym membership or maybe better a few stocks and a session with a financial planner.

5. Take another look at that cell phone plan.

According to some recent studies, as many as 80% of cell phone users are overpaying on their plans, especially smart phone users. That’s crazy. Check your usage over a few months. You may be able to downgrade your voice minutes, or you may be paying for voice or data overages. Either way, you’ll save money by “right-sizing” your plan.

You may be surprised by how much you can save by getting an unlimited minute plan or by switching carriers. Smartphone users are overpaying an average of $10–20 per month according to the studies, and if you have several smartphones in your household, it’s even more. That’s $200–500 a year.

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What you could buy: That extra $200 could buy a nice shiny new device or something really cool, like an activity tracker or GPS watch.

6. Keep your hands off the merchandise.

According to a Harris Interactive Poll, the average American spends $200 a month on impulse buys, the biggest offenders being clothes and shoes, toys, technology and checkout counter items. These frivolous purchases are most often triggered by sales, discounts, pacifying children’s wants and convenient placement by retailers. If it’s on sale, but you didn’t need it, then did it really save you anything?

Shopping online can help avoid checkout line temptation, but the instant gratification can cost you even more. The lesson? Stick to your list, wait until the next trip, or impose a 24–hour waiting period. Ask yourself if the $2400 a year is truly worth the payoff.

What you could buy: Instead of shoes you don’t need, another cute sweater, yet another device to add to your collection, more toys to clean around or junk food that adds pounds, perhaps you’d rather buy a comfy new mattress, a new kitchen table, or a terrific stereo. Or you could pay off the credit card bill for last year’s impulse buys.

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7. A dollar and a dream.

We are lottery-hungry here in America, more so than any other country in the world. And while the average American spends about $200 a year on lottery tickets, $4 per week, the poorest Americans spend nearly $12 a week, totaling more than $600 yearly. Since your odds of winning the lottery are somewhere between 175,000,000 and 200,000,000 to 1, it really is a terrible waste of money. In fact, your odds of being struck by lightning, having identical quadruplets, or being killed by a flesh eating bacteria are more likely.

What you could buy: While $200 doesn’t buy much, it does buy some dinners out, a designer bag, a new suit, or a great dress.

8. Brown bag it.

A recent survey cited that 70% of American workers go out to lunch at least twice a week and spend an average of $10 a pop, coming in at around $1000 a year. And for those who go out every day, that number comes in at $2600 each year. I don’t know about you, but I’ll be brown bagging it.

What you could buy: With the money you’ll save by packing your lunch, you could buy a brand new refrigerator full of food. You could use the extra money to buy organic or if you prefer to invest it in yourself, take a professional development course or college course.

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However your money is leaking out of your wallet each month, you might want to consider how else you could be spending it. At least be conscious of where your money is going. And something else to consider: if you reclaimed even $100 per month and invested it, even conservatively, you would accumulate nearly $40,000 over the next 20 years and that number would double each decade.

Featured photo credit: Money – Savings via flickr.com

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Royale Scuderi

A creative strategist, consultant and writer who specializes in cultivating human potential for happiness, health and fulfillment.

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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