As the economy remains sluggish, families are trying everything to save money. One of the best ways to accomplish this is to evaluate your spending habits. In turn, it can help you notice costly behaviors. Along with this, knowing some of the spending pitfalls is a great way to protect your finances.
Here is a look at some of the ways we waste money:
1. Having too much cell phone service
Many customers sign up for cell phone plans they won’t use. Therefore, it’s important to monitor your usage and make adjustments regularly. Better yet, instead of signing up for a contract plan, buy a prepaid phone. In many instances, you can receive a great phone and a plan that has all you need for less.
2. Using your credit card to earn reward points
Many credit card issuers offer a points system, whereby for every dollar you charge you receive a point. Some creditors may offer additional points for doing certain things like charging your groceries or paying for your dinner with plastic. Here’s the problem with this approach: They are teaching you to use your credit card in instances you don’t need to. Further, unless you pay off your credit card balance monthly, the amount you pay in interest likely will be greater than the reward points you receive.
3. Paying too much for credit
If you have a good credit score, then there’s no reason why you should have high interest rates. Call your creditors and request lower rates. In many cases, they may be willing to comply out of fear of losing you. In turn, you pay less for credit, which can make it easier to settle your debts.
4. Having a checking account that is only beneficial to the bank
While the days of free checking accounts are becoming outdated, there are institutions that offer competitive terms on these. There’s no reason why you should have to pay your bank a service fee just for them to hold your money. When searching for a bank, look for one that offers exceptional customer service and low fees. This can help you keep more of your money.
5. Going overboard with impulse buys
We all have things we buy that make us happy. Whether it’s a morning latte or a gossip magazine, these are purchases we look forward to making. While it’s good to reward yourself, be careful not to overindulge. For example, if you want to buy lunch out one day, that’s great, but be sure to pack one the rest of the week. It’s important to keep this balance or else you can develop costly behaviors.
6. Spending too much on groceries
The goal of grocery stores is to keep consumers shopping. Therefore, be sure to limit your trips to the store by planning meals. That way, it can help you stock up on the ingredients you need. Additionally, take the time to cut out coupons, and if your item isn’t on sale, buy the store brand.
7. Being lazy
If you don’t develop or evaluate your budget, how can you keep track of your money? This is a simple step to do and only takes a small chunk of your time. However, by ignoring this you are setting yourself up to lose money due to lack of planning.
These are just a sampling of the many ways you can waste money. Therefore, it’s imperative to monitor your finances regularly, as it can help you spot costly behaviors. By understanding how and why you spend your money, it can help you make better decisions, which will help you save more.