Daniel Wesley is the founder and CEO of CreditLoan.com, a website that educates consumers about various personal finance issues. Among some of the topics discussed are bad credit loans, credit cards, auto financing, and many other credit and financial help issues. Connect with Daniel on Twitter and Google+.
Paychecks never seem to go as far as you think they should and your piggy bank is looking pretty empty these days. Some of the choices you make every day could be hurting you financially. By identifying the extraneous items you’re spending money on and eliminating those purchases, you can make a significant difference to your finances over the course of a few months or a year. Here are five common spending habits that could be wrecking your budget:
5 Spending Habits Wrecking Your Budget
– Gambling
It’s the thrill of a shot at winning it big, but whether it’s the lotto, casinos, or a work pool, you can waste a lot of money gambling. A few dollars here and there on scratch-off tickets when you fill up with gas start to add up quickly. Quit cold turkey, avoid situations where you might be tempted to gamble, or seek help if you think you might have an addiction. Think of it this way: you’re likely to make more money by investing than gambling it away.
– Smoking
Many people consider certain parts of their lifestyle a normal expense rather than a luxury, but cigarettes are expensive and costly to your overall health. Sit down and add up the amount you spend on cigarettes over the course of a week, month, and year. Many people will be shocked at the actual figure. Like gambling, there are ways to kick this habit. Stop on your own, seek a doctor’s assistance, or join a program. However you decide to eliminate this expense from your life, your body and wallet will thank you for it.
– Extraneous Spending on Beverages
Like most people, you probably look forward to a caffeinated pick-me-up at some point in the day, but consider how much you’re spending on extra beverages each month. From coffees in the morning to soft drinks when you’re out at dinner (which are usually the same price as a whole two-liter bottle at the store!), the cost of buying drinks at restaurants and convenience stores adds up fast. Find money-saving alternatives like refilling a sports bottle with water throughout the day or making your own coffee at home. However you work it out, if you stop buying beverages, you’ll save money at every meal.
– Eating Out
You might be surprised to learn that the average American spends approximately $2,500 per year eating away from home. Now multiply that number by the number of people in your household, and you’ll get a better idea of why eating out is not a smart move financially. This doesn’t mean you need to completely deprive yourself, but stick to going out for special occasions rather than a couple of times per week. Make more meals at home, and cook a variety of dishes to prevent boredom. Save (and use!) leftovers. Buy more store brands or stock up on items when they go on sale. Pack a lunch for work. All of these are great methods of cutting your food cost down considerably.
– Paying for Unnecessary Services
We often pay a lot for convenience, but how much of it is really necessary? Do you truly not have the time for some things, or do you simply not want to do them? If you make the effort to limit the services you pay for that you could actually do yourself, you’ll be shocked at how much you will save. Mow your own lawn. Clean your own pool and house. Change the oil in your vehicle yourself. Give yourself a pedicure. Learn how to groom your pet. It may not be as convenient, but the money you save will really add up.
Going On the Attack: Planning Your Future
Once you’ve identified and eliminated your bad spending habits, re-examine all of your monthly expenses and create a budget; the next time you go to the store, don’t allow yourself to spend money on things that will exceed that budget. Audit yourself and evaluate the true value of what you’re spending money on to find even more ways to cut back, whether it’s your cable package, your cell phone plan, or the magazines you subscribe to.
The last step is figuring out what to do with all the money you’re no longer throwing away. It probably goes without saying that the best thing to do is save. Having extra funds stored away is always a good idea; unforeseen expenses can quickly crumble your financial well-being, and having money saved away is the best way to protect yourself and your family.
Being mindful of your finances is important at every stage in life. Minimizing excess can be a difficult process, but cutting out unnecessary expenses can significantly ease financial pressure. Recognize your bad spending habits, find a way to eliminate them, and take steps to make better choices in the future. Your piggy bank will be filling up before you know it.
Photo: Stephanx80
Beverages are definitely a big part of our food spending, though its decreasing slowly. It’s just how mr pop grew up – with endless supplies of 12 ounce cans kept in a separate drinks fridge, he’s just used to drinking things other than water. But at least his beverages today are a bit healthier than the Pepsi he grew up on.
I understand that smoking is an addiction, but at $7+ per pack I would do whatever it takes to quit. I am always shocked when I hear people say that they enjoy smoking and they don;t want to quit. I wish they would just give me their $7-$14 per day instead.
I never realize how much people spent on gambling and smoking. When I worked at a gas station part time for one summer I saw the same people coming in every day spending 10-15$ on smokes per day. The same ones would say they have no money for saving. Just sad.
It often helps many smokers to quit when they calculate their yearly loss from cigarettes! Not to mention the devastating health effects.
I almost always only get water when I dine out (which isn’t too often.) It’s crazy how much they’ll charge you for a pop! Also-to Sean- I agree that smoking is an expensive habit and not healthy, but depending on which region you’re living in prices aren’t always quite that inflated. They’re a lot cheaper in the south, and from what I know of my region only the tip top brands are in that price range.
I think it’s interesting that the article didn’t mention excessive alcohol consumption. This goes along with smoking… it’s money down the drain.
I used the cost of a pack of cigarettes when I was trying to encourage employees to contribute to their 401K years ago.
I certainly have spent my fair share on gambling. I was caught up in the poker craze and while I don’t play much anymore, I am lucky enough to have made money in the process. BUT I do play losing games, like blackjack…though I limit the number of times I play each year and budget how much I am willing to lose before quitting 😉
Smoking was a huge expense in our budget especially with both of us smoking. We quit just over a year ago and first off our health was priority not the money. The money was a great perk because now we were able to save much more than before. The best part was the 50% reduction in our life insurance premiums after one year. So smoking costs alot more than we bargained for but one of the best decisions we made, was to give it up.
We were huge spenders on eating out. Even after we “cut down” in 2012, we were spending over $2000 a year. It’s such a huge waste of money. Now we spend closer to $50 a month for our family of six on eating out, and our pocketbook is much happier. 🙂
My father was a smoker and a gambler, and our finances are going nowhere. I really hope he can stop doing his bad habits, I will recommend this for him to read. By the way, thank you for sharing this.
That’s completely true, gambling and smoking can easily ruin all your budget in a blink of an eye and not helping in any sense to advance in life.