Can Bad Habits Drain My Wallet?
One of the quickest ways to see an increase in your bank account is by reducing your spending on nonessential items. It is outrageous how much people spend on unnecessary things every day. Overtime time, these costs accumulate into great sums of money. The key to improving bad spending habits is being more conscious about where your money is being spent and creating a frugal mentality. The 8 worst spending habits are listed below. Avoiding these as much as possible will help you build wealth at an accelerated rate.
What Are the Top 8 Bad Spending Habits
1. Eating out
Eating out frequently is an expensive habit that you can easily avoid. Many of us want quick, easy, and good-tasting food, so buying a meal from a restaurant is very tempting. However, this comes with a price. Meal prepping and buying sizeable amounts of discounted food items from your local grocery store and cooking at home is a great financial alternative.
2. Lottery Tickets
Purchasing lottery tickets should almost always be avoided. The idea of spending a little bit of money on the chance of making millions of dollars is very tempting. This is why so many people buy into it. In addition, some people may feel that winning the lottery is the only way to riches. Though, they fail to consider the reality of these types of games. For instance, winning the top prize on Powerball or Mega Million are 1 in 292.2 million and 1 in 302.6 million, respectively. The chances of winning big prizes are so slim that spending money on them is not justified. Consistently investing in the stock market is a great financial alternative to wasting money on the lottery.
3. Cigarettes or Drugs
Cigarettes or other drugs are not only damaging to your health, but they also cause damage to your wallet. Many people use cigarettes or other drugs as stress relievers or for enjoyment. Although, they don’t stop to think about how it is affecting them financially. The average cost for a pack of cigarettes across the United States (2020) is around $6.96. Moreover, many smokers can burn through a single pack a day. Let’s do some math, ($6.96 per pack x 365 days = $2,540.4 waisted). A great financial alternative to cigarette or drug use is exercising or meditation.
4. Expensive Car loans
Many people lock themselves into expensive long-term loans to have a new pristine car full of the latest technology. These monthly car payments can be detrimental to your budget and can be avoided. A great financial alternative to expensive car loans is buying an older used car with cash.
5. Bottled Water
Further, buying bottled water, although very convenient, can be expensive over time. A great financial alternative is buying a filtering system and a single reusable bottle and drink filtered tap water.
6. Expensive Coffee
Many people rely on coffee to get moving in the morning or stay motivated at work, but this doesn’t mean $5 Starbucks coffee is the only option. However, consuming caffeine stimulates the body, so many don’t want to give up the habit. Therefore, buying a coffeepot and making coffee at home is a great financial alternative.
7. Unused Subscriptions
A subscription is a standard payment method used by many companies, and the monthly expenses for users can stack up quickly. Some examples of subscriptions are apple music, Spotify Premium, Hulu Live, Netflix, Amazone Prime, a gym membership, etc. Moreover, your lack of awareness of subscriptions can be very costly, especially if they are utilized. A great financial alternative is checking your subscriptions relatively often and canceling unused accounts.
8. Credit Card Fees
The failure to properly manage credit cards can lead to tremendous fees and a poor credit score. Some examples of potential fees associated with credit cards are annual fees, late fees, balance transfer fees, finance charges, etc. Therefore, to avoid these unnecessary payments, a great financial alternative would be utilizing credit lines with fewer potential fees. In addition, understand how to handle borrowed money before applying for new cards.