5 Spending Habits That Will Keep You Poor
Does it ever feel like you’re spending money without thinking about it, and suddenly you’re looking at your finances and having no idea where your money is going? You, like almost everyone, might have developed some bad spending habits throughout your life with no idea how to break them.
Spending habits can be hard to break, but there are ways to identify them and be more mindful of your money and these habits. Hopefully, you can create new and better spending habits with just a little extra attention to what you spend your money on.
If you have financial goals that seem to always be out of reach, here is a list of 5 possible spending habits that will keep you poor, along with some ways to change these habits for the better.
- Excessively Eating Out
Sometimes, life gets busy. With that, it can be hard to find the time to make a meal, so you might turn to ordering takeout or fast food. It’s convenient and easy, but the costs can add up quickly. Buying a meal at a restaurant nowadays is going to cost you between $15-25, while making a meal at home can cost as little as a few dollars.
Making food at home might take more time and effort, but there are plenty of ways to cut down on the time you spend in the kitchen. Meal planning is rising in popularity, and by doing a bit of research online, there are lots of resources that can help you plan your eating habits to save both money and time.
Of course, there’s no problem with the occasional eating out, whether you’re celebrating a special occasion or catching up with friends. But if you work on keeping this type of spending to a minimum, it can make these occasions feel all the more special.
- Online Browsing
Nowadays, online shopping is the norm. You can do it anywhere, as long as you have a phone and internet connection. This can make it tempting to browse in your downtime, even if you might not be looking for something in particular.
The costs of online shopping can sneak up on you, with added shipping costs and the convenience that comes with not having to leave your house to buy something. These costs can add up over time, leading to a big bill on your credit card at the end of the month.
Online shopping has its uses and perks, but by trying to be more aware of your browsing, you can cut down on excessive spending. Try only shopping online when you have a specific need in mind.
- Unused Subscriptions
With automatic and electronic payment methods, sometimes you can lose track of all your subscriptions. It might be a good idea to go through your banking information and make note of what kinds of subscriptions you have. From there, you can see how much you actually use those services and consider unsubscribing.
Even if it’s just a few dollars a month, that money could go towards something more useful in the long term.
- Not Making Payments on Time
Interest on monthly payments can add up quickly, especially on credit cards. If you miss a payment, costs will only add up, putting more strain on your future self’s finances.
When it comes to credit card debt with high interest rates, one way that you can avoid excess interest charges is to only use your credit cards when you know for sure that you can pay off within a one or two payments. This way, you’re not paying unnecessary interest. You can try setting up some reminders to make payments in your calendar, or look into automatic payments.
It’s super important to stay on top of your debt payments and loans, since the longer you stay in debt, the more you’ll have to pay in interest, leading to you losing more money over time.
To take this a step further, you can try paying more than the minimum payment on each bill. If you have the means to do so, it can make a difference in how long it will take you to pay off your debt.
- Not Budgeting
Everyone should try to have a simple budget that they use in their day-to-day life. Budgeting is a great way to gain a better understanding on how you spend your money each month. Without a simple budget, you’re leaving yourself blind to how your money is being spent. It’s much harder to cut back on excessive spending if you don’t know where your money is going.
It can be intimidating to look at your finances, but it’s much better to spend money when you know how it will impact your finances, rather than just blindly spending.
Having a simple budget that you try to stick to every month is a great way to stop other bad spending habits like the ones listed here. If you keep track of how much you’re spending on takeout and online purchases, you can see exactly what you need to do to cut down on spending, without just blindly guessing.
If you find certain areas in your budget that you’re spending too much on and work to cut back, that extra money can go towards your savings or a bigger purchase.
Breaking Spending Habits Isn’t Always Easy, But it is Possible
The only way you’re going to be able to break those habits that are keeping you from reaching your financial goals is by:
- Knowing what those habits look like: You can do this by making a budget and seeing where you might be overspending. Attentive financial management is very important.
- Understanding why you developed those habits: Look at your day to day life – for example, how does your time management impact how you spend money?
- Finding realistic solutions to save money: You need to find solutions that are reasonable for you to meet. Start small, and over time you’ll start to see your finances improve. Living within your means can make a huge difference with time and commitment.
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Here at Chase and Associates, we have helped many Canadians gain control of their financial lives with confidence and dignity. Here’s what just one of our past clients said:
“I am overwhelmed with gratitude for Chase and associates. You’re all changing peoples’ lives, not only in overall financial health aspects but also in mental and physical health as well.”
Contact us today for a consultation and take control of your financial life.