Believe it or not, you can save more without having to earn more. Ultimately, it comes down to budgeting and managing your expenses. If you find that you don’t have any money put away for a rainy day, or that you live paycheck to paycheck with little to nothing left in your bank account at the end of the month, it may be time to make some changes. Here are six bad money habits to break that will allow you to save more.
Spending More Than You Earn
This bad money habit may seem pretty broad in scope, but it affects millions. It’s estimated that most Americans spend all, if not more, of their income each month – leaving them with nothing in the bank for emergency expenses. This bad spending habit also means that for many, the only way to get by month-to-month is by running up large credit card bills. Don’t make this mistake. To keep your spending in check, consider using budgeting apps like Mint or a simple budgeting calculator.
Eating Out at Restaurants All the Time
One of the reasons that so many Americans spend more than they earn is because they eat out constantly. Dining out is expensive, particularly if you make a regular habit of it. Simply by eating in, and buying and preparing your own groceries at home, you could save hundreds of dollars per month on expenses. This adds up to thousands of dollars in savings over the course of the year. So skip Taco Tuesdays and Friday Happy Hour, and eat in. Your wallet will thank you.
Failing to Keep Track of Your Bills
A key component of budgeting is keeping track of your bills. It’s impossible to properly manage your funds if you don’t have at least a general idea of what you owe each month. And remember, while some bills remain constant month-to-month, such as rent, others can vary with usage – a phone or water bill, for example. Going over your data each month can result in needless spending that is easily avoided with an unlimited data plan, such as T-Mobile’s ONE wireless plan. So review your monthly bills, tally up the totals, and see if there is any savings to be had.
Wasting Money on Unused Subscriptions
From gym memberships to streaming subscriptions that go unused (do you really need Netflix, Hulu, Amazon Prime, and HBO Go?), Americans spend thousands of dollars per year on subscription services that they don’t need. When budgeting, it’s important that you look at all sources of spending. Why? Because the easiest way to save money on a fixed income is to reduce your expenses. Consider this: if you spend $100 per month on streaming services and cable, over the course of a year, that equates to $1,200. If you spend $200 per month, that’s $2,400 per year. Would you like an extra $2,000 at the end of the year? If so, cut out the unused and unnecessary subscriptions.
Not Having Savings Goals
In order to save, it helps to set a savings goal. Not just for the year, but month-to-month as well. Would you like to set aside $50 per month? $150 per month? Knowing what amount you would like to save allows you to modify your budget accordingly to meet this goal. For example, if your income is fixed, yet you would like to set aside $100 per month for savings, then you know that you need to cut your expenses by at least $100. Without a clear picture in mind of what you would like to set aside, it’s easy to lose track of your finances – in which case, you will likely find that you haven’t set aside anything. Don’t make that mistake.
Trying to Keep Up with the Joneses
Finally, don’t succumb to the temptation to spend money that you don’t have simply to keep up appearances. Between Instagram and Facebook, you may be under the impression that your friends go on vacation and eat out at fine restaurants on a regular basis. And perhaps they do. If so, and they can afford it, good for them. What isn’t okay is getting yourself into financial ruin simply to keep pace with their lifestyle. Live your life, and address your needs – don’t worry about anyone else. While your friends may be living the high life, it’s also possible that they’re burdened with credit card debt. Consider this before splurging on something that you can’t afford – or shouldn’t buy.
Calvin F. says
Great tips, I only spend when I need, not when I want