Money Pits To Avoid: These 6 Weekly Spending Habits Will Drain Your Savings
We’ve all fallen into money pits at one time or another. Whether we’re mindlessly shopping online or signing up for a new subscription — many of these weekly spending habits can end up draining our savings.
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Without monitoring your expenses, it’s easy to overspend, which can lead to a snowball effect of financial stress. “One of the most common ways I see clients get into financial trouble is through unnecessary spending that drags their budget down,” said Leslie Tayne, a debt-relief attorney at Tayne Law Group.
Regularly reviewing your spending habits, on the other hand, gives you a better understanding of where your money is going. This awareness can also help you make more informed financial decisions and stay within your budget goals. Here are some poor spending habits to be on the lookout for.
Impulse Shopping
Making unplanned purchases on a regular basis can quickly eat into your savings. A lot of impulse shopping is triggered by emotions like feeling stressed, bored, excited or as a way to cope with sad emotions. You might even shop as a way to reward yourself as a treat, but this can backfire as emotional spending hurts your savings.
One survey found that 62% of respondents said they feel happy after an impulse buy. It also found that two-thirds of impulse shopping takes place while in bed using smartphones.
To avoid this money trap, try implementing the “24-hour rule.” When you feel the urge to make an impulsive purchase, wait for at least 24 hours before buying. This delay can give you time to consider whether it’s really necessary or not.
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Eating Out Frequently
Dining out, ordering takeout, or grabbing coffee and snacks on a daily basis can be an expensive weekly habit. When you dine out a lot, you’re more likely to make impulsive spending decisions like ordering appetizers, drinks, or desserts — all of which can significantly increase your bill compared to eating at home.
To avoid draining your savings, consider creating a budget that includes a reasonable amount for dining out expenses. You can also opt for cooking at home more often, planning your meals regularly, and reducing your restaurant visits to only special occasions. These strategies can help you save money, eat healthier and work toward your financial goals more effectively.
Signing Up for Too Many Subscriptions
Subscribing to multiple streaming services, magazines or other monthly subscriptions can slowly start to creep up. These recurring monthly or annual fees, when combined, can add up to a significant amount of money over time. If you have multiple subscriptions, each one contributes to your savings depleting.
To avoid this pitfall, make sure to regularly review your subscriptions and cancel the ones you no longer use or need. Also try to include subscription costs in your budget and set a limit on how much you’re willing to spend on them each month.
Racking Up Excessive Entertainment Expenses
Going to movies, concerts or other entertainment events every week can be costly. When you’re using up a significant portion of your income on entertainment, you have less to put toward your financial goals like an emergency fund, retirement savings or paying off debt.
Instead, try looking for free or low-cost options as well as discounts, coupons and special offers to reduce these expenses. You can also find membership deals, group discounts or even use loyalty programs to help save you money.
Making Minimum Credit Card Payments
“High-interest debt quickly compounds and can get out of control,” says Tayne.
Instead of letting it swallow up your savings, consider her advice: “If the interest rate is in the double digits, it might be a good idea to pay more than the minimum to eliminate overall debt more quickly.” The opportunity cost of paying high interest is that you miss out on growing your emergency fund or investing in other opportunities.
Buying Only Brand-Name Products
We all have our favorite brands, but they often end up costing us more. Brand-name products can come with a premium price tag, requiring you to pay more for a product simply because it carries a well-known label.
This means you’re spending way more for the same or similar quality as generic or store-brand alternatives. Consistently choosing these brand-name products on a weekly basis, effectively reduces your purchasing power where you end up buying fewer items with the same amount of money.
Instead of blindly opting for brand names, prioritize value for your money. Research products, read reviews and make informed purchasing decisions when you shop. By being more mindful of the above spending habits and making conscious choices, you can protect your savings and maintain a more balanced approach to your finances.
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This article originally appeared on GOBankingRates.com: Money Pits To Avoid: These 6 Weekly Spending Habits Will Drain Your Savings
