Managing your finances is one of the most important things to do as an adult. Even if you are usually cautious with how you spend your money, expenses can add up without you realizing it. We have researched various online forums to create a list of 12 weekly spending habits that may drain your wallet.
Spending Without Budgeting
One of the most fundamental reasons you may spend more money than you realize is not budgeting. Planning a weekly or monthly budget and sticking to it is critical to maintaining financial health. A survey found that 80% of Americans budgeted their money, with most of them claiming it helped them stay out of debt or avoid going into debt.
Not Comparing Prices
When buying a product, it’s important to compare prices across different stores or online platforms. Failing to do so means you’re likely missing out on the lowest possible price. This is especially true for online shopping, where prices may vary between different e-commerce websites based on their algorithms. If you only shop from one site, you might miss discounts on a competing website.
Subscription Services
Subscription services have become increasingly common in recent times. For almost any online service, a person has to subscribe for a monthly fee instead of a one-time payment. Many consumers have different subscription services, from streaming sites like Netflix and Spotify to Creative Apps like Adobe Creative Cloud. The average American reportedly has 4.5 subscriptions, paying over $900 annually. You can save by finding cheaper or free alternatives and limiting your monthly subscriptions.
Ride Apps for Transportation
While ride apps like Uber and Lyft may be convenient, they’re much more expensive than public transportation. City subways and buses are relatively safe, easy, and cheap. Sometimes, it’s better to use a ride app, like at night or in an unfamiliar location. However, if you make it a habit to use public transit often, you’ll save a lot more money.
Brand Loyalty
Loyalty to a particular brand is common, but defaulting to it for all your purchases may only sometimes be the best idea, primarily if the brand is known for premium products. Sticking to a premium brand because you like a few of its products can significantly drain your wallet. While it might make sense to buy certain high-quality items from that brand, like shoes that need to be durable, it’s not always the best scenario, as it can lead to overspending.
Cigarettes
It is an obvious inclusion but an important one nonetheless. Smoking cigarettes regularly not only harms your health significantly but can also become a costly habit. Making it a routine means you might end up smoking anywhere from a single cigarette to an entire pack daily. With the cost of an average cigarette pack ranging from $6 to $10 depending on where you live, smoking a pack a day can set you back a minimum of $2,000 a year. Quitting smoking is beneficial not only for your health but also for your wallet.
Exaggerated Use of Credit Cards
While using your credit card is convenient and easy, excessive use can significantly impact your wallet. Relying heavily on your credit card can result in overspending and paying higher interest charges. Despite the average credit card interest rate being 24.92%, the highest in the past five years, more people these days are carrying credit card debt month to month. Additionally, 36% of American adults have more credit card debt than emergency savings.
Utility Bills
Utility bills are a necessary expense for every household. However, people often pay more than required due to energy wastage and not adopting energy-efficient appliances. Americans spend about 10% of their yearly income on utility bills. Out of this, an estimated $200 to $400 is wasted from air leaks and outdated energy appliances. If you turn off unused lights and invest in energy-efficient upgrades, you can save a fair amount of money.
Neglecting Coupons or Loyalty Programs
Not making the extra effort and time to use coupons and loyalty programs can result in missing out on significant savings in the long run. While the amounts saved per purchase might seem small, they can add up to a large sum over time. Americans are often part of many loyalty programs. Studies show that customers actively use only about 45% of the programs they’re enrolled in.
Eating Out Frequently
Dining out can be enjoyable and a great way to spend quality time with friends and family. However, making it a regular habit can become expensive. The average American spends $166 per month dining out. That amounts to almost $2,000 annually. Cooking your meals might be tiring, but it’s a definite way to save money. Plus, home-cooked meals are often healthier and can be made to suit your own taste and dietary needs.
Impulse Buying
Impulse buying is another significant drain on finances. Impulse buying is the act of purchasing something you hadn’t initially planned for. People often fall for flash sales and limited-time offers, which trigger the desire to purchase items they don’t really need. The prospect of buying something at a discount often leads to unnecessary purchases. Americans spend $314 every month on impulse buys on an average, which totals more than $3500 annually.
Having a Daily Coffee
Starting your day with a coffee has become a popular and necessary routine for many people. While it may help you start your day on a more positive note, it can become an expensive habit. A daily coffee costing $3.50 adds up to almost $1,300 a year. While giving up coffee might not be an option for many, making your coffee at home can save you $300 to $700 annually, depending on your preferences.
