When trying to save money and get your finances under control, a lot of PF bloggers recommends bringing lunch to work, quit smoking, booze, drugs and lattes. Although these pieces of advice make sense, there are other costly habits to look at.
- Convenience. Do you buy everything at the supermarket? Do you withdraw cash outside of your bank’s network? Do you buy items from convenience stores? If yes, you are wasting money. ATM fees in Canada are $ 3.00 on each withdrawal. Supermarkets charge a premium on produce and meat; convenience stores have a huge markup on snacks and drinks.
- Gym membership. In order to break even with your membership costs, you need to use it several times a week. Most people don’t. You are better off running in the park and buying some basic equipment to use at home. Gyms make the most money with absentees and add-ons.
- Outsourcing. Do you pay people to do things for you? Do you have a cleaning lady or a dog walker? Do you take your clothes to the dry-cleaner instead of washing and ironing them? Although there are instances when it is better to hire a professional, systematically outsourcing has the same price tag as convenience. My hairdresser used to colour my hair. Once I started doing it myself, I divided my hair care costs by 2.
- Lottery tickets. In BC, the odds of winning lotto 6/49 are 1 in 14 million. Enough said.
- Impulse purchase. This habit is the costliest and hardest to break. We are all guilty of it. Marketers and advertisers are very good at making us buy stuff we don’t need. To break the cycle, it is important to monitor your urges and identify your spending triggers. Ask yourself why you want to buy an item; if it is something you need vs. something you just want. Give yourself 24 hours before buying anything. If you cannot resist buying, avoid the malls and online shopping sites altogether. It is not easy, but it can be done!
There are definitely lots of habits that could be added to this list, but these are pretty common. What are your costly habits?
I think you can add “procrastination” to the list. It is the biggest killer! How many people lose money by putting off things they should do, e.g. register for group RRSP and get matching contributions from their employer?