The solution to saving more money isn’t always earning more money. Saving your hard-earned money is only half the equation.
In a world of one-click shopping and online storefronts open 24-7, it’s easy to fall into spending traps that could prevent you from reaching your financial goals.
Lean how to manage your household budget better by avoiding these 8 money-draining habits and focusing instead on getting money gains.
Money drain: #1: Avoid Impulse buys
From online flash sales to eye-catching items at the checkout line, unplanned spending can drain your savings at an alarming rate. A recent Slickdeals survey found Americans spend an average of $151 per month on impulse buys. That’s more than $1,800 per year.
Money gain: Curb impulse buys by limiting your trips to the store and reducing time spent browsing online retailers. Avoid shopping when you’re feeling tired, hungry or stressed and are more prone to give in to impulse buys. As an extra barrier to online splurges, delete autosaved credit card information so it must be manually typed in each time you make a purchase. Hold yourself to a waiting period — perhaps 24 hours, 48 hours or even a week — to see if you still want the item.
Money drain #2: Not planning ahead
If you’ve ever paid a premium for a book at the airport or a plastic water bottle at a sporting event, you know that a lack of planning can be a major money drain.
Money gain: Anticipate future needs by flipping ahead on your calendar for upcoming celebrations, outings and travel. Determine any items that should be purchased in advance. Buy clothing and seasonal items ahead of time when retailers are clearing out inventory at the end of each season. Always have snacks and a water bottle on hand to avoid overpaying for on the go. Ship gifts and online items well in advance to avoid expedited shipping charges.
Money drain: #3: Too many unhealthy habits
Habits that aren’t serving your physical or mental health are also likely taking a toll on your financial health. Even if there’s no immediate monetary cost, harmful health habits could hike up your healthcare costs down the road. And healthcare is a significant chunk of the family budget, comprising 8% of household expenditures in 2023, according to the U.S. Bureau of Labor Statistics.
Money gain: Trade in unhealthy habits — and the associated money spent on them — to develop new healthy interests and work toward long-term health and financial goals. Reduce your waistline and your grocery bill by buying smaller but leaner cuts of meat and buying produce in season when it’s freshest and least expensive. Bring your lunch to work a few days a week or skip the sugar-laden latte or super-sized soda.
Money drain #4: Paying too much in interest
Making minimum credit card payments when you can afford more is similar to pouring money down the drain. That’s because most credit cards charge high interest rates if you don’t pay off your balance in full each month. Payday loans will cause your money to circle the drain even faster.
Money gain: Chip away at monthly credit card debt by paying a modest amount to your monthly minimum. Paying a little bit more can add up to thousands of dollars in interest savings. Paying down excess debt can also help boost your credit score, saving you money in the form of lower interest rates on future loans.
Money drain #5: Wasting energy
Is your money silently slipping away through drafty doors and windows and a poorly insulated attic? Air leaks, inadequate insulation and overheating or overcooling your house are a waste of energy and money.
Money gain: You can save as much as 10% per year on heating and cooling by adjusting your thermostat by 7-10 degrees for eight hours a day, according to the U.S. Department of Energy. Additionally, weatherstripping your doors and changing filters regularly will also help keep utility costs to a minimum and help save you money.
Money drain #6: Being underinsured or overinsured
Not being properly insured can devastate you financially in the event of a fire, car accident, medical emergency, or other adverse event. On the flip side, paying for redundant or unnecessary insurance coverage can also drain your finances. For example, your travel credit card may provide some travel insurance coverage and your auto insurance may cover a rental car.
Money gain: Review your insurance coverage regularly and comparison shop for the best deals. Make sure your policies are up to date and reflect your current needs.
Money drain #7: Chasing trends
Keeping up with the latest fads is a never-ending pursuit that will likely leave you unsatisfied and perpetually cash poor. For high-cost items, like home improvements, you could still be paying them off long after they fall out of fashion.
Money gain: Focus on function over fashion. Are you replacing something that’s in good condition simply because it appears outdated? When it’s time to make new purchases, honor your personal tastes over fleeting fads.
Money drain #8: Unused subscriptions and memberships
In the age of streaming services and monthly memberships, revolving subscription charges can sneak into your monthly credit card bill and accumulate over time.
It’s easy to fritter away $20 here and $50 there, to a point where you can’t remember where your spare cash went. Putting a plug in these subscription and membership money drains can pave the way to reach meaningful, longer-term financial goals.
Money gain: Evaluate whether your monthly subscriptions are offering value equal to what you pay for them. Cancel memberships or subscriptions that you don’t use or can do without.
Work toward achieving your financial goals
Whether you dream of traveling to a particular destination or outfitting the backyard with a new patio, here are three steps to help achieve a financial goal:
● Make a budget plan. Rather than setting one daunting goal, create a series of smaller steps to reach your financial goal.
● Write down your goals. Put them in a prominent place, like the refrigerator or your desk, where you’ll see them frequently.
● Automate your financial goals. To maximize your odds for budgeting success, arrange to have some money automatically deposited into your savings account each time you get paid.
Zions Bank can help you take control of your finances and stop wasteful financial habits. Stop by your local Zions Bank branch to speak with one of our experienced bankers.
