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Tuesday Tips

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TUESDAY TIP: IDENTIFY BAD SPENDING HABITS

by Joe of Talking Cents 

Identify Bad Spending Habits choose to spend money affects your ability to generate savings or eliminate credit card debt. Poor spending choices can result in increased debt or an inability to pay off what you already owe. Sometimes we have bad spending habits that we don’t even notice. If we identify spending weaknesses, then we can get those negative tendencies in check to get out of debt quicker.

 

How to Identify Bad Spending Habits

When it comes to our financial behavior, any unnecessary spending that occurs on a regular basis could be considered a bad spending habit. Some bad spending habits are obvious because they coincide with our other less desirable actions. Smoking, for example, is unhealthy, unproductive, and can cost almost $3000 a year by smoking a pack per day. Limiting or dropping these habits completely is the best debt reduction tactic there is.

Other bad spending habits are less easy to identify because the negative behavior is not as evident. Finding ways to curb these tendencies requires taking a closer look at our daily routine.

Commonly Overlooked Spending Weaknesses:

Unused Utilities – Leaving lights on, letting water run, and having inactive appliances plugged in all the time can all add up to an unnecessarily high monthly utility bill.

Daily Deals Shopping – Many of us fall victim to the idea that the special offers we receive via email are a way to save while we spend. This type of compulsive spending on items we don’t really need makes it harder to eliminate credit card debt.

Dining Out – We’re all entitled to a nice restaurant meal from time to time, but if you’re buying lunch at work every day, consider making your own meals or using leftovers to cut down on daily food costs.

Commuting – Gas prices go up and down, but if you try biking, carpooling, or using public transportation for work and other trips around town, you can avoid those extra visits to the pump.

Brand Loyalty – Generic brands don’t look as nice on the outside, but what’s inside the package is usually identical to name brand products. Switching to generics is an easy way to reduce spending.

Keeping up With the Joneses – This particular habit can be especially troublesome if you’re trying to eliminate debt. It’s easy to falsely justify why we “need” the latest gadget, the bigger TV, or the top-of-the-line appliance. Postponing a purchase until the savings are there, buying used, or going without all together can go a long way to avoiding excessive spending.

Are Your Habits Hurting?

There are many habits not listed above which could adversely affect spending behavior. Whether or not your spending habits are bad depends entirely on your situation and your awareness. If you can keep your spending in check and don’t rely on credit cards to satisfy urges, then just cutting back a little more could still help to reduce debts quicker. If you’re struggling to manage credit card debt, then it is critical that you break your bad habits as soon as possible.