Are you like me? Are you always thinking of ways to save money? Do you panic at the thought of overspending on dumb stuff? I am certainly capable of overthinking my spending habits and the results are sometimes hilarious and sometimes they are just plan sad. Like a dog without a bone, I continue to search for the better ways to save. Over the years, I have come across a lot of extreme ways to save money that are not worth it. Heck, I have used a few myself. Here are five of those practices that need to go away.
1. One Form of Entertainment
“I must have cable because it is my only form of entertainment.” This is a repeated sentence I have heard many times over the years. I do not recommend that everyone go out and cancel their cable or streaming services, but “only entertainment”. Yes, you are not out spending money when you are binge watching the Bachelor all weekend, but it is still too great a price to pay. These things are a tremendous time suck and limit your days. Also, because you tend to just sit there when you stare at screens mindlessly, your body suffers. Get outside. Take a walk. Even in the winter, there are plenty of outside activities you can take up and your body will thank you because your health is your most valuable asset.
2. Canceling Your Gym Membership
Sure you don’t utilize your gym membership but maybe you should consider using it rather than cancelling it. After all your health is not a place to skimp and save money. A rich man without his health still has a poor quality of life. For some of us, we need a gym environment to inspire us to work on our health. That membership is motivation and not worth the budget savings when cut.
3. Giving Up Your Cup of Joe
Does that mean that you should go to Starbucks every day? No. No it does not. Make your coffee at home but don’t skimp on the coffee that you brew and do spend money on a quality coffee maker. The stores are full of good quality coffee that you can brew at home because you deserve it. Also in a closely related item, buy a soda stream or some other brand device to bubble your water. I recently purchased a soda stream and have been surprised by how much I like it. It is fast and easy and with a little flavoring added to my bubbly water, it tastes store bought. Though it isn’t store brand, it will pay for itself in no time and zero calories!
4. Opening a Store Credit Card to Save
This little gem has been around for a long time. It is a trap! The cashier will ask, “Would you like to save 10% on your purchase today?” Of course, I would like to save 10% because we all do. Of course you will need to open a credit card. You need to use the account to make the purchase and boom the trap is sprung! Once your account is open, they will make that 10% back and much much more. Say no to this “savings”, pay your bill and head out the door without creating yet another bill to pay.
5. Not Contributing to a 401k or Other Retirement Accounts.
This is especially true if your employer matches 401k contributions. You must contribute at the least the percent your employer will match because if you do not, you are turning down money from your employer. Do not turn down money from your employer! A living wage in retirement requires that you contribute to your retirement plan now. If you don’t have a retirement plan, open an account now.
Finally, do not horde savings and continue to carry over balances on credit cards. This may sound crazy to some of you, but I have seen it before. People look at their savings as a crutch and refuse to use it to pay down high interest debt. If you have credit card balances, you need an emergency savings of $500-$1000 in your savings account. Anything beyond that needs to be put toward paying down debt.
If you need help on where to save and where to spend to get the most out of your income, we are here to help. A certified Financial Specialist can answer questions and help you get the most out of your money.