When it comes to your finances, it is imperative that you be more strategic with your spending. The truth of the matter is that financial freedom doesn’t come easy. Just because you have large expenses does not mean you cannot save a good portion of your salary for your future. By learning your own particular spending habits, you will be able to accumulate the necessary wealth for a long and fruitful future.
If you are looking for improving your personal financial health, start off by evaluating your own spending habits. Evaluating your expenses with an open minded view will help clarify what is holding you back from financial success. Below, I have highlighted five particular spending habits that we have all encountered over time. If you are looking to buy a house or plan a trip to Madrid, it is vital that you start controlling your spending today.
The Real Cost of Happy Hours
Social happy hours may seem harmless. But in the grand scheme of things, these particular outings do add up. To help you take control of your financial spending, make sure you are aware of the overall cost this habit can have on a monthly basis. Outings such as lunch with coworkers or happy hours with friends can be incredibly expensive. To help prevent this, try and limit yourself from going out throughout the week. On average, people spend about $20 dollars a day on these particular social events. That comes out to $400 dollars a month, money that could be used to pay off your bills or to add into your retirement account. Once you understand the extreme ramifications of your spending, you will be more than likely to save for your future.
Stop Dining Out!
Similar to happy hour, dining out and expensive hobbies can take a toll on your savings. Let’s start off with dining out. I mean, do not get me wrong, who doesn’t love going out to dinner with your significant other and your friends. The only problem is that those nights are incredibly costly. Usually, restaurants will charge on average three times their food cost on what you are actually served. One option that can help resist the urge is by staying in and cooking instead. If you can cut back on dining out, this can absolutely impact the amount of money you can save yourself each and every month
The Membership Fees
Unlike college, group activities are separate expenses in your life. Take for example signing up for a membership at a wine of the month club or a private resort club. These dues and subscriptions can eat away at your hard earned cash. Even cheap subscriptions such as gym memberships can play a factor of what you could potentially be saving in the future. Now the problem with these memberships is that most are automatically debited from your bank account, so withdrawals can happen without you noticing. If it seems like these are just passive activities, try and decide if they are worth staying on. For most cases, it is better for you to just cancel that membership and utilize that extra money for something you actually enjoy.
Resist those Impulse Buys
Making expensive purchases on a whim can quickly diminish your savings. We have all been in that situation where we see something that catches our eyes and immediately have the impulse to buy. While satisfying as it may be, you must resist that temptation. To prevent this from happening, go into your stores with an overall inventory list of what you actually need. This will prevent you from loading your cart with unwanted buys.
Pay in Full
When it comes to credit card debt, it is important that you pay in full. Yes, there will be times where you cannot pay the full amount. But making only minimum payments on your credit card will be a disservice to you and your financial future. By paying the minimum amount, you are adding years to your payoff date. In addition, the interest compound increases making it almost impossible to get out of debt if this continues. Make sure you allocate your funds in paying off your debt. Yes, this will require a big sacrifice, especially for those social activities. But, it is also absolutely necessary to get you on track in building a healthier financial future.