We all want to become master of our money instead of being a slave to our habits, but let’s admit – we all give in to a lot of temptations. These temptations may seem fine at that moment because they’re relatively small, however, if you add them all together, chances are, you’re going to find yourself guilty of wasting a significant amount of your hard earned money.
In this post, we’ll explore 15 common money-wasting moves and share the secret of avoiding these mistakes. Some tips need expenditure cuts, and other tips involve grabbing the money on the table that you didn’t realize was there!
#1 Using only one bank account for all expenditures
Money management can get tricky if you carry out all expenditures from one checking account, as often we cannot trace what’s gone where. To avoid muddling up finances, open a second account. You can allocate a fraction of your income in one account to cover all the basic expenses like rent and bills and another fraction for spending over leisure.
#2 Reserve Management
If there is one thing that stresses us all, it is our fear of drowning in debt repayments if we’re run out of our salary. Getting out of debt involves sustained disciplined spending. You can even get credit counselling to get personalized lending options. This may involve refinancing or debt consolidation which can save the interest cost that you may lose.
If you’re looking for a salary advance, check out EarlySalary – India’s first advance salary service featuring instant approvals, direct transfer to your bank account (or even e-commerce wallets), and low fees. It’s a fairly neat way to avoid high-interest debt.
#3 High insurance premiums
Many of us shell out huge chunks of our monthly pays on insurance premiums. Because, just like other essentials, we need insurance, right? Sure we do, but the insurance market is a crowded one, so it is important to find the policy that best suits you. Tax deductions and credits that you do not claim is money wasted. Take a professional’s help, compare policies & maximize your tax savings.
#4 Overspending on monthly bills and overdue
Our lives are busier than ever and among the many things that we often miss out on is the monthly payments on them. Neglecting some payments like irregular credit card bill payments may cost significant late fee charges and even downgrade your credit scores. Consider automatic payments to avoid such situations or you may even set reminders.
#5 Credit Card Fees
Many card users extend their spending limit and pay for it even if their expenditures never reach those limits. Do not use credit cards which have monthly or annual membership fees unless there is a worthy rewards program that can make up the difference, whether in terms of cash back, airline miles, or other rewards.
#6 Poor Investment
All that shines is not gold and the same is true for investment. Investment in the wrong policies can eat into your overall gains, and when you compound that over 30–40 years, your savings can even go south. You miss on the power of compounding returns if you keep it idle. However, it is critical to do some thorough research before putting money in any policy. If you cannot do that yourself, take professional help and identify the right time to invest.
#7 Impulsive Shopping
Marketing tactics are there to lure you into buying stuff that you do not need. To avoid getting tricked, plan your spendings, carry cash instead of cards and most importantly – think twice before making any purchase. If you do need some money for important purchases though – remember when we said EarlySalary even transfers to your e-commerce wallets? Check it out here.
#8 Electronic Luxuries
We all love to swank our electronic luxuries like latest phones, paid apps, digital subscriptions, etc. but sometimes this love for gadgets goes overboard and we end up regretting when we don’t use them. To avoid this, learn to resist urges and beware of free trial offers because if you forget to cancel in time, you could be wasting money for nothing.
#9 Brand Obsessions
If you’ve got a bunch of clothes collecting dust in your attic, you are guilty of wasting money on brands and fashion fads. Remember that quality clothes in classic designs reduce your clothes’ average price.
#10 Extended Warranties
Everytime you buy an electronic device, retailers go all out & hard sell you extended warranties at inflated costs. It is better to do review whether it is even needed because mostly buying a used or new replacement for your item, or repairing it is cheaper.
#11 Grocery shopping
How many times do you end up throwing extra food? Delayed shopping & shopping with time constraints can help you cut costs of those extra items by getting you into a habit of buying more appropriately to fit your needs.
#12 Spending for the sake of coupons
If consumers think they are smart, marketers and retailers are smarter. They often trap buyers into overspending to avail of cashbacks/ coupons or gifts. It is important to compare and evaluate purchases to avoid being tricked.
#13 Wasting money on Dine-outs
If on an average you are spending 50 bucks per week on takeaways or dine-outs, it adds up 26,000 bucks in 10 years. Homemade food is not only cheaper but also a lot healthier.
#14 Smoking/ Drinking
An average smoker spends $2,292 (or about Rs 1.5L) per year and you may be shocked to find the price tag of the diseases that will follow. You are not losing days from this valuable life but also your hard-earned earnings. So stop before it’s too late.
#15 Indiscriminate use of gas
Many drivers fall for pricey premium fuel when their vehicle needs regular fuel. Opt for carpool, switch to fuel-efficient vehicle, consider walking or biking & maintain your vehicle to reduce fuel costs.
To conclude, use your wisdom, compare costs and most importantly learn to differentiate between needs and wants if you want to stop wasting money.