You may not be aware of it, but little financial vampires are always robbing your bank account. Fortunately, you won’t need garlic or a wooden stake to fix them, and they’re easier to stop than a real vampire.
You can get your budget back on track by recognizing and getting rid of typical money wasters. In this article, we’ll discuss the top eight money-saving tips to help you adjust your expenditures, and stop to waste money.
Why Do You Waste Money? Signs of a Spending Problem
Recognizing that you have a problem with your spending is the first step to taking control of it. A spending problem can show some of the following signs:
- You’re getting deeper and deeper into debt.
- You spend more than you make at the end of the month and eventually run out of money.
- Shopping gives you happiness.
- Your emergency fund is small or nonexistent.
- You either pay your bills late or not at all.
- Your overall debt exceeds your total assets, resulting in a negative net worth.
- More than one-third of your take-home salary goes toward your monthly rent or mortgage.
Top 8 Ways to Stop Wasting Money Today
If you wait for the “right time”, it will never come. Now is the ideal time to begin saving. Here are the top eight ways to get your budget back on track.
1. Keep an Eye on Your Expenses
Calculating your current spending is the very first step to stopping wasting money. Keep track of every dollar you spend, including regular monthly payments and purchases for food, and other necessities for the home. Record your expenses in whatever method works best for you, whether it’s with a simple spreadsheet or a free online spending app or tracker.
Once you have your statistics, group the figures into categories like food, petrol, mortgage, and total each amount. Make sure you’ve included everything by checking your credit card and bank statements.
2. Avoid Buying Items That Are On Sale
Retailers use a common strategy to trick customers into making purchases: offering a discount. When they put up a huge 50% discount banner, people immediately start buying things they’d never consider purchasing otherwise! This strategy is effective because it creates a sense of urgency (more here).
Avoid this scam by ignoring the prior sale price entirely and basing your decision on the item’s current value to you. Never pay $50 for something you won’t use just because it was originally $100. That is a waste of money.
If a product you need or have wanted for a while is on sale, the cost is reasonable. Buy it. Otherwise, say goodbye.
3. Bank Charges
Small expenses can add up to a large sum of money wasted over time, whether you pay fees to use an ATM or a monthly service fee just to have a checking account.
According to a Bankrate poll, the average monthly charge for non-interest checking accounts (aside from free checking accounts) was a little over $5 last year, while the fee for interest-bearing checking accounts was over $16 for individuals who didn’t qualify to waive the fee.
Switch banks to reduce waste. According to Bankrate, almost half of checking accounts have no monthly maintenance costs at all. If you can’t avoid monthly fees with your existing bank, the cost of those fees will probably be greater than the interest you are currently receiving on that account.
4. Put All Windfalls Into A Savings Account
Even if you’re too old to get cash from family members for birthdays, you can still get unexpected cash. The personal finance website RichMiser.com is owned by Miami-based attorney Miguel Suro and his wife, Lily Rodriguez. Miguel Suro suggests creating a separate savings account specifically for unexpected cash.
Suro suggests “depositing all unforeseen income there that could be things like product recall refunds, settlements from class actions, refunds you receive when returning something, or cash from gifts. It includes all the money that you didn’t plan for or count on”.
Remember to include in any employer bonuses. According to Suro, you can use the unexpected money for a specific purpose, treat yourself to something later, or for an emergency fund.
5. Avoid Dining Outside
People have started eating out more since pandemic restrictions have eased, which is understandable. However, you might be shocked to learn how frequently you’ve been eating out.
According to Michelle Petrowski, a CFP in Anthem, Arizona, “Many people say, we go out a couple of times a month. They are always shocked when we sum up all those sources for that expenditure category — including takeout, Uber Eats, trips at Circle K, and Starbucks — and come up with a monthly number”.
However, since dining out may be one of the biggest financial drains, we advise saving it for only special occasions. If you prefer dining out and can’t bear the thought of giving it up, check to see if there are any food deals in your area.
6. Cancel Any Subscriptions You Aren’t Using
If you really struggle to pay your bills each month, you should ask yourself whether this is a luxury or a necessity.
Did you never go to the gym or watch a streaming service despite having a subscription?
Co-founder and marketing director of CocoFinder, Harriet Chan, claims she keeps track of her membership costs and cancels any she doesn’t frequently use to save money. For instance, she decided to stop going to the gym and began exercising online for free.
Moreover, there are many free local resources, such as BBC iPlayer where you can watch for free.
7. Check Your Insurance Rates
Call your car insurance provider, advises the “Yo Quiero Dinero” podcast host. According to Torres-Rodriguez, your auto insurance’s cost is determined by how many miles you drive each year. However, “a lot of us aren’t driving right now”.
Call your auto insurance company now to reduce the estimated miles you’ll be traveling this year. You might see an immediate increase in your savings.
8. Sell Everything That Doesn’t Make You Happy
Sell the items in your home that you no longer require and are willing to let go of for the benefit of your financial future. The old chair your aunt gave you? Sell it. That antique shop crystal vase you discovered? Sell it.
How much clutter you have in your house (that you don’t even use or consider) may surprise you. And the money you can make from selling those can mean the difference between living paycheck to paycheck or not.
Final Words About How to Stop to Waste Money
Stopping excessive spending could be the beginning of a new financial future for you and your family. While stopping to waste money in the short run may be difficult, keep in mind that overspending is a result of habits you develop today. You’ll be well on your way to minimizing your spending and securing the future you want if you can successfully identify any patterns that might be keeping you from reaching your financial goals.