Bad spending habits are everywhere. I shared my fair share of them as I progress towards bettering my financial situation. Every year, I always say the words, “I shouldn’t have spent money on that” without fail. There’s always something that you buy that isn’t a good sound purchase.
It’s OK to make these mistakes on a yearly basis. Everyone makes them, no matter how financially disciplined they are. Some people just buy too much groceries at one point and end up throwing a lot of things away. As long as you don’t make these mistakes in a very significant way, you should be well on your way.
Right now, as we speak, there are frozen strawberries sitting in my fridge that I bought in the year 2020. I haven’t thrown them out nor have I used it. It was when I was going through a smoothie phase and I made a smoothie with fresh fruit on a daily basis. Once that fad wore off, I was left with many fruits that I didn’t know what to do with.
Therefore, there are frozen fruits sitting in my freezer as I type this up. Everyone makes these mistakes. We all seem to waste money in one way or another and exhibit bad spending habits. Even though my mistake only set me back $10, that’s a lot of money on a compounded basis.
It’s certainly not a good rationale to continue making those choices. Spending money on things that you are going to end up throwing away is synonymous to throwing the money away in the trash can at the first try. That might even save you a step of going to the grocery store and wasting gas!
In seriousness, let’s try to stop wasting money together.
8 Bad Spending Habits to Avoid
One of the worst bad spending habits is not SMASHING that social share button and posting to your favorite social media! Your friends could absolutely benefit from this article a everyone wastes money at one point another. Even a personal finance blogger like me.
So let’s share this article to avoid making corporations richer than they already are.
So with that said, let’s get into the 8 bad spending habits for you to stop doing, today.
1) Impulse Purchases are Bad Spending Habits
Have you gone to Starbucks and seen those delicious croissant sandwiches right as you’re about to checkout? Or have you gone to your grocery store and seen those delicious single packaged candy bars staring right in your face? They’re begging you to buy them, and it’s only $1.49, so, it’s not a big deal anyway.
That’s a big impulse purchase that corporations KNOW you will get convinced by. They know that those are so enticing for you to purchase because it’s within arm’s length. The normal items at the store are hard for you to purchase because for 1. they’re not at arm’s length to buy and for 2. you don’t think you want it.
However, when you’re waiting in line and have no other choice but to stare at the products that are right in front of you, you have to consider buying it. That’s one of the most classic bad spending habits you can cut out today. By the time you get home, you regret purchasing it because the candy bar wasn’t as useful as you thought it was.
Limit your impulse purchases. $5 here and there adds up a LOT.
2) Not Having a Budget
You can’t know what your bad spending habits are if you don’t lay out your expenditures. I review my budget on a monthly basis, at a minimum. Track where your dollars are going because otherwise your dollars will leave on its own. Even little things like miscellaneous items should be included in your budget.
The big items that I use for my budget are rent, insurance, utilities, laundry, food, and the like. Then you can get more nuacned and personalize it more depending on what your specific situation is. When you don’t track what you’re spending on, your for sure going to spend on bad things.
It’s human nature to do things that aren’t good for us. For some reason, we don’t like eating vegetables, we still smoke even after knowing the health risks, and eat an overconsumption of sugar even though it’s bad for us. If somethin gis bad for us, we like it.
Therefore, if we don’t restrain ourselves from ourselves, we can’t help it but spend money on things that don’t add real value to our lives. Our feelings and brains are a curse against us. You are your own worst enemy.
3) It’s a Bad Spending Habit to Purchase Novelties
When you go to Disneyland or Disneyworld, don’t you just want to buy that Goofy plush doll? Or buy a snow globe that memorializes your experience? While it’s great if you actually keep it and treasure those memories, it’s not great if you don’t actually use those things to cherish your memories.
When I buy a novelty like that, I ended up throwing those things away by now. The memories that made the biggest impact to me, I actaully still remember. From the top of my head without an outside reminder. All of the visual aids like a snow globe all ended up in the trash within five years of having them.
Therefore, truly evaluate if you actually need or use the novelties and gift shop items. It’s more than likely not that useful in helping you take a trip down memory lane. If it doesn’t do anything to better your life, then it’s one of the bad spending habits you have to kick to the curb.
4) Gambling
Remember when I asked, “did you lose money gambling?” I know because I’ve been there. What’s more interesting is that society, by now, knows that the odds are obscenely stacked against us in gambling. Every news articles talks about it and the casinos themselves admit it.
Yet, even after knowing this information, people choose to go to the casinos anyway. It’s mind boggling. One of the biggest recovery industries since the COVID-19 pandemic began actually is the gambling industry. They were on track to break $44B in revenue record in 2021.
You know how people talk about how the system is stacked against us in life through laws that make upward mobility difficult? Well the gambling industry is one industry that is completely open and honest about their edge against you. Yet people willingly walk into the casino and bet their hard earned cash, anyway.
Don’t be one of those people. Gambling is one of the worst bad spending habits you can get into because it is highly addictive.
5) “30% off” Signs Entice You Too Much
Here’s a novel idea. Instead of saving 30%, why not save 100% of your money and not purchase anything in the first place? The sales signs are very good at tricking you into thinking you got a better deal than you actually did. They did an experiement. One item sold for “$15” and the other item sold for “$30 but 50% off to make it $15”.
The latter sold better than the former. The 30% sales signs are just trying to make you think that you got a better deal. When you actually didn’t. Excessive shopping for sales is one of the bad spending habits to break today. Having $15 and no product is oftentimes better than having $0 and the $15 product.
Products are designed to be sold to make the company money, not you. Although there are exceptions, there are few products that would give you a value higher than $!5 if the product costs $15 for you. The extra profit is for the companies, not you. Therefore, don’t get trapped by the honey of the sales signs.
Instead, be strong and save and avoid these bad spending habits.
6) Bad Spending Habit to Eat Out Often
I get a celebratory dinner. When my net worth hit $400,000, I treated myself to a nice $20 brunch at Snooze. It was the most I ever spent for brunch. However, a $100,000 increase in net worth only happens once a year. Therefore, it was a special occasion that I was happy to shell out money for.
Eating out often is one of the bad spending habits to quit today. If you eat out once or twice a week, then that’s fine. However, if you do it too often, that’s when you run into trouble. People will spend $300 on groceries AND an additional $500 on eating out on a monthly basis. Just for themselves. That’s crazy!
Celebrate the big things in a good way by going out to a nice dinner or lunch. However, they should be the exception not the rule. I only spend $300 a month on food. And I still feel like I eat like a king. Food is one of those things that people can absolutely cut down on because we don’t need that much food in order to stay alive.
Even healthy food.
7) ATM Fees
This is a fee that should not be paid under any circumstances. It’s not just one of the bad spending habits, it’s one of the worst spending habits. You should NOT pay money to have access to your money in the first place. That is ridiculous. This should be avoided at all costs.
These days, with the pop up of online banks, it’s becoming more common for people to use their debit cards to get cash from ATMs. However, with online banks comes at a cost. There’s only a limited selection of ATMs that you can choose from that doesn’t charge any fees. I know because I personally use online banks.
Therefore, if you can avoid this expense, avoid it at all costs. You should never have to pay money just to have access to the money that you own. That’s not right. Always use an in network ATM so you can avoid it. We are becoming less cash heavy society anyway. Use this fact to your advantage.
8) Bad Spending Habit to Frequently Change the Oil
It’s one of the bad spending habits to frequently change out the oil. I’m not telling you what you should do for your specific car. Every car is different. All I can do is talk in general terms. And in general, it’s not a good idea to change out your oil every 3,000 miles if your car is new and your driving habits are good.
I change mine at around the 4 – 5,000 mile mark. The last oil change I did was after almost 2 years of not driving frequently due to the pandemic. It’s not a good idea to change oil frequently because not only is it bad for your wallet, it’s bad for the environment. Oils are notoriously hard to get rid of.
For the general guideline that your mechanic gives you. Almost every mechanic gives you the “get our oil changed every 3,000 mile” spiel. That’s not right. Figure out what’s the right frequency of oil change is for you. Chances are, it’s much lower than you think.
There’s no need to spend more money on your car if you don’t have to. Maintenance expenses are some of the biggest money pits for a car. It’s best to manage it properly.
Bad Spending Habits Will Break You
Bad spending habits will break you if you don’t break it. When I was ignorant about cars, I used to change my oil at even around the 2,500 mile mark. When you are more knowledgeable, people can’t rip you off as much. I used to spend a lot of money on novelty, one time use items because I thought it was “for memories”.
Until I figured out that I don’t use any of the novelty items and most ended up being donated or thrown away. You have to know yourself and have you be truly honest with yourself when breaking these bad spending habits. Get rid of your pride and move away from pride.
You have to realize when you are spending too much money and when you are spending the right amount of money. It all starts with a budget. When I first started my financial independence journey, I didn’t think of starting a budget. The most common excuse was, “I’ll figure out a way to remember it”.
As I’m sure you know how this story is going, I couldn’t remember the purchases that were necessary and the purchases that weren’t. I mindlessly just paid off the balance at my credit card without considering if they were optimized or not. Budgets will keep you accountable and on track.
The great part about all of this is that it is completely doable. These bad spending habits are something that you can break today and start implementing today. It may take a year or so before you don’t feel the need to spend any more money. However, that’s when you completely become free because your wants are controlled solely by you.
It first starts with recognition.
Bad Spending Habits to Break List:
- Impulse purchases
- Not having a budget
- It’s a bad spending habit to purchase novelties
- Gambling
- “30% off” signs entice you too much
- Bad spending habit to eat out often
- ATM fees
- Bad spending habit to frequently change the oil
