Are any of these bad spending habits familiar? Kick them in the bud early and your wallet will be happy.
1. Using your credit card for every day purchases
Unless you have financial control of steel, avoid using your credit card for your every day purchases like gas and groceries. We say “unless”, because sometimes it can be beneficial for you to use a rewards credit card for every day purchases (some offer cash back, others give you discounts on the specific merchandise). The best way to do this would be to pay off the balance you put onto your card for these every day purchases immediately. Not tomorrow. Not next week. Not next pay. If you budgeted the cash for it and it’s sitting in your chequing account, pay it off when you get home. You’ll avoid the interest and also avoid going over budget.
If you’re carrying a large balance on your credit card, better not risk it with this one. Stick to cash.
2. You buy things online without budgeting for it
It is really, really hard to avoid every day deals when marketing comes right to your phone now-a-days. If you find yourself over-spending because of “online sales” at your favourite retailers (when you actually don’t need to buy anything new), do yourself a favour and unsubscribe from the ones you can live without. It might be helpful to stay subscribed to sites that help you save money (flyer websites, discount sites, etc) if it’s something you would spend on regularly anyways.
3. Not returning things that don’t work/fit/etc.
We know time is precious, but do yourself a favour and return items that don’t fit the need you bought it for initially. Are the pants you bought too big or small? Bring them back and get the right size or just get your money back if they don’t. Did you just have a huge impulse spending spree and now you’re feeling guilty? Bring it back right away! If you’ve, at any point, convinced yourself you don’t need what you just purchased, you’ll be a lot happier (and richer) with the money in your pocket again.
4. Not looking for deals and discounts
LivingSocial.com & other “Groupon-esque” type websites are amazing, aren’t they? Flyers are great, too. Store sales, even better. If you have the time to shop, you have the time to also “pre-shop” because in this case, time really is money – money saved. Impulse shopping, even just “picking up milk on the way home” can add up quickly when there might be a sale coming up on said milk tomorrow. Can you do without for one day? Can you spend the time looking for discounts on things you need regularly? We’re not saying you have to go full-on couponing (though, that’s totally fine if you want to!) but using deals available to you is just a good idea.
5. Overdraft fees (for bank account) and overlimit fees (for credit cards)
Whoops – your $10 lunch just became $45 + $10 because of the banks overdraft fee policy. Or, whoops – your $10 lunch just became a $29 + $10 lunch because of the credit card’s overlimit policy. That is a lot of money for just one slip up. Don’t let yourself be tempted to “go deeper” into overdraft just because you’re already there, either.
If you can, try to get an automatic account transfer that will cover any accidental overages. Some banks will allow you to set up this transfer from one banking account to another, or even from your credit card to your bank account. Just be careful with this – if you’re constantly over spending, this might just be another way to overspend.