Changing Your Bad Spending Habits

What would you say is your worst spending habit? Do you spend the bulk of your money on a specific item each month? Like Starbucks. Or worse, do you have no idea where all your money is going towards? 

Everyone has bad spending habits and they can be on a variety of things depending on your lifestyle and interests. However, what bad spending habits can often allude to are bad saving habits. As much as we would all like to spend instead of save, saving should always be the priority. 

So how do you get into good savings habits? Well, it starts with breaking the bad spending habits. Here are some of the most common spending habits we hear about:

The Convenience Factor

No time to cook? Just grab something quickly on the way home. This is one thing everyone can fall guilty to. Whether it’s ordering in, taking out, going out or grabbing on the go, the convenience factor for the food industry is one of those bad spending habits we all fall victim to. So how do you break these eating out habits? Practice.

This will involve work and getting into a  better habit. You’ll want to pre-prep meals, organize and be creative when it comes to grocery shopping. Think of meals that will be easy to make and use as leftovers for those busy nights and lunches the next day. Pick a day to do all your grocery shopping and prep while you start to put everything away so you can use your fridge as a grab and go throughout the week. With food already prepped to go, you won’t have to worry about the time crunch and have the same convenience factor as eating out.

Tips to Optimize Meal Planning: 

These helpful tips can help you get the most out of meal planning and build healthier habits:

  • Stock your pantry, fridge & freezer

Stockpile staples in your pantry, fridge and freezer. Think long-lasting flavorful or nutrient-dense items like rice, pasta, beans, canned tomatoes and sauce, soups, frozen veggies, etc. These are staples that can easily be incorporated into a lot of recipes, and when you catch them on sale or buy in bulk, you can save.

  • Simplify your planning process with themes

To keep things easy, assign a category based on days of the week like Meatless Monday, Taco Tuesday, Crockpot Wednesday, etc. and mix the recipes up each week to keep things exciting. 

  • Plan a weekly cleanout

Plan one night of your week to just have a cleanout to eat any leftovers you have, a frozen meal you made, or get creative and use up some ingredients you have leftover. Easy and less food waste.

  • Order groceries online

This can help you from going off your list in store, you’re only buying the things you need, and you’ll reduce overspending.

  • Double recipes when possible

This way you can eat the leftovers, pack them for lunch, or freeze them so you can have a quick and easy meal in a few weeks.

Worrying About It Later

Do you keep track of your spending throughout the month? Do you know how much you’re putting on your credit card each month? We’re not innocent when it comes to this either, but by throwing purchases on your credit card without keeping your budget in mind can be what gets you into debt. Instead of putting off how much is sitting on your credit card until the end of the month when you get your statement, try and plan your purchases better or even try not to use your credit card for that month. Only work with the funds you have available through cash or debit. 

Justifying Your Spending

No matter what we’re spending money on, there is always a reason for the purchase right? But when it comes to the non-essentials do you have to justify your purchase and why you’re spending money on it? This is a bad habit when it comes to things like shopping and other expenses but there are ways you can break it. We often get caught justifying our needs versus what we want when it comes to spending. Always be thinking to yourself: “Is this something I need”? Try and think about everything you already own and if you can use something you already have or look for items that can be reused and that are multipurpose before going out to buy a new one.

Understanding the difference between a need and a want is an important thing when it comes to financial literacy and saving. 

Financial wants are the items and things we desire, compared to our financial needs which are the obligations we have such as bills, debts, groceries, etc. Our needs are usually the things that don’t really give us much gratification. Which is why our wants can get out of control quickly. The thing is, we don’t expect anyone to not buy anything ever that falls under the “want” category. But it’s about striking a balance that works within your budget. If it doesn’t fit within your budget, and you still want it, then set-up a plan to save the money for it each week/month/year until you have enough to purchase it versus going into debt over it. 

Treating Yourself

We’re not saying that you don’t deserve special treatment, but this also has to be done within reason. This also goes along with justifying your purchases because we don’t want you to be giving yourself an excuse to go out and spend money. Everyone splurges now and again, but it can also be on little things as a form of a reward and doesn’t have to break the bank. But it is making sure you have the funds available to do so and that spoiling yourself isn’t a regular occurrence. Needless to say, we always support celebrating (within budget) special occasions and accomplishments.

Simple Habits You Can Break Today

There are so many simple changes we can make that will help us save money. There are lots of areas in our lives where we are throwing away money without even needing to. Here are some simple habits you can break today that will already put you on the right track with spending habits.

1. Using your credit card for everyday purchases

Unless you have financial control of steel, avoid using your credit card for your everyday purchases like gas and groceries. We say “unless”, because sometimes it can be beneficial for you to use a rewards credit card for everyday 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 everyday 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 and 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 bank’s 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.

6. ATM Fees

When you withdraw cash, how many times do you actually use your own bank’s network of ATM’s? If it’s once or twice a month, that’s not so bad (unless the fee is $5 per time, in which case, never ever do that unless it’s an absolute emergency).

If it’s anything more than that, you’re basically flushing your own money down the toilet. Considering the fact that most Canadian bank accounts already charge you just to have an account open with them, you’re only adding insult to injury. If you take out cash once a week at an average of $2 per transaction, that’s $104 completely wasted!

Do your very best to find your own bank machine or teller if you have to withdraw cash. You work hard for your money, so try not to waste it on this truly pointless transaction.

7. Late Fees

Save yourself the time and hassle of paying your bills on time by setting them up automatically. Paying your bills late adds up fast, with all those extra fees and interest after all. Month-after-month of a few dollars here and there for each late bill will add up even faster than the ATM fees you’re paying. Set up a pre-authorized debit for your biggest accounts and budget for them to come out either on their specified due-date or on your actual pay day.

8. Brand-Name Grocery Products

Do you really need to buy a specific brand name of a product when the generic or house brand does the job just as well? What is the added bonus of having that name for something you’ll use up in a matter of days or a month? Unless there is defined value in using brand name over generic, save yourself the money and get the in house brand. Or, better yet, learn how to make your own cleaning products out of household staples, and save even more than the standard “20%” difference between brand and generic.

9. Buying Lotto Tickets

Look – we get it. You want to get rich quick and maybe the lottery is a fun way to relieve stress. But, if you’re spending even $5 a week on a ticket, that adds up fast. Unless you’re making a full return each time and getting your investment back, chances are you’re wasting money. Yes, it’s a discretionary thing and your right to do. But depending on your current financial state, maybe it’s better to save that money instead. You’re more likely to get into a car accident than to win the lottery. Save your hard earned cash, or limit your lotto tickets to one purchase a month.

10. You Don’t Plan Your Meals

You’re busy. Sometimes it’s easier to just run out and grab a burger, right? Might be easier, but it’s not cheaper, not by a long shot. If you are buying even just one meal out every day, you’re spending a significant amount more than you need to be on food. If your grocery budget is a modest $60 a week (for one person) and then you go out and spend around $10 per day on coffee/lunch (again, very modest amount), you just spent your entire grocery budget for a week on dining out, when there’s perfectly good food at home that just needed a bit of prep work. Try to limit your dining out to once a week, and, if you can stomach it, down to once a month for a special occasion. You’ll feel so much better when you see that money in your bank account (or going towards paying off a debt) instead of, technically, down the toilet later.

What are some of your biggest tips for changing your spending habits? Share below and don’t forget that you can get fast loans in Canada at GoDay when you need an extra boost to help get you by.

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