The 8 Worst Habits for Saving Money
We have written before about “Saving” and being “Frugal” and things like that but we haven’t really addressed what to look for when you might be in danger of not saving adequately. Here’s a short list and the resolution for each, take them with you!
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The 8 Worst Money Saving Mistakes -by MilkYourMoney.com
- You think about money anxiously before you fall asleep.
This happens to me every once in a while, I get anxious thinking about all the things I need to pay for and even though I might have enough, its still a little daunting. I get to sleep by making sure that I have a handle on my finances and by keeping up with them regularly. If things are getting a little crazy, just map out a budget and get a game plan and stick to it. - You find that the day after pay day is one of the best days of the month to buy something.
This is a tough one. The day after is hard because you have a fresh wad of cash and a few extra digits and suddenly everything is an option. Amazon starts looking like every book is the most interesting book you have ever read, and there are few things on eBay you have had your eye on that suddenly make sense to bid on. Pretty soon you have blown 25% of your paycheck on stuff you don’t need and nothing to really show for it. Go pay rent and bills and groceries and then you are down to the bare minimum to get by until the next pay day. Best way to combat this? Grit your teeth and keep moving. If you can make it to the next Wednesday and have all your other bills paid, its so much easier to say to yourself that you are building up some nice money for a change. - You have a running list of things you are going to buy the next time you get some “extra” money.
If you constantly have a list of things ready to burn a hole in your pocket, that’s what you are going to do. If you don’t even have a list then you don’t have that excuse to run out and spend the money. I used to keep a list of not only things I wanted but the url to the website that would purchase it. As soon as that extra money came along, boom boom boom, that list was toast and there was another in its place. Now that I am a little older, I see what is needed and what is wanted. Of course I treat myself like anyone but I do its a little more efficiently and always make sure I have put money away for more important things. - Your definition of want is very similar to your definition of need.
Its very easy to convince yourself that those things you want are actually something you need. Listen to that small voice that knows the truth. Allow the purchase to wait at least a few weeks and see if it truly is something you need. chances are you will have forgotten about it and you will realize that you really didn’t “need” it. - You put off putting more money towards debt because you are already paying the minimum.
I get guilty of this from time to time. Even though I have told myself that the minimum to pay monthly is about 5x more than what they require, I can’t help but think that its never enough. This extra pressure seems to work well though as I have made quite a bit of progress by not putting off extra payments. Make your minimum payments at least so that your not digging any deeper, but inch your way out anyway you can by paying a little extra here and there. - You are not sure what your interest rate is for your savings account, what your APR is for your credit cards, and you can’t remember what your rate is for your vehicles insurance.
If you don’t know your digits for these things, find out. Log in to the respective company’s website and either find out online, or contact them. You have a right to know and its in your best interest. Not sure if that pun was intentional but it works the same. Be sure that you do a little self education and find out what those rates mean and why you got the rates you did. It might be bad: late payments before, or it might be good: you have good credit etc. Then you can target what you need to do in order to improve your situation. This takes a few minutes and is well worth it. - You don’t know the exact amount of money you have right now.
Check your balance every single day. And don’t just check it, spend at least 20 minutes looking at all the purchases you buy. This is not to give yourself a guilt trip or anything but the more frequently you become familiar with the trends and habits of how you spend your money, the better you will be able to stop from poor decisions down the road. - You can’t stomach the idea of having money and not doing anything with it.
You want to shop because you are afraid of not having something to play with, look at or whatever it might be. The object of your desires are calling to you and you feel helpless without it. You have a fear and the only way to feel in control is to buy something. This leads to greed and simply fuels more aimless purchasing. And you know what else? Every other person you know or have ever met does the same exact thing and feels identical to you in that regard. Everyone gets torn by fear and greed and the quick solution of buying little gifts for ourselves. Its a tough habit to break but a big one. Self reflection, education and discipline are your supports for getting through it. It might seem a little harsh or extreme but to some extent, those feelings are present.
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Pass these along to others who might benefit and print them out for yourself to keep in mind.
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Comments
“Your definition of want is very similar to your definition of need.” This is a HUGE one. It took me years to learn to view these as two separate lists.
@ Ryan: Such a rule breaker! Heh, I used to as well but I have come a long way. I am interested in reading about your entrepreneurism…not sure if thats a word or not.
@ Vered: I feel like I am redefining it daily on an instance by instance basis. A 2 week hold on purchases helps though.
Oh my, these all sound like me, two years ago. I am so glad for my wake-up call – it has literally transformed our family tree.
Thanks for sharing!
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Great list! It can be a lot easier to see in others than yourselves sometimes though. I keep saying my daughter is my best teacher. When I observe how she goes from really wanting one thing to another, it’s easier for me to acknowledge how I fall into that same trap.
@ Toblerone: Thanks for visiting!
@ Gerri: Your exactly right, sometimes seeing what others are doing is the best example. We can’t see the forest for the trees with our own situations.
haha I break a few of these rules but I am getting better. I am a struggling entrepreneur who is learning as much as he can about money and sharing it with the world.
Actually I pretty much break all the rules