If your money keeps running out without saving any amount, the chances are high that you’ve developed costly bad habits. We all have bad habits that cost us a lot of money, and we need to tame them to improve savings. So, what are your bad financial habits?
In this guide, we’ll show you a few habits that have deprived many of achieving their financial goals and freedom. Thankfully, we’ll also tell you how to break bad habits to save more money. Keep reading to learn all the bad financial habits.
Bad Habits that Have Cost You Much Money
No matter how small they seem to be, bad money habits can be costly in the long run. That’s why you need to track your expenses and identify the little things eating up your money. Here are the bad money habits you need to avoid and save more cash.
1. Drinking Alcohol
How much do you spend on drinking in a month? Do the math, and you’ll get surprised by the figures. If you drink a lot, there’s no doubt you’ll spend more money on alcohol. Also, if you have the habit of drinking in trendy bars, you will pay more cash.
So, how can you break from the drinking habit? You need to determine the amount of alcohol you take in a month and where you take it. Consider drinking less alcohol to save more money. It will also help you avoid drinking-related health problems.
2. Exchanging Currency at a Bank
Did you know that exchanging currency at a bank can cost you thousands of dollars? All banks usually charge high markup fees of around 2.0-2.5%, making them costly. They inflate currency exchange prices, depending on their operational costs.
So, what is the best currency exchange in Toronto? Visit a specialized foreign exchange provider to enjoy the lowest exchange rates. An excellent example is Knightsbridge FX, which offers consistent bank-beating rates. This way, you’ll save thousands of dollars.
3. Buying Coffee
If you are one person who must take coffee every morning when leaving to work, you need to watch how you spend on the beverage. Although it’s more convenient to grab a coffee on your way to work than to prepare breakfast, it is very costly.
The best way to cut back the coffee expenses is to brew it at home instead of buying it. That way, you’ll save hundreds of dollars on coffee in a year. You’ll save money even if you use a single serve pod machine like Keurig. Also, if you use coffee to stay alert during the entire day, you probably need more hours of sleep.
4. Buying Fast Foods
After a long, busy day at work, you find it tempting to buy fast food on your way back home. Maybe you don’t want to spend another hour preparing dinner, or you are craving fast food. Notably, you need around $4-$14 for your single meal, which is very costly.
To control the habit, you first need to figure out why you love fast food. If you go for it to enjoy the convenience, you better plan ahead. The good news is that most fast foods are easy to make at home. You’ll also have the chance to make the food taste better.
Gambling is another habit that has cost many people thousands of dollars. While it doesn’t pose any risk to one’s physical health, it can ruin your mental health when you lose many times. You can even end up tapping into your savings to attempt winning.
Notably, there are many gambling forms, including lottery, roulette, poker, and many others. If addicted to gambling, and your losses are more than wins, you need to stop it. By doing so, you can save thousands of dollars. Seek help if you can’t leave gambling.
6. Impulse Buying
How much do you spend annually on impulse shopping? It’s hard to tell because you always mix the purchases with other necessities. The truth is, impulse buying can cost you a lot of money, especially if you shop without a budget or shopping list.
To break the habit of impulse buying, you need to avoid shopping frequently by waiting for around 24 hours. Also, making a budget and sticking to it can help you avoid impulse shopping. If addicted to impulse shopping, bring someone along to help you shop.
Smoking is one of the most expensive habits, especially if one suffers from nicotine addiction. It can be costly in terms of the cost of cigarettes and the number of packs you smoke. If you smoke many packs of expensive cigars, you’ll spend over $500 in a year.
Unfortunately, smoking can even get more expensive when you develop serious health issues like lung cancer. You’ll spend more money on medical bills to manage your health. The best way to avoid that is by quitting smoking.
If you have the habit of overdrawing money in your checking account, the chances are high you’ve paid overdraft fees many times. Notably, most banks charge overdraft fees of $30-$35. Paying that fee every time you overdraw can be costly in the long run.
If you’re used to overdrawing, apply for overdraft protection. You can also link your checking account to your line of credit or savings account. So, if your checking account balance is too low, your bank will deposit funds from the linked accounts.
In some instances, you might find it hard to stop your habits completely, especially if they are a source of pleasure. However, you need to proceed with moderation, whether it’s smoking, drinking, or gambling. Also, consider preparing coffee at home instead of buying it every morning. That way, you can cumulatively save thousands of dollars.