Suze Orman: The $1 or $2 Mistake That Could Be Costing You Way More
Written by
Crystal Mayer
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Rebekah Evans
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American author and personal finance expert Suze Orman is known for providing easy-to-follow money advice to help people of all income levels get out of debt and build wealth. In one of her blog posts she explained how your shopping habits could cost you more than you think.
Even small expenses can add up over time, making a huge impact on your ability to save money and build a more stable financial future. Here is the $1 or $2 mistake Orman said could be costing you way more.
The Little Mistake That Really Adds Up
Orman said the $1 or $2 item you get at the grocery store could be a significant obstacle to achieving your financial goals. She explained that the more often you pick up a more expensive brand or an inexpensive item at the store, the quicker it can add up and prevent you from paying down debt or building your savings.
And while you may deserve the pricier product or small impulse item, it could cost you “$20 or more per shopping trip.” Over the course of several months or a year, you could end up spending hundreds or even thousands of dollars on non-necessities.
Common Small Purchases That Can Cost You Big
While you frequently hear money gurus talk about the need to cut out the morning latte or stop eating out, there may be other purchases that are costing you more than you think. Common expenditures that may not seem like a lot at the time but are actually preventing you from saving more include things like always choosing the name brand over generic products and buying individually packaged items in lieu of a bulk bag.
According to The Dinner Daily, generic foods can save you 25% to 30% over the name-brand. Do this consistently and you could save over $500 per year. Generic brands are often just as good as the name brand and some are even manufactured by the same company. Some retailers also have highly-rated private labels that can save you substantial amounts of money.
Buying individually packaged snacks is another hidden cost that can add up quickly. For instance, a 27.3-ounce carton of Goldfish from Target costs $8.29. On the other hand, 12 1-ounce packs of Goldfish will cost $6.69. This means you’ll pay 26 cents more per ounce for the convenience of an individually wrapped package.
How to Avoid These Money Mistakes
The good news is that these money mistakes can be avoided. Awareness is often the first step in getting on the right track. Once you begin to recognize ways you can cut costs, you can make adjustments to your shopping habits. Take the money you save and either build your emergency fund or consider investing if your emergency savings is fully funded. Too often, people place items in the wrong category. They classify something as a need despite it being a want. The goal should be to reduce your want spending, Orman said. This is particularly important if you are not currently saving for retirement or do not have a fully funded emergency fund.
In addition to reviewing your shopping habits, Orman recommended reviewing the amount you spend on your car. In other words, ensure you are not paying more than you need to for your transportation. She also said you should get comfortable telling loved ones “no.” While it can be challenging to tell kids that they can’t have a particular toy or go to the movies, it is more difficult to get out of debt. Being comfortable in setting boundaries in an effort to ensure you can meet your financial goals is critical for long-term success.
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