7 Financial Habits That Could Cost You Thousands Every Year
Written by
Cara Danielle Brown
Edited by
Zuri Anderson
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Most people blame stagnant wages or the price of groceries for low bank balances and lack of savings. But what if the call is coming from inside the house, and your own bad habits are to blame?
GOBankingRates obtained information from money experts to discover seven financial habits that could be costing you thousands of dollars every year — and you may not even realize it!
Impulse Spending
Financial expert Rachel Cruze explains that impulse purchases like clothes, checkout line items and takeout cost Americans roughly $150 per month — that’s $1,800 per year and $108,000 over a lifetime.
To break this habit, she encourages people to stick to a budget and wait a day before purchasing anything new to give them time to decide whether they actually need it.
Paying Credit Card Bills Late
“Some people have the money to pay for their bills, but they forget to pay them on time,” stated Melanie Musson, finance expert at Clearsurance.com. “Not only do late payments hurt your credit score, but they also result in late fees.”
Staying on top of due dates is important since interest payments and prolonged debt are financial drains.
Neglecting To Review Insurance Coverage
Musson explained that many people are not only paying for bundled insurance policies they may not need (like children’s life insurance), but they’re paying much more than they have to (like not knowing they qualify for low-mileage auto insurance discounts).
She advises individuals to always read the fine print and shop around for the best quotes on health, house, auto and life insurance policies.
Paying for Subscriptions You Don’t Need
Many people have subscriptions to apps and streaming services they haven’t actually used in years. If your favorite show was removed from Paramount+, or you no longer need Tinder Gold because you got engaged, do yourself a favor and cancel those services or you’re just flat-out wasting money.
Failing To Set Financial Goals
David Lester, founder at DCL Capital, explained that, without goals, people tend to spend money when they are bored, stressed or unhappy. He advised prioritizing investing and saving with specific objectives in mind instead of shopping or dining out.
“If you love cars (like I do) then set a plan to get your ultimate car. The ‘carrot’ of getting that car […] can help you stay on track with your savings,” he explained.
Leaving Retirement Money on the Table
“If your employer has a 401(k) or other retirement plan that makes matching contributions, you’re turning your back on free money if you don’t contribute enough to get the full match available,” stated Richard Barrington, financial analyst at Credit Sesame. “Matching contributions are part of an employee’s compensation package, so if you don’t strive for the full match, it’s sort of like not bothering to cash all your paychecks.”
Not Paying Attention to Retail Markups
Marc Hardgrove, CEO at THE HOTH, advocated for buying generic or wholesale as opposed to brand names which may be the largest silent drain on your wallet.
According to an infographic created by Swagbucks, name-brand bottled water has a 4,000% markup at $2 per bottle as opposed to the 5 cents it costs the manufacturer to make. Following close behind, brand-name prescription drugs have a 200% to 3,000% markup, eyeglass frames have a 250% to 1000% markup, and designer jeans have a 500% markup.
When given the option, opt for store brands or a Costco membership.
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