Everything you do in life is going to affect you in one way or another in the future. How you spend your money now must be included in that list. By taking a long look at your future finances, bad spending habits could be hurting you in as many as 10 different ways.
1. Keeping Balances on Credit Cards
The best way to handle a credit card is to pay it off in full each month. This prevents you from paying any interest at all. Otherwise, leaving a balance is costing you in interest and it adds up to large figures each year. Think about what you could do with that money instead of giving it to already mega-rich companies.
2. Not Having a Budget
When you do not have a budget, it is easy to develop bad spending habits and buy things you want rather than things you need. This can leave you short on being able to pay your bills or saving money.
3. No Emergency Fund
Emergency funds can come in handy for sudden unplanned expenses. Whether it is for car repair, an emergency visit to the hospital, or a home repair, an emergency fund can prevent you from charging even more money on a credit card – with interest.
4. Being without Health Insurance
It is true that health insurance is not cheap – but not having it is even more expensive. Just because you are healthy today does not guarantee that you or your children will be that way tomorrow. Health costs can be very expensive and a single incident can ruin you financially.
5. Leasing a Car
Although leasing a car does have some advantages, you may be losing money in the deal. It could cost you $4,000 or more to lease a small SUV than it would to buy a similar used vehicle. You also lose out on being able to recover some of the vehicle’s value because you cannot sell a leased vehicle.
6. Eating Out for Meals
Whether you just eat one or more meals out at a restaurant or fast food place, you are throwing a lot of money away. Most likely, it is costing you well over $1,000 per year. Taking lunch and eating more often at home will enable you to put more money in the bank or pay more bills.
7. Paying Overdraft Fees
You can avoid overdraft fees by watching your bank account more carefully. Curb your spending habits and only buy when you have money in the bank to cover it. Get overdraft protection and avoid charging purchases to credit cards.
While buying a single pack of cigarettes at a time may not seem like much, it adds up over the years. If you typically smoke one pack every two days, you could spend as much as $200,000 or more over 40 years – with interest. When you add in increased health costs – it’s even more.
9. Not Matching Your Employer’s Contributions
If your employer is willing to match your contributions to a retirement fund, you are losing out on thousands of dollars of free money. Those contributions could help to enrich your retirement funds considerably because it adds a lot of interest over the years.
10. Paying for Memberships You Do Not Use
A lot of people like to belong to a gym somewhere but rarely go. If you have a gym membership you are not using – and other memberships not in use – eliminate them and save money.