In my previous post, I discussed 15 ways you can save more money. In as many ways as our habits can actively save us money, if we’re not careful they can also cost us money. Here I outline six common habits that could be costing you money.
1. Using shopping as therapy
This is something I used to be very guilty of. If work or study was particularly stressful, I would plan a shopping day as a form of relaxation. I’ve also seen this recommended as an alternative to using food as therapy, but I think it can be fraught with as many issues.
When we shop without intent, we are more likely to impulse buy. We are caught up in the moment wanting to relieve our stress, and making a purchase creates a short-term endorphin rush. However, impulse shopping rarely results in useful purchases.
There are cheap/free alternatives to retail therapy that you could try instead. Now when I am feeling particularly stressed, I’ll take half a day to do very little at all. I’ll write in my journal, watch YouTube videos, put a face mask on and make a cup of tea.
Another method I find is a great alternative to shopping is to get out in nature. For me, this means a walk around one of Canberra’s beautiful lakes.
2. Always buying the latest technology
Are you always the first of your friends and family to have the latest gadget or device? Do you find yourself replacing or updating items that are perfectly fine, simply because a newer model came out?
This habit could be costing you thousands of dollars each year. If this sounds like you, ask yourself why you need the latest model or upgrade. What is it really adding to your life that you don’t already have? If you don’t have a clear answer, skip the upgrade.
I also recommend tracking how much money you are spending on updated technology each year. It may not feel like much if you pay the item off in instalments, or perhaps because it’s become such a standard part of your budget, but once you add it all up, you may be surprised!
3. Upgrading your items with increased income (aka lifestyle inflation)
Similarly to #2, having a higher income does not mean you need to replace perfectly functioning items, housing or transportation you currently own. Lifestyle inflation can sneak up before you even realise it’s happening, and if you’re trying to keep your saving rate as high as possible, it’s crucial to keep it under wraps.
A smart (but strict) way to avoid lifestyle inflation is to treat any increases in income as simply increases in savings. This means adding all of your additional income to your regular saving/investment transfers each fortnight/month.
Ideally, you want these to transfer across automatically as soon as you are paid, so that you’re less tempted to spend the extra money!
4. Being unorganised
No one wants to pay unnecessary fees or payments.
Imagine thinking you budgeted perfectly for the month, only to see a fee for a subscription you forgot to cancel come out of your bank account at the last minute, or worse, have a late fee payment crop up because of an overdue payment you completely forgot about!
With a little organisation, these scenarios can be easily avoided.
Set a regular reminder in your phone for the day before bills or repayments are due, and set it for a time of the day that you aren’t going to accidentally ignore and forget about it, such as in the evening before bed.
Similarly, keep track of your subscription services. If you’re paying for a service or app that you genuinely aren’t using, cancel it! The five minutes of admin is worth it for the savings over time.
5. Being reluctant to DIY
When things around the house unexpectedly break or stop working, it can be an expensive process to call someone in to fix the issue. To combat this, teaching yourself some simple handyman skills can be a massive cost saver.
Among the likes of Youtube, WikiHow and the internet in general, there’s not many tasks out there that you’ll fail to find a detailed tutorial on online, starting with a simple “how to…” search.
This might seem daunting at first, but many tasks are simpler than we realise! As an example, last year the lock on the front door of my old apartment became jammed suddenly. Due to the necessity of a locking front door, I was tempted to immediately call for help, but I looked online first, just in case…
With the help of a YouTube tutorial, I ended up fixing the door quickly – using a pair of tweezers, of all the things! Anyway, this is a fairly ametuaer example because I am not handy whatsoever (I’m still actively working on correcting this habit, okay!), but the point is, this very simple DIY fix still saved me money.
Next time something needs repairing in your home, I encourage you to take a moment to quickly search for a DIY tutorial online first, and determine if it’s something you could try to fix yourself.
6. Not paying attention
Sometimes things go wrong. You might be charged twice at the grocery store, or something you were supposed to be reimbursed for never makes its way into your bank account.
Errors are a part of life, and they don’t have to be big deals. However, if you aren’t paying attention to them, they likely won’t be corrected, and you could lose money as a result.
Recently, I had an expensive medical appointment that should have been partly subsidised, with the reimbursement automatically sent to my account within 1-2 days. After seven days of no reimbursement, I called the receptionist to follow up (politely!).
It turns out the photocopier wasn’t working properly at the clinic the day of my appointment, and the necessary detail needed to process my reimbursement wasn’t put on to my account. Annoying, but fixable! I received the payment that night.
Keep track of money that’s coming in and out of your account, as well as pending/expected transactions. If something looks strange, or a payment is taking longer than you would expect, don’t be afraid to follow it up!
If you have the option, setting up notifications on your phone for every debit and credit to your account can make this process a whole lot easier.
Did I miss any habits here? What habits did you overcome to save money?