The problem with suggesting that people are wasting money is that most people are oblivious to the fact that they’re spending unwisely. Try writing down a list of ways you’re unintentionally throwing away money and you may be hard pressed to come up with more than a few. That’s because when something becomes a habit or part of your daily routine, you tend to think you can’t live without it and don’t even consider the alternatives that would cost less. It’s time to change your thinking and break the habit of wasting money!
Money well spent is not money wasted
The concept is simple; if you need it then it’s not a waste of money. However, the trick is defining what you actually need. Your obvious needs are housing, food and clothing, but to what degree is each a necessity? Are designer sheets a need? How about brand name jeans or that tasty, high-end coffee? The obvious answer is no, so in order to take the first step you need to be completely honest with yourself.
Money is Only wasted when what you buy is a waste
One man’s necessity can certainly be another man’s pleasure. It’s a matter of perspective based upon your expectations and lifestyle choices. The idea isn’t to live as if you were broke but to be more practical in how you spend your money so you can enjoy it without the stress of constantly anticipating your next paycheck.
Responsible financial management is when you can easily buy the things you need, as well as those that you want. To avoid wasteful spending you’ll need to label each purchase as a want or need. This way, you’ll be less inclined to buy whatever your heart desires and hopefully pause long enough to think about each purchase. If you ever regret a purchase, you can safely say that you’ve wasted money.
4 Ways You May be Wasting Money
- Online Shopping: There’s no doubt that online shopping is convenient way to save time and money. But for impulsive spenders, being able to buy at the click of a button can lead to financial ruin. Just watch the TV show Hoarders to see what happens when buying gets outrageously out of control. Online bidding and discount websites are pushing the idea that you can get something for practically nothing, but as the old cliché goes, ‘buyer beware’ – you get what you pay for! Decide before you go online what you’re looking for and stick to it. Don’t allow yourself to be pulled into buying something because you’re getting a great deal. If you weren’t planning to buy it before – don’t!
- Fast Food: How hard is it to get up a few minutes early to turn on the coffee pot? Serious money is wasted every month, even if you opt for the small dollar coffee at the drive through on your way to work. Think about what you could do with up to $260 this year by making your own. The same goes for most of the food you carry out. If you can’t find the time to prepare from scratch, why not consider shopping the frozen food aisle for some of those conveniences? While it may not to be the best health choice, you’ll save substantially over (just as unhealthy) fast food.
- Monthly Memberships: Whether it’s a New Year’s resolution to lose weight or a desire to be healthier, many people fall into this wasteful spending trap over and over again. While an exercise regimen is beneficial, most people jump on the bandwagon impulsively, keeping at it for a time and then allowing the membership to be just another drain on their budget. Magazine subscriptions are another perfect example; if the magazine gets tossed on the coffee table and ignored, cancel the subscription! Virtually all of the information is online for FREE.
- Bank Fees: The amount you pay for the privilege of using your hard-earned money is a travesty when it’s within your control to avoid.
- Credit Card Interest – Dave Ramsey, bestselling personal finance author and nationally syndicated radio talk show hit the nail on the head when he said, “The only thing stupider than buying something you can’t afford is buying something you can’t afford at 18%.” Consider a credit card with lower interest rate, or better yet, avoid interest and don’t use credit cards at all!
- ATM and Overdraft Fees – Well managed finances means knowing when an account is running low and using it accordingly. Avoid using another bank’s ATM by ensuring you have enough cash on-hand when you need it. ATM and overdraft fees are only acceptable in an emergency and should not be standard practice.
Your finances should never be so rigid that they eliminate your ability to enjoy life. When you want something that doesn’t fit into your budget, adjust your lifestyle until you can afford it and accept the fact that it may require denying yourself other things that you want. The key is to find a balance between your wants and needs – covering all of life’s necessities and having a little fun in the process.