When your bank account is never as full as you like, it’s tempting to lay the blame somewhere else.
It’s not your fault because a couple of unexpected expenses popped up this month that you couldn’t ignore.
No worries; you’ll get back on track next time out.
But wait – December is only a week or two away and that means Christmas.
Nobody is going to rein it in during the season of giving, so that’s another excuse to add to the list.
Splurging on the big things makes it feel as if you’re not the problem. Everyone needs a car or a holiday or a night out to blow off steam.
It’s an occupational hazard of being a human being.
While this isn’t strictly true, they still shouldn’t put your finances at risk.
Why? It’s because of the small stuff, the habits which ensure you stay in the black and avoid the red.
The problem is your lifestyle doesn’t include any prudent money habits, and that’s what’s costing you money.
If you’ve picked up only a few bad practices along the way, they can be expensive. Here are six basic ones that are very common and how to bypass them.
Signing Without Researching
Everybody likes to think they do their due diligence before agreeing to terms, but it’s not the case.
Yes, there aren’t too many people who don’t read the small print and hire a solicitor when they take out a bank loan.
But, asking a lender for credit isn’t a lifestyle habit per se if you bar credit cards.
It’s a last resort, and because of that, you will try and tread as carefully as possible (hopefully).
Where signing without researching becomes an issue is with stuff that doesn’t seem significant.
Take a mobile phone contract as an example.
You need one because they are essential now, and lots of them are the same. They have free data, minutes and text messages.
Therefore, it’s easy to presume there aren’t any better offers and to sign up to a two-year deal without thinking. However, Sky reported that the average customer was overcharged £22 after a contract ends.
For high-end phones – iPhones and Samsungs – it rose to £38. Without reading all the info, there is no way to understand your exposure.
Plus, not all networks and suppliers are the same. Smarty.co.uk refunds its customers for unused data while idmobile.co.uk rolls it over to save you money.
Shoppers who take their time to find the right deal will bag a bargain.
Buying Cheap Clothes
In the interest of trying to cut costs, you head to your local Primark and stock up on throwaway gear.
When everything is old and ruined, you can head back and replenish the ranks.
Stuff in these kinds of shops is so cheap that it’s worth the hassle to go shopping every couple of weeks rather than once every three months. At least, that’s the logic.
The reality is a little different.
For starters, this method charges shoppers a significant amount in overhead fees. No, these aren’t only associated with businesses and houses because they are the charges which apply with shopping also, such as delivery costs. Or, the amount you spend on parking.
Although they seem small, they add up over the course of a year.
Secondly, buying little and often is as expensive as paying full price for a product up front. Yes, the initial cost is low yet you have to fork out multiple times and that raises the overall rate.
Buying clothes from a high-end retail shop means the quality is good and the item shouldn’t disintegrate after a single wash.
Of course, you can always use sales to purchase the best gear at knock-off prices.
Buying Pricey Food
On the flip side, there are some things that you should never pay over the odds for.
Clothes are fine as the ends justify the means, but your food is a different kettle of fish.
Let’s face it – everybody loves brands but nobody can tell between Heinz and Smart Price beans.
All you see is the packaging and think “I’ll go with the nice shiny one.” After all, it sends a shiver down the spine to think of your neighbours whispering about how you’re living on a shoestring budget.
Being proud is pricey simply due to the fact there is no difference in taste. With an open mind and a pinch of salt, you’ll be able to rustle up a treat with basic brands.
In fact, Moneysavingexpert has a study which reckons 50% of people who try non-branded products prefer them to the alternative.
The only real contrast between the two is the price. On average, a person can cut their shopping bill by £850 a year by shifting down one product level.
The key is to think about the item before throwing it into the basket. Is there a difference or is the packaging catching your eye and manipulating your decisions?
Often, it’s the latter and it’s a very expensive strategy to fall for regarding your budget.
Hoarding seems like a cosmetic issue.
Yes, it’s not pretty to look at but it’s not getting you into debt. Except, it is because it encourages you to spend money.
When you’re a hoarder, it’s tricky to resist the urge to splurge. Granted, the knick-knacks aren’t dear yet they add up over time.
Plus, there’s a mental aspect to hoarding. Because you do it, for one thing, you do it in every other aspect of your life, which means you can multiply the costs by twenty. Ouch – that’s expensive.
If you thought that was all, then you were mistaken. Usually, people with messy wardrobes spend extra money each month because they can’t see what they have.
This particularly makes sense when the season changes.
Your winter jacket is nowhere to be seen along with your gloves and scarf, so you go out and buy new replacements. And, you make the same mistake every three months: purchasing new things when you have perfectly good alternatives in the drawer.
All it takes is a spring clean and you will be able to create an inventory. Once you do this, deciding whether you need to go shopping is simple as you can consult the register.
If the stock levels are high, you can leave it until everything starts to get tatty and old.
Paying With Cash
Conventional wisdom states that paying by card, debit or credit, is dangerous. Thanks to contactless technology, frittering away money without realising is straightforward.
It’s much better to draw out cold, hard cash and keep track of your budget the old-fashioned way.
After all, there is something about having the Queen’s head in your hands which makes it tough to hand over the tender.
For the most part, this is a good piece of advice as plastic is a risk. However, it doesn’t include the danger of using ATMs, and that isn’t a reference to thieves.
Instead, it’s a nod to the charges some holes in the wall incur to withdraw cash. Even in 2018, it’s not free to use ATMs.
Mentalfloss.com says that Americans wasted $7 billion on fees in 2010. While the US isn’t the UK, Britons make the same mistake too.
Therefore, sometimes it’s wise to stick with a card as they hardly ever incur purchase charges.
Watch how you use your card abroad also.
Whether it’s a card payment or a withdrawal, your bank might charge a handling and non-sterling transaction fee.
Switching to an account which has zero transaction fees abroad can save the average person a significant sum of money.
According to forbes.com, the amount for British holidaymakers is £125 million. If you account for a small slice, it’s still an incredible number.
Skipping The Gym
With Christmas on the horizon, there is an inevitable New Years’ resolution to make: lose weight. This Is Money reckons the average cost of a gym pass is £32 per month, with some as high as £50.
Yearly, this comes to a total of £384. Regarding your health, it seems like a small price to pay as it could add years to your life.
The thing is studies show that more than two-thirds of the money is underutilised. In short, people don’t use the gym enough to sanction a £32 a month membership.
What it takes is someone to focus and work hard on building a routine. Although it’s tough, getting up early in the morning is often a fantastic way of incorporating it into your lifestyle.
Then, there is no need to rush around at night when you’re tired after work.
Of course, the other answer is to avoid the gym and develop your own routine. Go for a jog or join a sports club or do exercises at home for free.
Do you do any of the above? Are you surprised by how much they might cost you in the long-term?