16 Habits to Avoid if You Want to Save Money NOW

When it comes to saving money, the average American family is finding it more difficult to do now than they did two years ago. With record inflation and rising prices, our pocketbooks are emptier and it’s taking more of our monthly income to make ends meet. They are struggling to adjust their budgets for inflation.

Despite the fact that a younger generation is taking control of their finances and embracing loud budgeting, nearly 8 in 10 American families are living paycheck to paycheck and even those making over $100K per year are finding it difficult to live within their means.

Despite living on a less-than-average income, we’ve reached some great, big financial goals in over 35 years of being frugal. One of the most important things we’ve learned is that when it comes to saving money what you don’t do is just as important as what you do do.

If you’re ready to consistently spend less and save more, here’s a list of common financial habits to avoid.

For more ways to create frugal, money-saving habits (with our real-life examples), watch the video below.

1. Avoid the status quo

Resist the temptation to keep up with the latest trends

A recent study showed that the average American is carrying more than $23,000 in credit card, student loan, auto loan, personal loan debt. When you add on mortgage payments, that debt load soars to well over $100,000.

Added to this, credit cards have become the default method of payment, meaning that many are digging a deeper debt hole each month.

The problem begins with the fact that the status quo often encourages unnecessary spending on “must have” things like fashion, technology, or luxury items. In reality, these items are seldom necessities.

To end the cycle, focus on always spending money based on your values and your financial goals.

2. Avoid lifestyle creep

Lifestyle creep is when what you spend gradually increases as your income rises. It’s easy to fall into the trap of upgrading your life with each pay raise, but this habit can quickly lead to a flatlined saving rate along with an inability to make progress on financial goals.

To fix this problem, resist the urge to inflate your lifestyle as your income rises. Keep your goals front and center. Find a balance between updating what you really need to buy with your additional dollars and put a healthy percentage of that money toward goals.

3. Avoid waiting until you make more money before saving money

Many people fall into the trap of delaying saving until they believe they have a higher income.If you don’t manage what you have, you’ll never have financial stability.

Here’s the truth. You need to manage your money, no matter how much you make. In fact, those with less need to manage it more.

Even though prices are currently , there are many ways to cut expenses during inflation. Waiting for the perfect moment to start saving means misused or missed opportunities. Starting to save money, no matter how small the amount, is crucial for building a strong financial foundation.

Start today and build the habits and financial discipline that will help you grow small amounts of money into BIG money over time.

4. Avoid upgrades

It’s so easy to fall into the habit of upgrading your car, phone, appliances, furniture, or clothing on a regular basis. Whether it’s a change of fashion for a new season or a fancy new model of iPhone with even more powerful AI capabilities, upgrades are an integral part of the world of advertising and commerce.

But, the don’t need to be a part of your life. Upgrades can drain your finances. While it may seem necessary to stay current, the truth is that many upgrades offer marginal benefits at a significant cost.

Holding off on upgrades allows you to maximize the value of your existing possessions. Delay upgrades until they are truly necessary or provide substantial benefits.

5. Avoid overspending on housing

Don’t cash strap yourself for housing expenses. In order prevent housing from overburdening your budget, keep your mortgage or rent around 25% of your monthly income. An easy way to think of it is that you can budget one, weekly paycheck toward rent or a mortgage.

Here’s why this is so important.

Housing costs do not just include your rent or mortgage payment. You also must take into consideration property taxes, utilities, maintenance, home or renter’s insurance, and cell phone costs.

That means the housing can consume a large portion of your budget if not managed carefully. Overspending on housing beyond what you can comfortably afford can leave you with little room to save for other financial goals.

You may need to start with a smaller home or move to a more affordable area if housing costs where you currently live are more than you can afford.

6. Avoid impulse spending

Impulse buying often leads to unnecessary spending on items that you haven’t planned for and may not truly need.

Whether it’s grabbing snacks at the checkout line or spontaneously purchasing items online, these purchases can quickly add up and strain your budget.

Resist impulsive purchases by giving yourself time to evaluate whether the item is truly worth the cost and fits within your budget. Try instituting a mandatory “wait” period of 48 hours before you buy – and then stick to it.

7. Avoid paying full price

It’s the frugal mantra: “Never pay full price”.

With the availability of discounts, coupons, and sales, there are numerous opportunities to save money on everyday purchases. Seek out discounts and sales to stretch your dollars further and get more value for your money. Actively look for ways to save.

https://subscribepage.com/radically-reduce-expensesIf you’re ready to learn key ways we slashed our monthly budget (and you can, too), grab our free guide, “10 Ways to Radically Reduce Your Expenses”.

It’s possible to reduce your overall spending without sacrificing the quality of the items you purchase.

8. Avoid debt

Loans can spiral out of control quickly, especially with unsecured credit card debt.

Those zero interest cards are introductory rates and they only last so long. After that, you’ll be slapped with an interest rate which will take your breath away.

Credit card interest rates are most generally tied to the prime lending rate (plus a certain number of points). When the feds raise the lending rate, your credit card interest will also rise.

This means debt can make it really hard to get ahead financially.

Here’s how to pay off debt quickly.

List your debts in order from smallest to largest. Pay the minimum on all of them – PLUS extra on the first loan on your list. As you pay off a credit card, add the minimum you were paying on that debt to the next debt on the list.

Be sure to have a graphic or some other visual aid. Print it off and place the image where you can see it several times a day. Color in the graphic to mark specific financial milestones are you reach them.

It’s also super helpful to have forms that you use every month to track your payment and how much you have left to pay on the debt.

This is called the “Snowball” method and it’s what we used when we were paying off debt. As you see yourself making progress, this will help you stay encouraged and on track.

9. Avoid neglecting to budget

You can save all the money in the world, but if you Fail to assign that money a job to do in your budget, you will spend it. We call this mistake “The big green pile of money error” – and we’ve made it.

Without a budget, it’s easy to overspend in certain areas without realizing the consequences until it’s too late. Budgeting helps you identify areas where you can cut back, so you can free up funds to allocate toward your financial goals.

 Create a budget. It takes less than 30 minutes a month. Track your income and expenses. Then, stick to your spending plan.

10. Avoid unnecessary subscriptions

Subscribing to services or memberships that you don’t fully utilize or need can drain your finances over time.

The cost of streaming services, gym memberships, magazine subscriptions add up quickly and they can sabotage your efforts to save money to reach financial goals.

Here’s how to break the “subscription habit”.

Make a list of ALL your subscriptions. Don’t forget about the ones which renew once a year. Multiply your monthly fees by twelve. Then, you’ll be able to judge how the yearly cost of each subscription is affecting your financial goals.

Evaluate which subscriptions are essential and which can be eliminated or downgraded to a less expensive plan. Cancel subscriptions which are too expensive or no longer useful to you.

Cutting back on unnecessary subscriptions frees up more money in your budget each month.

11. Avoid neglecting regular maintenance

 Many of our possessions such as, vehicles, appliances, generators, furnace, and central air systems need routine maintenance.

The cost of tasks like oiling, changing filters, and periodic tune ups all need to be added to your budget. By maintaining the efficiency of expensive items, you will prolong their life and, ultimately, it will cost you less money in the long run.

12. Avoid expensive habits

Costly habits such as smoking, excessive drinking, or frequent dining out can drain your finances in a hurry. These activities often come with a hefty price tag that can hinder your ability to save money for the future.

Cutting back or eliminating expensive habits allows you to redirect those funds towards more meaningful and rewarding endeavors. Breaking free can not only improve your financial health, but also potentially enhance your physical well-being.

13. Avoid expensive entertainment

Attending concerts, plays, or symphony performances can be a delightful experience, but ticket prices and associated costs can add up quickly. Without careful budgeting and planning, indulging in expensive entertainment options may strain your finances.

We all need some entertainment – It’s relaxing and enjoyable (and most often we are doing these activities with friends). But, overspending on tickets and associated expenses can derail your financial goals.

For guilt-free fun, Look for ways to enjoy entertainment without breaking the bank.

Attend free community events. Explore local parks and museums. Volunteer as an usher for plays and musical events. By volunteering, you not only gain free access to performances, but also meet like-minded individuals.

Here are three quick places to look for discounted tickets.

  1. Groupon often has discounts, but dates and the number of tickets available for that discounted price are limited.
  2. Purchase tickets directly at the box office to avoid paying additional Ticketmaster fees.
  3. Banks, employers, and civic organizations often buy blocks of tickets for a discounted price and then pass that savings on to the public.

14. Avoid convenience products

Convenience comes at a cost, and purchasing convenience-based products like bottled water, pre-cooked meals, or deli items can consistently stress your grocery budget.

To save money, look up on-line, homemade versions of products you regularly buy and give DIY a try.

15. Avoid paying for television or streaming

Subscription fees for cable TV packages or multiple streaming services can quickly add up, consuming a significant portion of your entertainment budget.

The average cable bill just hit $100 a month. Cut the cord on paid television to reduce your monthly expenses and use those funds towards savings.

If you enjoy Netflix, Amazon Prime, Hulu, or Disney Plus, rotate your subscriptions. Buy a different one every three months and catch up on your favorite shows or movies. In this way, you’ll only be paying for one premium service at a time.

Explore free or low-cost alternatives for entertainment, such as borrowing DVDs from the library, watching content on free streaming platforms, or participating in community events.

16. Avoid paying added fees

Fees, whether they are late fees, ATM fees, or credit card fees, can slowly eat away at your budget and hinder your financial progress. These charges often arise from oversights, but can accumulate into substantial costs over time.

Here are four ways to be proactive about avoiding fees.

  1. Look for fees on your monthly bills which you don’t recognize. They may be convenience fees.
  2. Set up automatic bill payments to ensure that you never miss a due date and incur late fees.
  3. Use ATMs affiliated with your bank to avoid out-of-network ATM fees, or consider switching to a bank that reimburses ATM fees.
  4. Pay attention to the terms and conditions of your credit cards to understand and avoid fees such as annual fees, balance transfer fees, or cash advance fees.

Finally, consider paying bills quarterly or annually instead of monthly to avoid any additional processing fees.

Leave a Comment