With the prices of goods and services increasing, it is essential for consumers to take a second look at their spending habits. When you understand where your money is going, it is easier to recognize where you can cut back and save.
There are so many things out there on which to spend your money. When you are clear on what is important to you and your family, you can begin eliminating unnecessary spending. Removing the goods and services in your budget that you no longer need or that serve a purpose can help you reallocate your money towards other key endeavors, like contributing to an emergency fund, a college savings plan, or a vacation fund, or eliminating debt.
The number of subscription or membership-based services is continuing to grow. And if you are like most people, you may have subscribed to a service that no longer fits your lifestyle or you do not have time to use. A market research firm C+R Research survey found that American consumers guessed they spent around $86 per month on subscriptions. However, in reality, the average monthly cost was $219 – over $130 more than suspected.
These subscriptions can include streaming services, food plans, clothing boxes, gym memberships, smartphone apps, a wine of the month club, and more.
Many of these services are on autopay, so the subscription re-ups without someone knowing they are paying for something they are not even using anymore. Being on autopay can be a smart way to avoid late fees, but you want to carefully review your bill each month and opt out or cancel any subscriptions or memberships that no longer bring you joy or you are no longer using.
Feeling a rush of glee when you find an item for less than it typically costs is normal. But purchasing that item just because it is on sale can quickly lead to overspending and guilt about buying something you do not need.
The next time you feel tempted to buy something on sale, wait at least 24 hours before making the purchase. Often the initial elation you experience from finding a deal will dissipate, and you will be able to determine if you really need the item or is it better to walk away from the purchase.
Have you ever had to throw out food that has gone bad? If so, you are not alone. According to the U.S. Department of Agriculture, Americans waste 30-40 percent of the entire U.S. food supply, which breaks down to 219 lbs. of waste per person.
Before heading to the farmers market or grocery store, look through your refrigeration and pantry. Then think about what meals you need (to use the food you already have) or want to cook this week and what ingredients you need, and create your shopping list based on that. Reviewing your current supplies will make you less likely to purchase groceries you don’t need and waste the food you already have.
Did you know that, on average, high-interest debt and fees on credit cards are costing households across the country an average of $1,000 per year, based on research from the Consumer Financial Protection Bureau? Credit cards can be a helpful tool. However, they can be more trouble than they are worth.
If you are carrying around debt on a credit card, by only making the minimum payment and carrying around a balance each month, you end up paying more in interest than if you paid more than the minimum. Therefore, it is crucial to focus on paying it off so you can avoid paying more interest than necessary. One way you can do that is by paying more than the minimum. In turn, you may be able to save yourself some money.
It is important to set aside a budget line for fun, but don’t get caught up with items in your budget that you don’t use or that bring you pleasure or add fun to your life.
Fun money is an excuse to be wasteful. Adding fun money to your budget is not the go-ahead to spend frivolously.
You can spend the money on whatever you, or if you are in a relationship, whatever you and your partner want. However, once the fun budget is gone, it is gone.
With the price of so many things continuing to increase, it is more crucial than ever to keep track of how you spend your money. As the years go by, even the most budget-conscious individuals may find themselves paying more than they need to on certain items and services. Dedicating time to review your spending habits may be well worth your effort. For more advice on saving money and creating a comprehensive financial plan, please connect with one of our financial advisors.
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The team at Spaugh Dameron Tenny works to present timely educational content that benefits doctors and their unique financial situations.
