“A penny saved is a penny earned” – Benjamin Franklin
One of the best ways to build good money management habits, is to not waste money on dumb things. Avoid the following wasteful habits and you can use the extra cash to add to your savings or retirement accounts.
1. Grande Skinny No Whip Lattes – you will spend close to $5 bucks every time you order a specialty drink at Starbucks. If you order one every day, that is $35 per week or $140 per month! Instead, have a cup of coffee at home (you can add all of the sugar and whip cream you want!) and save all of that cash. I’m not saying to never go to Starbucks, but be careful. Those are expensive drinks.
2. Ordering Drinks at Restaurants – it is easy to get into the habit of always ordering a coke, sweet tea or other beverage at restaurants. These drinks usually cost about $2 and they are just sugar water. Try ordering water instead.
3. Monthly Bank Charges – once you open up a checking/debit account, banks notoriously charge all sorts of monthly fees if you don’t follow their rules. They may require minimum monthly balances or charge a fee if you write too many checks or charge fees for not using their ATM machines. These fees can ALL be avoided. Some banks have special “Student” accounts that will waive most of the fees. Others may “link” accounts (to your savings or your parents) to avoid fees. Some will waive fees if you have “automatic deposits” once a month. Regardless, spend the time to understand the potential fees and avoid them. It is literally money in the bank!
4. Late Fees – one of the dumbest ways to waste money is getting charged a “late fee” for not paying a bill on time. These fees can run from $25 by paying a credit card late, to substantially more for late rent or mortgage payments. There is no reason to let this happen. You can set up auto payments through your bank, put reminders in your phone, or pay them once they arrive in the mail. In the event you are charged a late fee, CALL the company and ask them to remove it. Most companies will waive the charge once per year – but you have to call and ask them to waive it. Not only do you waste your money with late fees, it will also negatively affect your credit score.
5. Buying Things You Don’t Need – “On Sale” – It is tempting to purchase things “on sale” because they are a “great deal”. But if you don’t really need them, you are wasting your money. Stores tempt us all the time with “end of season” sales and “clearance sales”. I’m all about buying things on sale versus paying full price, but you have to be selective. Just because “it’s a great deal” doesn’t mean you need to buy it. Instead of thinking about all the money you saved by “buying it”, think about all the money you saved by “NOT buying it”.