People fall into habit-forming behaviors so gradually and simply that they hardly notice when it happens. Everyone has bad habits that they need to break. Some are more obvious than others – smoking, for example – but for most people, their patterns of behavior are so common and natural that they may not realize how much damage it’s doing, especially to their pocketbooks.
Take that unused gym membership, for example. Or the pile of overripe fruits and vegetables in the fridge. How about the workday lunch stops, or the name-brand grocery items?
“Saving money is the easy part. Breaking habits are the hard part. Unfortunately, the two go hand-in-hand. By simply changing our behaviors or mindsets we can lead a better quality of life financially and increase our disposable income by fairly large amounts,” said Kelley Schexnider, Assistant Vice President with Cameron State Bank of Cameron State Bank. “Consider that gym membership. Many people make a New Year’s Resolution to lose weight and workout. They joined a gym, signed up for the $40 or $50 monthly fee, worked out twice, and never set foot in the gym again. But they’re convinced that they’ll eventually go back, so they allow the $50 to be pulled from their checking amount every month.”
Schexnider says if you have an expensive unused membership, cancel it and work out at home – at least if you put that off, you’re not losing precious dollars. Put the money into perspective, as well.
“Think of ways you could have spent the $150 you lost by skipping out on the gym for three months in a row. For that amount, you could have purchased home gym equipment,” she said.
Another common expensive habit: Eating out for lunch. Gone are the days of brown-bag work lunches or noon trips to the home kitchen. Americans are busier than ever and fast, cheap lunches are the order of the day. The problem is, cheap lunches add up to a costly habit.
Consumers could easily spend more than $100 per month just on lunch, “and that’s assuming that they’re only spending about five dollars a day,” Schexnider said. Instead of eating out for lunch, bring last night’s leftovers to work, or stock up on inexpensive, easy-to-prepare meals from the grocery store.
“The grocery store is yet another area where consumers could save significant amounts of money. By planning meals throughout the week and sticking to a schedule, you avoid buying bulks of fruits and vegetables that go bad in the fridge because they aren’t prepared in time,” Schexnider said. “We also fall into the habit of buying name-brand only, which can sometimes cost one or two dollars more than the generic brand. In some cases, you get what you pay for, but in many other instances, you’re just paying two more dollars for the same product. It takes a bit of common sense and trial-and-error to figure out where you can skimp, but rest assured that you can skimp somewhere. You don’t always need the top brand.”
Canceling gym memberships, buying less expensive groceries and brown-bagging work lunches are all effective in stretching your dollars, but Schexnider reminds consumers that the easiest way to flush money down the tubes is to pay bills late or overdraw on your checking account.
“There are many people who overdraw on their accounts every single month because they fall into a dangerous spending pattern. When you consider how much money it costs to go into overdraft, it’s a wonder that so many people do it again and again. But that’s just another example of how habit-forming our behaviors become, even when we know it’s costing us significant wads of money. Going into overdraft can easily quash two hundred dollars from your checking account through NSF fees alone, and it’s completely preventable,” Schexnider said.
Paying bills late is another costly habit, according to Schexnider. Credit card companies typically tack on an extra $35 for late payments, with an unforgiving grace period, and most other companies also add late fees to untimely payments.
“Again, completely preventable, with a little discipline. And that’s really the key – having the discipline to get a better handle on bad habits that are taking a big bite out of your budget.”
