Stop Doing Dumb Things with Your Money

Doing dumb things with your money is easy. Being smart with your money is hard. If you want to be more financially secure, it’s imperative that you start by better managing your money. Take a look at a few simple everyday spending habits; look at why they’re costing you more than you think, and what you can do to change them.

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Cutting Back on Expensive (and Often Unhealthy) Habits

Consistently spending money on expensive and unhealthy habits has a negative impact on both your health and your bank account. Take smoking for example: The average pack of cigarettes is around $6-7, but we’ll round down to $5. Let’s say someone buys two packs of cigarettes a week. That equals $40 a month. Multiply that by 12 and that equals $480 a year!

Of course, not all expensive habits are unhealthy. In fact, more often than not we choose to pay more for something because we believe it’s healthier. A perfect example is bottled water. Have you ever stopped to think about just how much we spend on buying bottled water? If a bottle of water costs about $1, that means that a gallon costs about $4. Americans are known to spend more on bottled water than any other beverage, and for what? Not only is bottled water bad for the environment, but it’s also bad for your wallet. Investing in a water purifier for your home can help you save hundreds a year by simply cutting out the need (or desire) to buy bottled water.

Recognizing the Difference between Name Brand and Generic

Want to know what the difference is between a name-brand cereal and its generic counterpart? The price! Clever advertising coupled with a lifetime’s worth of brand recognition has led consumers to believe that big name products are far superior to their off-brand counterparts. However, countless studies (including this one from Consumer Reports) show us that not only are off-brand products just as good as brand labels, but they also cost a fraction of the price. Next time you’re stuck wondering if it’s worth paying more for a name-brand product vs. the cheaper generic, choose the generic.

Always Buying New

From clothes to books to furniture to even cars, buying things used can help cut your budget by 50 percent or more. One of the biggest problems surrounding proper money management is the constant thought that everything we buy has to be new, yet buying used can help cut costs in a big way. In fact, this CNN Money article shows how choosing to buy a used car over a new one can save you as much as 30 to 40 percent. Always buying everything new isn’t smart, but always buying everything used might not be smart, either. Before you make any purchase that requires a passing thought, think whether or not it’s in your best interest to buy it new or used.

Late Fees

One of the easiest (and most persistent) ways to fall into debt is to get caught in the trap of missing deadlines and paying late fees. It can start by you missing a credit card payment and being straddled with an easy, breezy one-time late payment of $25. But as you find yourself falling farther and farther behind on your monthly payments, late fees begin to add up, and before you realize it all the money, you’re supposed to be spending on paying off bills is being funneled entirely to paying off late fees.

Making a Budget

Out of all the various ways you can save, the best way to reduce dumb spending habits is to make a budget. Understanding where every dollar goes and then looking for ways to cut back on your spending habits is the best way to avoid doing dumb things with money. Once you’ve established where the bulk of your income is going, you can then work towards cutting down on excessive costs.

If you’re falling behind on your payments or are having trouble keeping up with your various debts, help is available. In addition to following the above advice, head over to CreditGUARD’s money management page to learn more useful financial skills.


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