After my divorce I had to come to terms with my less than stellar economic situation. Unfortunately I couldn’t go into semi-retirement and live off of alimony. Although I was never a lavish spender, when I was married we seldom had to worry about paying the bills. But after the divorce, I had to sit down with pen and paper and account for every dollar. It was a tough transition but one that has taught me the discipline I need to stay within my means.
I have now been single for some time and have pretty much mastered the art of budgeting. I am very careful about the money I spend and have learned to stop throwing money away in three particular areas that I think most people are guilty of.
Buying for Convenience
If the number of fast food restaurants is any indication, most Americans are guilty of supporting these establishments on a regular basis. I know of a number of people that eat at these places on a daily basis. It may not seem like much of an expense for one meal, but over the course of a week or month the total cost can add up.
Instead of paying someone else to prepare the food for us, go to the grocery store, spend a minimal amount of money on the ingredients, and take the time to prepare the meal for yourself. By doing so you could save half or more on what you pay to eat out. To save a significant amount of money each year, plan ahead and buy your ingredients at the grocery store.
We have all been suckered into making impulse purchases. Retail stores have taken the science of human psychology and twisted it around for profit. No longer do we just buy what we need, but we have been conditioned to buy what we want. We are bombarded with messages telling us that although we might not be able to afford an item, we still deserve it.
This thinking has been ingrained into our collective conscious that most Americans with a credit card owe an average of over $7,000. Savings in this country is almost non-existent, as many Americans live paycheck to paycheck. Many households are just one unexpected bill away from hard financial times. That is part of the reason we see so many payday loan businesses and debt consolidation companies springing up.
To win the battle over impulse buying, make a list of what you need to buy at the store and stick to the list. Determine ahead of time to avoid purchasing things you do not need. Before making any unplanned purchase, learn to ask yourself if this is something you really need or if it is just a want in disguise.
You think your bank is storing your money for free? Think again. Banks are in the business of making profit, and they have found profitable ways to add to their bottom line through the use of an assortment of “fees.” These range from $3 fees to use an ATM to $35 and up for fees when you overdraft your account. Some banks charge fees for dropping below a certain amount in your checking or for sending you a printed statement. It literally pays to keep a close eye on your bank accounts. Always keep more money in your account than the required minimum and track your transactions. And pay attention to notices coming from your bank. They are good at coming up with innovative ways of chipping away at your account balances.