Three Habits Guaranteed to Drain Your Savings Account
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Without careful tracking, planning and analysis of your spending, it is possible to develop habits that will drain your savings account faster than you might realize. Often times what we actually spend in certain areas, like groceries, can be a much higher number than what we think we spend.
Our family learned this first hand after we analyzed our spending at the end of 2012 and found that we were spending twice what we thought we spent in the areas of groceries, entertainment and gasoline expenses. Once we moved past our shock, we realized that we needed to change our habits and take action to create new, healthy habits to reign in our spending and start thinking more carefully and methodically about our purchases. The first way we did that was by tracking every expense. Then, we set a budget and have done our best, day in and day out, to stick to it. Here are three habits that we learned from personal experience can drain your savings account if you’re not careful.
Think Twice Before You Drain Your Savings Account for the Sake of Convenience
Often times we want to buy newer/bigger/better or fancier things because we think it will make life more convenient, but convenience can be a double-edged sword. Yes, that in-ground swimming pool will save you time and money that you would normally spend going to the beach or local community pool, and yes, it would be convenient to go right out into the back yard to swim, but will the cost, maintenance and care of that pool be a burden on your time and your budget?
Often times with upgraded items for the home or for yourself come more to do in terms of caring for those upgraded items than people had bargained for. With new stuff comes more to take care of, more to repair and more to maintain. So if you’re considering a purchase that will supposedly make your life more convenient, make sure to look at the other side of the coin and count not only the initial cost of the new item, but the time and money it will cost to maintain and repair said item.
Out With the Old, In With the New
With technology changing as rapidly as it is these days, the newest state-of-the-art techy gadget of today will most surely be replaced by something newer and better tomorrow. However, just because something better comes along, that doesn’t mean that’s it’s time to upgrade.
We got a little lesson in this recently when our old tube TV (our only television) died. I was complaining to my little brother about the expense of our first flat screen TV purchase, which occurred this month. Although we’ve wanted a new flatscreen TV for years, we simply couldn’t justify it as the purchase didn’t fit in with our goal of becoming debt free, especially when our old tube television worked just fine.
As I was complaining about our $568 spend, my brother shared with me a different perspective. “You’re actually pretty lucky you waited and bought now.” he said. “We bought the exact same TV 5 years ago and paid $5,000 for it.” This little story illustrates why it might be better to keep the old, and buy new later on.
Can’t Buy Me Love
Often times people fall into the habit of spending money to gain love or acceptance from people, and this is a habit that will drain your savings account real quick, and your goal to gain love or acceptance will fail as well. Instead of working to buy one’s time or affection, look for relationships in which people appreciate you as you are, not because of the money you have or how you spend it.
No, you don’t need to be cheap, but at the same time, a true friend or loved one will appreciate you for who you are, not what you have, and will also appreciate your commitment to being responsible with your money.
There are likely many more habits that will drain your savings account if you let them, but you don’t have to fall prey to them. Instead, keep an objective eye on your spending, making sure to put a stop to unhealthy habits that have a continual drain on your bank account.
What habits do you have, or have you overcome, that have drained your savings account? Have you ever tracked your spending? If not, what do you think you spend on groceries each month and are you willing to keep track of it for a month or two to see if your perception of reality is accurate?
Photo courtesy of: David Blackwell