While hearing that budgets are sexy probably catches you a bit off guard, but whatever helps you free up extra money every month is worth a shot, especially if you can put towards better use instead of blowing it all at the bar, going on a shopping spree, or just not knowing the most cost effective way of spending. Every dollar you free up can go towards building up an emergency fund cushion of a few months’ worth of expenses, finally paying off debt, or maximizing your retirement account, which if you still have a few decades until you retire, probably isn’t on the top of your list of things you want to accomplish right now, but it should be.
Missing Out on Credit Card Rewards
Credit cards offer protection against fraud by not having to worry about your bank account getting wiped out like you would a debit card, but one of the best pros of a credit card, and why you can argue that you could actually use one for every purchase, would be the rewards, that by making the purchases you would be making anyways, you can earn points or cashback. Not taking take advantage of this would be leaving free money on the table, probably upwards of hundreds of dollars per year, as long as you don’t go overboard and start charging more than you can afford just to earn rewards, otherwise you can get yourself into debt trouble pretty quickly.
Leaving Free Money on the Table
Speaking of free money, on an even larger scale than credit card rewards that you could be missing out on is your work offering any company matching retirement contributions. Say they will match dollar for dollar to 6%, contributing any less than 6% would be missing out on money that could be worth tens or hundreds of thousands of decades down the road. If you aren’t able to fully max out your retirement contributions, at least find a way to put in what your work is willing to match.
Not Going Grocery Shopping
It’s nice to stop for coffee and a breakfast sandwich on the way to work in the morning, grab a bite to eat to get out of the office at work, or take the family out for dinner instead of having to cook, but that adds up. Sure, it’s nice to have someone cook, serve, and cleanup after you, but there’s a reason why restaurants can get away with what they charge, otherwise there would be no need. While you may not be able to cut out altogether right away, but if you can go grocery shopping and do a little meal prep, you can be saving hundreds of dollars a month, not to mention a few pounds off for healthy eating will go a long way.
Paying Credit Card Interest
As mentioned earlier, credit cards can actually make good financial sense, but that’s if they’re used responsibly. If you charge more than you can afford and can’t pay the full statement balance by the due date, interest will start to kick in, and at 16% APR with a balance of thousands of dollars, the minimum payment will do little to chip away at the balance so extra-large monthly payments will have to be make in order to rid yourself of the debt burden.
Not Booking the Right Travel
Sure, everyone is an expert and you’re probably thinking how I am any different, but the only opinion I will offer is to shop around, both on the travel sites and direct to the airline or hotel’s website. Many people see all the travel site commercials, or searching for booking, thinking those are the best deals available, but I’ve had better luck going direct. After all, the travel sites have to make money somehow so there’s no way they would offer lower prices than what you could get otherwise. Just do your due diligence with booking travel and your wallet will be thankful.
Buying a New OR Used Car
It’s probably next to impossible to avoid going without a car, especially if you live in an area where I do where there is virtually no public transportation, but that doesn’t mean you should buy a new or used car for that matter. Lease payments are low and offer you the option of getting a new car every two or three years, instead of dealing with a 6-year loan of sky-high payments, auto repairs, for what, to own it for a little bit until you get a new one?