We’re pretty sure you want to retire when you hit 60 or 65 because who doesn’t? But if this is your goal then how you spend your money today and whether or not you live frugally could make the difference between retiring then and having to work until you basically too sick to work anymore. The problem is that it only takes a few bad habits to stop you from achieving financial independence and a nice retirement and here are nine of those habits that may be robbing you of money you’re not even be aware of.
At the end of the day you’re tired and stressed out and cooking is hard work. So, what you do? You either eat out or get takeout food. In either case, if you forgo this habit you could save hundreds or maybe even thousands of dollars a year. Just consider this. If you eat out three times a week and spend just $20 each time that’s $60 a week, $240 a month and $2880 a year. If you were to put that money away for 20 years then, not even including compounding interest, you would save $57,600. When you add in the interest you would earn you’d probably have more than $70,000, which would certainly help you enjoy those golden years.
Changing the oil in your cars every 3000 miles
You know what the automakers and all those quick oil change companies tell you which is that you should change your oil every 3000 miles. Do this and theoretically your car would last much longer. However, you could save a fair amount of money if you change your oil less frequently. The California state government even says, “The old standard of 3,000 miles is woefully out of date and no longer applies to most cars. Many cars, even older models, can be driven up to 5,000, 7,500, 10,000, and even 15,000 miles before needing an oil change”.
Buying only brand names
Manufacturers want us to believe that brand-name products are better than generic products. And there are cases when this might be true. For example, if you spend $100 on a pair of Nike athletic shoes they’ll probably last longer and fit better than if were to buy some knockoff brand at $30. But this is often not the case and is especially true when it comes to grocery items. Generic or store brands usually taste as good as brand-name products and cost anywhere from 30% to 40% less. So if you’re in the habit of buying only brand-name products you’re wasting money you’re not even aware of.
Drinking bottled water
If you get your water exclusively from a bottle you could be wasting as much as $1000 or more per year. In comparison, if you drink healthy tap water it should cost you about $.50 per year. Just think that you could save $999.50 a year just by changing this one habit. And if you’ve been drinking bottled water because your tap water has too much of a chlorine taste, just fill up a bottle from your faucet and then put it in the refrigerator overnight. Problem solved!
Buying expensive gourmet coffee
Do you spend a few dollars every day at your local coffee bar or doing drive-throughs at your nearest Starbucks? Here’s another area where you’re wasting hundreds of dollars a year that you could save just by brewing your coffee at home. If you go to a Starbucks or a local coffee shop just three times a week and spend three dollars each time, which is typical, you’re basically wasting $9 a week or more than $450 a year.
Paying fees to use ATMs
We know how convenient it is to just pull into the nearest ATM and withdraw some cash. But if you’re using ATMs that are not in your bank’s network you’re wasting money, especially if you do this several times a week. If your bank doesn’t have ATMs near where you live or work, think about changing banks. Or just suck it up and drive those few extra miles to your bank’s nearest in-network ATM.
Do you think you can’t haggle over prices or that there’s something wrong with this? Then think again. There’s nothing wrong and nothing to lose by asking for a lower price. All the merchant can do is say “no”. And, of course, there are some things that are non-negotiable such as groceries, cable and utility bills. However, there are other instances where you could save money by haggling. This can be especially true with jewelers and small shops. These merchants often have high enough profit margins that they’ll give somewhat on price in order to get the sale.
Buying stuff new
Do you always buy everything new? There’s no law that says you need to do this. When you buy things that are brand-new you may be paying as much as double the price then if you were buy them used. That beautiful, all-wool sweater in its original packaging costs $50. But if you were to go to one of those stores that specialize in gently used clothing you might be able to buy the equivalent of that sweater for $30 or less. There’s also absolutely no reason to buy a new car anymore. You should be able to get a great car that’s just two or three years old – and coming off lease – for substantially less than you would pay for it new.
Making impulse infomercial purchases
The Electronic Retailers Association says that the infomercial industry brings in more than $400 billion a year. When you fall for one of those infomercials featuring a product you believe you just couldn’t live without and that’s “not available in any store,” you could end up with a shoddy piece of merchandise that you’ll never use or use only frequently. Regardless of how tempting that product might seem, take a deep breath and, in the words of that old anti-drug commercial, “just say no” to yourself. The odds are that you can find something comparable in a store near where you live and for much less than what you’d pay for that infomercial product.