Nowadays, more and more people are placing importance on financial security and literacy. Some have already built a $10,000 emergency fund over the past two years. Others are already considering the next practical step in managing their budget. While the current market sentiment is riddled with uncertainty and volatility across different industries, at the very least, most can rely upon and fall back on their savings. Savings can be your fallback if any untoward economic disruption happens in the months ahead.
However, while there are success stories, there’s still a vast majority of people struggling to save even a relatively small amount in their high-yield accounts. This struggle might be due to bad spending habits getting in the way of their target goals. While a few one-off purchases might seem like nothing, what most people fail to realize is that these receipts start stacking up over time. Eventually, they will leave you speechless with a total amount beyond expectations.
Saving’s Good, but It Gives a False Sense of Security
Many fall victim to the false sense of security saving provides. While there’s merit to assigning a portion of your net income to build an emergency fund, too much money spent on other things will offset any financial benefit gained. Because you typically save first, the days that follow are subject to the feeling that anything else spent afterward is free real estate and won’t put a dent in their finances.
In consequence, their expenses start catching up with the money set aside in their savings account, further increasing the risk of withdrawing a tiny bit to meet some excess bills they incurred over their spending spree.
Saving can get you in a better financial situation. However, you can’t overlook common areas that cause cash outflow, specifically your groceries, online shopping, and utility bills.
1. Groceries: How You Might Be Eating Your Money Away
Food is essential, and we’re not telling you to go on a crash diet for the sake of saving a few extra dollars. Still, there are cases when your meals for the week drain away from your savings. So to help keep you from entertaining lousy grocery shopping habits, you must practice buying in bulk with a plan. Choosing seasonal goods and preparing your grocery lists according to sale cycles can also help you save a bit in this regard.
Buying in Bulk Isn’t Always Smart
People often believe that buying in bulk will help shave off a considerable fraction of their grocery expenses. Still, when you don’t do it with a plan, you might end up spending a bit more. Continually evaluate your current pantry, what you need, coupons you could use, and what you have an excess inside the fridge to avoid wastage. And with a short checklist, you’ll be surprised at how much you can save.
Seasonal Goods and Sale Cycles
Apart from buying groceries in bulk and cutting down on your trips to the supermarket, you should try your best to choose seasonal goods and follow sales cycles. Fruits and veggies in season will always sell for cheaper instead of buying something out of season. Taking note of the regular times when discounts appear throughout the month can help crunch the numbers down even more.
2. Online Shopping: When Convenience Doesn’t Make the Cut
Nothing comes close to swiping on your phone, going through a catalog, and finding what you’re looking for in less than an hour. But if you start going over your purchase history, you might notice that the convenience factor won’t cut it. This is especially true if the expenses make up a large portion of your take-home pay.
One Step Away From Impulsive Purchases
There’s nothing wrong with buying stuff online. But given how easy and accessible it can be, playing into its hands too much might put you in the same league of impulsive purchases soon enough. At first, it might seem like you’re alleviating stress through retail therapy, but that’s a fine line between a shopping addiction and justifiable purchases.
3. Vampire Electronics: Racking Up Unnecessary Utility Bills
Last but not least, while many have a terrible habit of taking their electronics and appliances for granted, most are infamous for being vampires at night. They quietly rack up unnecessary utility bills when you least expect it. Sure, some don’t use up as much electricity when not in use. Still, the small amount can accumulate over the eight hours your spend asleep, creating an unnecessarily expensive utility bill by the end of the month.
Switch to Energy-Efficient Alternatives
An excellent way to combat vampire electronics is to switch your current appliances into energy-efficient alternatives like LED lightbulbs or induction cooktops. Likewise, suppose you don’t have the spare money to invest in big purchases. In that case, you could also make a habit of unplugging everything right before you go to sleep to help cut back on gadgets that aren’t in use.
Monitoring Your Spending and Increasing Savings Go Hand in Hand!
Overall, you can’t save an agreeable amount of cash if you’re spending is out of place, and that’s because both of them go hand in hand. And if you can’t shake off the feeling to use some cash for yourself, why not try more productive and self-improvement-related activities like professional leadership training or building your investment portfolio? These activities might seem like you are spending more money, but they’re all worth it in the end.
Saving money just doesn’t cut it these days. You have to be smart about your purchases too. Keep this blog post in mind to help you become better at managing your finances