As financially savvy adults, we generally are careful with our spending. By taking care to shop around to make sure we are getting the best deals, or negotiating our expenses so that we are getting the absolute lowest price available, we can ensure that we are not spending our money foolishly. But there are times when we overspend, and those items may seem innocent, but over time they really add up. Here are the top five ways we tend to overspend, and how to combat them.
Impulse Buys
We all fall victim to the impulse buying on occasion. And most often it happens in two different ways. The primary way we end up spending more than intended is when we go shopping without a list. Whether it is for groceries, home goods, or anything else, shopping without a list makes us prone to buying items we don’t really need. Even if it is on sale, if it is not something you need, then you are overspending. The second way is grocery shopping when hungry. Studies show that we buy more when hungry, and often those are pre-made (more expensive) items.
Failing to Bargain
We all know that when shopping for big purchases, like a car, a house, or any time you buy from a private seller you should bargain. What most people don’t realize is that you can bargain at any store you walk into. Just because the price is listed on the item, does not mean the price is set. So if you see an open box, a display item, a slightly damaged item, or anything like that, you can get a cheaper price. Check out Mr. Money Mustache’s way of getting the best deal on home improvements.
Recurring Payments
I love automating my expenses. When I organize my bills so that I don’t have to worry about my utility payments my life is much less stressful. But there are times when setting up those recurring payments can come back at us. For instance, if you join a gym and set it up so that you pay the fees automatically, you might forget to cancel them when you no longer use the gym. Many people overspend by forgetting to cancel their subscriptions when they no longer want or use them.
Luckily to help save money you can sign up for Trim. This is a free service that will actually help you find subscriptions that you no longer need and will cancel them on your behalf. But that’s not all. They can also help you negotiate lower prices on things like your cable bill or even car insurance.
Online Shopping
Studies have shown that if you shop online, you generally buy more than if you went to the store. I love shopping online because it’s easy, convenient, and almost always cheaper than buying at the store. But for many people that ease is a pitfall that causes them to buy a whole lot more than they actually need. If you shop on your tablet, instead of a laptop or desktop, you are even more likely to spend extra.
Self Rewards
I am all for enjoying life and splurging on the things that make me happy. But often we reward ourselves for doing things that we should be doing without complaints all along. For instance, if you have to put in a few extra hours at the office this week, you may feel that you deserve to eat out and have a couple beers. But those extra hours are what you signed up for with the job, and they aren’t worthy of a reward. Rewarding yourself with dinner out and a couple of beers each month can easily rack up over $500 per year in needless spending.
Wrapping it Up
Most of us do a great job of watching our expenses and making sure that we aren’t overspending. But sometimes there are items that slip through the cracks and we forget about being frugal. Take a few minutes to review your spending for the last month or two. Are you overspending in any areas? A simple lifestyle change could save you into the thousands of dollars per year.
I’m a big fan with online shopping before, I spend lots of money to it because it was too easy to choose an item. Until one day, I said to myself that I should stop doing it.