If you overspend, you are not alone: the average American spends $1.33 for every $1 earned. Our spending habits have become so routine that we often forget the ways we are spending money on unnecessary things. Here are some tips to break bad habits, and set you up to achieve financial success.
1. Automate your monthly budget
Tracking your finances can be difficult, so using a service like Mint can help you understand where your money is going automatically. These services will tell you how much you are spending on restaurants and entertainment versus essentials. Once you are armed with this information, you can make an informed choice about how to scale back.
2. Cut back on coffee and soda
Did you know the average American spends nearly $2,000 per year on coffee and soda? There are simple ways to cut back your spending on these non-essentials. We recommend that you pick one day a week when you treat yourself to a cup at your favorite café, and brew at home the rest of the time. If soda is your thing, skip it when you’re out at restaurants, and buy in bulk a warehouse store.
3. Pack a lunch
Two thirds of Americans spend money eating out at lunch, with the average cost of workday lunches adding up to $1,924 per year. You can cut back by planning out your lunches on Sunday and bringing in a packed lunch each day.
4. Ditch paying retail
When we shop for fun we are susceptible to impulse purchasing, which can severely impact our spending. Before you buy something, determine if you really need it. When buying clothes, look for sales. One way to upgrade your wardrobe without breaking the bank is to focus on mixing different accessories with your current clothes to create a whole new look.
5. Take advantage of free wellness services
Americans spend $700 per year on gym memberships. Do you know how many people NEVER use those memberships? 67%! Rather than throw your money away, you can look into community centers that offer free gyms and fitness classes. You can also get active by running or biking in your neighborhood. Need a class to stay motivated? YouTube has thousands of free classes that can get you into shape from the comfort of your home.
6. Cut the cord
Cable can cost you around $100 per month. One way to cut back is to call your cable provider to see if they have any promotions and ask about more economical plans. Automated services like BillFixers can even do the negotiating for you. If there’s only a few programs you like, try a streaming service to get your favorite shows at a fraction of the cost.