1. Buying Lunch … and Coffee and Snacks Everyday
If you live or work in a city (or your commute brings you past five different drive-thrus), buying lunch out can be irresistibly easy — and problematic if your habit starts absorbing the money you’d prefer to save for something else … like a Caribbean vacation to escape the frigid cold this month.
“There’s nothing wrong with buying the occasional lunch or snack on the go,” says Stephany Kirkpatrick, CFP, Director of Financial Planning at LearnVest Planning Services. “But when you’re aiming to conquer major financial goals, this is one of the easiest areas to cut back without seriously sacrificing your quality of life.”
While an ideal habit would be to avoid last-minute food purchases altogether, that’s not always realistic. “If it’s too much of an adjustment to go cold turkey, create a budget in the LearnVest Money Center and decide beforehand how much you’ll spend — and then challenge yourself to spend $10 less next month,” recommends Kirkpatrick. “Be sure to allow yourself one day a week when you do grab lunch — and savor it, so bringing lunch the other days won’t make you feel like you’re missing out.”
How Much You Can Save: If your lunch-buying habits are anything like that of the typical American, you probably buy a lunch that costs around $10 twice a week, spending about $1,000 a year in the process. If you cut your habit back to one lunch per week, you could save around $500.
2. Neglecting to Get the Best Rate
Sure, paying your bills on time is a good habit — but paying more than you should is a bad one.
Case in point? Astronomical cable bills for the 300-plus channels that you never have time to watch. And you’re not alone: The average monthly American cable bill, including phone and Internet services, was $128 in 2011 — that’s triple the price from 10 years ago.
“Things fall into three buckets,” explains Natalie Taylor, CFP with LearnVest Planning Services. “Things you can control, things you can influence, and things you can’t control or influence. Monthly bills fall into the second bucket, so use your influence wisely.”
You can start by poking around your provider’s website to see what kind of introductory and special rates they currently offer or visit lowermybills.com, which looks at your region and current bill to automatically search for better phone and Internet offers. Once you have an idea of what you could pay instead, call your provider to see if there’s any wiggle room on your rate.
How Much You Can Save: “Lowering your bills is a great way to find extra dollars for your goals without having to sacrifice your lifestyle,” explains Taylor. If you can negotiate only $10 off your monthly bills, you’ll save $120 a year. If you go a step further and cancel your cable to save $100 a month, that comes out to $1,200 a year. Put that cash into a retirement account and you could help grow your savings!