4 Spending Habits Keeping You Broke
Stop Wasting Your Money On These Immediately
My younger brother made more money than me and had 1/3 of the debt I did, and I still had more money than him.
It turns out that my brother spent his hard-earned money on things that were only going to weigh him down while I used my money for things that built my wealth. The shocking revelation came while asking him about specifics about his finances. Most of his purchases were ego-driven, and nothing was necessary.
After more than four years of reading, researching, and living out financial literacy, I have compiled a list of the top 4 worst purchases a person can make and why.
1. Do Not Buy New Vehicles
If you are in your 20’s or even your 30’s, do not even think about buying a new car. Think about why you would need a new vehicle. My father tried to convince me when I was 23 years old to buy a brand new vehicle because “it won’t have many miles on it, and will last you for years.”
That might sound like a great reason to buy a new car, but think about why you would need a vehicle in general. You only need a vehicle to get from your home to another place like your work, market, mall, etc. Getting from point A to point B.
According to Nerdwallet.com, the average American car loan payment per month is $530.
Buying brand new vehicles is a waste of money, hands down. They are very pricey, and their value plummets as soon as you pull out of the parking lot. You will more than likely be stuck paying hundreds of dollars a month just to own one, and for what?
I bought a 2,000 Toyota Camry with cash, and it had 91k miles on it. I still use it today, and I never had to pay a monthly loan to have it. It might not look sexy, but I felt great saving hundreds of dollars a month.
2. Stop Eating Out Every Night
According to thesimpledollar.com, the average American household spends $232 a month eating out at restaurants and fast food.
On a cold day in January of 2018, I sat down to look at my budget. I always felt like I was coming up mysteriously short at the end of the month with my bank account. I couldn’t understand why I stayed at the same amount from month to month.
Upon investigation, I sadly realized I was spending nearly 15% of my income eating out at restaurants, diners, fast food, and gas stations.
What makes this section hard to deal with is how optional this spending is. At least with a new truck, it serves a purpose. Eating food out is just a more expensive way of doing what you could do in your own living space. I bought 18 eggs in a carton for $2.99 at Giant, but for some reason was spending $8 at a diner to eat their eggs. I spent $12 on spaghetti, but a box of spaghetti costs maybe 1/5 of the price.
The lesson here is that you can save hundreds of dollars by making your food at home. You may want to sit down and look at how much you spent eating out this last month. It may shock you.
3. How Much Entertainment Do You Need?
According to venturebeat.com and allconnect.com, millennials spend roughly $112 a month on video games and $37 on streaming services.
While video games and watching tv is okay, how much of it do you need? At this point, the average millennial is spending over $150 a month on fresh entertainment. They are constantly consuming new movies, shows, and games, while the average amount spent on books is down to less than $25 a year.
It appears that American millennials are far less interested in learning new skills and growing intellectually and are growing in their passions for mind-numbing activities. America is one of the most over-worked countries on earth, with the average adult is striving to work 40 hours a week with less than two weeks of vacation a year.
It is no wonder that millennials are willing to spend their money relaxing in front of a tv.
4. How Much Are You Spending on Alcohol and Coffee?
According to wfla.com, the average American millennial spends over $300 a month on alcohol. In total, that means over $3,600 a year is spent on drinking.
What also makes this section even trickier is the hidden fees also associated with alcohol that most people do not consider. Nearly no one drinks alcohol on an empty stomach, which means they are also eating more. Please refer to section number 2 to review spending on food.
You must also consider another indirect result of drinking, which is spending under the influence. According to huffpost.com, the average shopping spree while under the influence of alcohol is around $400.
With over $3,600 being spent on alcohol, consider the food that more than likely accompanies that cost, your further spending habits while under the influence.
Finally, according to foxnews.com, millennials spend over $1,100 a year on coffee or $3 a day on average.
Recapture Your Finances
While the information presented in the article is from various sources, it is apparent that you could potentially save thousands of dollars a year by spending smarter. Open up your bank app now and start scrolling. You may be surprised at how much you spent that you were not aware of.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.