While most people would like to maintain a sizable balance within their savings account, the reality is that a number of things prevent us from putting away as much as we would like. Though many are able to still do their fair share of saving, for others, extenuating circumstances and specific habits make it harder to save. Far too often, it is that latter group that has trouble identifying where their difficulties stem from. Though there are many possibilities, many people get tripped up by the same things. Whether it’s overspending or failing to realize unnecessary charges incurred, consider the hazards below and whether or not they may be hindering your saving efforts.
Paying with a Card
In this day and age, it seems more people use their debit and credit cards to purchase things than any other payment method. Almost all transactions, from online shopping to the purchase of a simple cup of coffee, are completed with the swipe of a card. And though this does make the process of buying things much simpler, it also presents a challenge for those actively trying to save money. When we rely on cards for transactions, unless we keep note of our charges it becomes difficult to keep track of everything. This can result in a surprising bill or statement by the end of the month. Changing things up and using cash instead will not only allow you to keep up with what you’re spending, it will increase your sensitivity to unnecessary purchases.
Most people fall victim to getting into the habit of regularly dining out. Whether at a restaurant or fast food establishment, paying for meals once or even twice a week quickly adds up. And even more alarming is the fact that with so many options, not only in terms of types of food but desserts and quick sides as well, it is easy to think nothing of making several small purchases. The answer to undoing this particular expense is to treat meals out as a special occasion. Whether to celebrate something or just to treat yourself every now and again, it is important to cut out that unnecessary cost as much as you can. There will be times in which you may have to eat out but reducing your consumption to just once or twice a month could save you a few hundred dollars a year.
A growing number of subscription-based services including streaming and music platforms are offering new users competitive trial deals that last a select amount of time. As people are given the opportunity to enjoy the service, what they often fail to realize is that many companies will continue service beyond the trial period, charging individuals standard fees without notice of the change in billing. That allows the increased expense to fall through the cracks and continue costing you until you spot it and put an end to it. This can also arise in the event individuals have subscriptions that they use infrequently or have been meaning to cancel but have not. Be sure to progressively look through the services you receive and determine which can go.
Unnecessary Energy Use
For a lot of people, trying to find what is contributing to the difficulties they face when it comes to saving involves looking no further than the comfort of their own home. As people go about cooking, cleaning, and simply living within their houses, they will consume a fair bit of electricity. But beyond that, the tendency to waste energy is something that many are prone to. Whether it’s leaving lights on in empty rooms, taking long showers, or constantly relying on the air conditioner, there are many things in homes that can contribute to significant energy costs and result in a high electric bill at the end of the month. With a greater amount needlessly going towards paying down bills, less can be allocated towards savings. To address this, energy usage needs to be taken into consideration as do a number of strategies for saving. Though the effectiveness will differ from one to another, finding a strategy that works could help to increase savings drastically.
Keeping Up With Friends
Especially for younger people, the disparity between personal income and the kind of money your friends and loved ones bring in can be significant. This difference enables some to engage in more costly activities like trips, while forcing others to be more frugal. Failing to acknowledge this difference and trying to keep up with others may enable you to engage in some extravagant experiences, but the end results is little to no savings left over. In order to counteract this, it is important to stop following in the path of others and instead prioritize spending through budgeting. Take into account income as well as mandatory expenses and plan out what you can spend and where. You will not be able to do everything you want and it may take some time for you to get around to the things you have planned for, but being meticulous in your budgeting and resisting extravagant temptations will allow you to do what you want while saving at the same time.
Douglas Keller has been a financial expert for 20 years, helping people reach financial stability. He now provides personal finance tips on his blog Peak Personal Finance, where he helps people save money on their bills every month.