Saving for a rainy day almost seems impossible in this century primarily because of all the payments and purchases made every month. However, the most significant adversary to saving is a lack of discipline during everyday activities. This article covers some of the spending habits that could be robbing you of millions in savings.
Failing to Budget
When was the last time you planned a budget? If the answer is close to never then you should know that it is stealing your millions. As a consumer, spending without an appropriate plan will not only cause you spend beyond your limits but also dip into your savings. Failing to plan your budget also makes it harder to identify prices inflation on specific items which can lead you to spend more when you do not need to.
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Making late payments is the first step towards decreasing your monthly savings. Late payments throw you off your budget, meaning that you may spend more than you intended to. It also lowers your credit score which in the long run will cripple your ability to get a loan for more significant purchases such as a house or a car. An easy way to avoid this is ensuring that payments for internet, cable, and other services are automated.
Paying the minimum of your credit card balance
Most credit cards require payment of 1% to 3% per month, and while the 1% is a tempting offer, it could cost you a lot of money in the long run. For example, if you were to pay $8400 on a credit card that charges 18% then it would cost you $20,615 in interest. Paying the maximum can be difficult especially if you have a tight budget; a right way to do this is by arranging a transfer of the full amount from your checking account to your credit card company every month.
Even with a tight budget impulse buying will always cross your mind more than once. Giving in to impulse buying will not only steer you off your budget but also dip heavily into your savings. Though is no permanent solution to impulse buying you should always try your best to stick to your budget and only buy what you need. You will notice that you save much more with a little discipline.