About · Press · Contact · Write For Us · Top Personal Finance Blogs
Featured In:

Breaking Four Expensive Habits That Cost You Money

By Mark Riddix

Finding ways to save money is critical to every person achieving their financial goals.  It could be the difference between a comfortable retirement and having to work in your latter years.  Every day, millions of people are robbed of their hard-earned money due to expensive habits. Today, I would like to take at look at some of these habits. These four habits will cost you money and get in the way of your financial independence.

Smoking

Smoking is one expensive habit to pick up. Not only is smoking bad for your health, it’s bad for your wallet as well. Smoking raises the price of health insurance and decreases the money in your bank account. According to MSN Money, the average price for a pack of cigarettes nationwide is $5.00 and only getting higher. A pack of cigarettes is already costing $7.50 in Massachusetts and $10.00 in New York. If you smoked a pack of cigarettes a day, than you would be spending $35.00 per week. This would come out to $1,820 per year and over $54,000 over a 30 year period. That’s assuming that cigarette prices stay stagnant, which we all know won’t happen by a long shot. What would you do with an extra $54,000 dollars?

Gambling

Gambling comes in many different forms, but the end result is always the same. The house always wins. People gamble away their paychecks playing casino games, cards, online games, slots, and lotteries. Millions of people travel to Atlantic City and Las Vegas each year to gamble in casinos. Everyday people lose money playing lottery games such as Keno or trying to win the Mega Millions jackpot. A sad fact about lotteries is that the people that participate in them are always the ones who can least afford it. Low income individuals are the biggest players of lotteries. 82% of lottery revenue comes from low income individuals. Gambling is an addictive habit that can end up costing you more than you bargained for.

Impulse Purchases

Have you ever gone in a department store looking to buy one shirt and left with bags full of clothes? While it’s okay to splurge on occasion, it shouldn’t become a habit. Most people engage in impulse shopping. Impulse shopping occurs when purchases are made out of emotion. A good example of impulse shopping is going to the mall and coming home with an item that you never planned on buying. Department stores count on shoppers making purchases due to impulse buying. Remember to always shop with a plan and to stay within your budget. An easy way to avoid impulse shopping is to only take enough cash for your preplanned purchase. That way if you are tempted to go over budget, your wallet will make the decision for you! Alternatively, you can make a list that you adhere to while shopping. This can really come in handy when you go to the grocery store hungry and end up buying everything that looks good.

Convenience Stores

Do you regularly pick up items from your local convenience store? Do you pay your bills or get money out of the ATM at your local gas station? You will definitely pay more for the “convenience” of convenience store shopping.  Stores like 7-Eleven, Royal Farms, and Wawa’s charge huge mark-ups on most food items, snacks, and toiletries. Convenience stores charge hefty transaction fees for routine services. ATM fees at convenience store can be as much as $3, plus your bank’s fee. Bill payment services and money transfers also carry charges higher than most grocery stores. Going for a road trip? Pack a lunch or snack instead of stopping by one of these convenience stores. It’s often healthier too!

Do you know of any other habits that are dangerous to your finances?  Have you recently conquered any financially devastating habits?  If so, what did you do to stop it?

(photo credit: purpleslog)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, Your Financial Playbook.

Related Articles

Comments

  • http://www.yourfinances101.com/blog David/Yourfinances101

    I think the raw numbers under those categories may hit home for those of us still guilty of some of these pleasures.

  • Em D.

    Impulse Purchases are probably my big weakness. To counteract them I don’t open or use purchases for a week. If I’m still enamored and am not regretting the purchase, I’ll keep it. If not, back to the store it goes.

  • http://www.maketodaypayday.co.uk Kate

    I have a problem with Impulse purchases as well, but have gotten really good at telling myself no. It doesn’t always work, but at least I try. Another expense that can really add up is alcohol. Since drinks and smoking seem to go hand in hand for many people, I was suprised you didn’t mention this as well.

    • Mark Riddix

      Alcohol could have definitely made the list.

  • http://www.fatwallet.com Laura Pagles

    Impulse purchases lurk in more places than the brick and mortars. Whenever I’m planning a purchase, I set up email alerts to help me find a deal. The trick is to turn those alerts off once I’ve completed my search. My inbox (and hot deal alerts) has lured me into impulse buys on toys, clothes, electronics. Clean out the inbox, unsubscribe, don’t open the retailer’s email if you’re not planning a purchase!

    Laura Pagles
    @fatwallet

    • Mark Riddix

      Good points.

  • http://madsaver.com Mac

    Drug stores seem to be popping up everywhere lately, and if the products are not on sale, they are usually marked up quite a bit. If you can spend the extra minute to go to the grocery store, do it. But I guess one needs to pay for convenience sometimes.

  • Elizabeth I

    I think impulse purchases are far more common at the grocery store those bags of potato chips and pints of ice cream add up.

  • Gina

    Alcohol purchases can do quite a bit of damage also! My husband and I enjoy a good bottle of wine, and have found that it can become quite costly! So, we have set a budget for the wine, drinking a bit less than before, and not being quite so extravagant on the purchase.

    • Elizabeth I

      Wine Spectator is a great reference for good but inexpensive wines. The wines listed below have above 80 points and are less than $15.

      http://www.winespectator.com/dailypicks/category/catid/1

  • http://madsaver.com Mac

    Going to Vegas seems to be a very affordable vacation lately with the low airline rates & the competitive hotel prices…however, it is too easy to waste the savings on gambling. Save some money by gambling on the penny or nickel slots and be sure to get your free drinks, then hit the affordable buffets and half-price shows.

  • not given

    I had a friend who liked to gamble, she would go out and play bingo 1-3 nights/week. She said it was more fun than anything else she could find to do for $20. Every time she won cash, she would stash it back and when she had enough she would tell her DH, let’s go to Vegas next week!

Links monetized by VigLink
Close