Sense & Centsibility Blog

What Is Your Bad Habit Costing You?

Most people have formed some kind of bad habit, especially when it comes to finances. I doubt I'm the only one, but my bad habit is dining out too much sometimes. When it happens, it's because I'm busy or tired or sick and I have zero desire to go to the grocery store after work or on my day off when I'm in one of those states. Not to mention, then I have to actually fit cooking in my schedule. And right now with a new puppy, it's even tougher.

The cost of my bad habit

I did the math the other day - no judging allowed - and the week that we didn't cook once (unless you consider cereal and toast "cooking"), my husband and I spent about $180 on food. In a week...yikes. We had dinner out/ordered in 3 times; we only ate out for lunch twice and just had snacks or didn't eat lunch the other days. Again...a puppy runs my life right now so when she sleeps I don't move. That equals no lunch sometimes.

Now luckily my bad dining out habit only goes on for a week or less. Then I get to the grocery store and get back on the cooking and bringing lunch wagon. But if I didn't get back on track, we'd be spending an obscene amount on food each month.

Find your bad habit

You may not even realize you have a bad financial habit right away. Take a look at what you're spending each month on 'non-necessities'. It could be getting coffee from the coffee shop; it could be alcohol. Or maybe you spend too much at Target or the mall. Whatever it is, start tracking what you're spending on your bad habit(s) and add it up at the end of the month.

Break the cycle

HabitsOnce you figure out how much you're spending on your bad habit(s), it's time to take action. Make a conscious effort to avoid whatever it is you spend a little too much money on. In my case, since I realized how much we spent on food in that one week, I am better at planning out our weekly meals. It might be Sunday or it might be Monday, but we're more consistent about it and we're not frivolously getting take-out 3 times a week anymore.

Figure out what you need to do to kick your bad habit. If your issue is overspending at the coffee shop, you could try to avoid going there at all. Or, if you don't want to give it up completely, instead give yourself an "allowance" so that you don't overspend. Either way, just make sure you stick to the rule you create. Then, use that "extra" money you're not spending for something that will help you improve your financial situation.

Put your money to better use

When I think about what I could have done with the money I really didn't need to spend on dining out, about 10 things pop into mind. To name a few, I could save for new flooring as our carpet is on its last legs or I could add to emergency savings. I could save it for my hair appointment next month or start saving for a trip...etc., etc.

One of the biggest mistakes any of us can make is not planning ahead. Thinking about the future and when you might need a little extra money is really important if you want to be financially stable.

So if you are saving $50/month by not going to the coffee shop, that's awesome. But don't let it get sucked into a black hole of spending somewhere else. The only way to make good use of it is to use it to set it aside or earmark it for paying more toward debt. If you have no debt and already have plenty of emergency savings, think about where else it could go. Maybe into retirement accounts or savings for future car repairs or veterinary bills. I've never heard anyone say "I have WAY too much money set aside in savings." So a good rule of thumb is to build it up as much as possible because something unexpected is bound to come up.

Setting up a budget can be a great way to find even more money to save or pay toward debts. If you'd like help with that, call LSS at 888.577.2227 for your free budget counseling session. Our counselors can also help you come up with a plan to pay off debt faster and save money. If you want to get started online, just click here.

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.