7 habits that are sending you broke right now (and how to stop them)
With the cost of living surging, it's time to take a close look at your spending. Are you guilty of any of these bad money habits?
Inflation in Australia sits at 7.3%, its highest rate in 3 decades. According to Finder data, 48% of Australians say they'll have to drop their living standards due to inflation and the rising cost of living.
If you're looking for ways to rein in your spending at the moment, here are 7 habits that could be costing you.
Shouting your friends
While it may be the easy or nice thing to do when going out with friends, shouting friends adds up and could end up setting you back hundreds of dollars a year or more.
2022 Finder research found more than 1 in 4 (27%) of us have felt obliged to split the bill evenly at a restaurant despite ordering less.
Here are some options to pay with friends when going out:
- Go to places that offer split bills.
- Try to find restaurants with QR code payments.
- Opt for cafes where you can pay for your food when you order.
- Use money transfer apps such as Beem It and create a group where you can evenly split the bill automatically.
Wasting your leftovers
It might not seem significant, but your food waste could be costing you over $1,000 a year, equivalent to around 6 average weekly trips to the supermarket. This could be money spent on a weekend away, repaying any debt, adding to your savings or put towards your mortgage.
Aside from the amount this is costing you, food waste negatively impacts the environment. When it goes into a normal landfill, it decomposes and releases methane into the atmosphere which is a major contributor to climate change.
To reduce your leftovers, you could try using a shopping list, putting your leftovers in different meals the next day and making smaller portions so there is less wastage.
Not paying yourself first
One of the best things you can do for your savings is to pay yourself first. This means allocating a specific amount of your pay to go straight into your savings account before you spend it on anything else.
This amount varies for each person. For example, a university student living at home with little expenses will be able to save more of their pay than someone who needs to pay rent or a mortgage.
Paying for a gym membership you aren't using
2022 Finder analysis found Australians waste money on gym memberships they barely use, with 43% of respondents using the gym twice a week or less. If you're going to the gym less frequently than this, it might be time to reconsider if it's still worth the cost.
If you're not going as often as you thought you would, work out how much it would cost to cancel your membership and pay for casual classes instead. These will cost more as a non-member but will be cheaper than a monthly fee if you don't go regularly.
Not buying second hand
Purchasing items second-hand can save you a lot of money and it's good for the environment too. You can find second-hand clothes, furniture and appliances by op shopping and purchasing off Depop, Gumtree and Facebook Marketplace. It's also not uncommon to find brand-new items when shopping second-hand.
Keeping your appliances on
With energy prices skyrocketing, it's becoming crucial to switch off any appliances if you're not using them. Light switches, washing machines and air conditioners should all be turned off if they aren't in use. Finder analysis found 69% of Australians switch off their house lights to save money.
Not comparing prices
Before committing to a purchase it's worth comparing prices from different retailers to find the best price you can get. Whether it's comparing energy retailers or a pair of shoes, every comparison can save you. Some stores also match or beat the price if you can prove it's cheaper elsewhere.
For example, if I look up second-generation AirPods, Apple and JB Hi-Fi sell them for $219 whereas Officeworks does at $185. A quick search saved me $34.
Apart from new purchases, it's also important to review your ongoing payments such as your mobile phone plans and health insurance. You may be on a mobile phone plan paying for more data than you use or you might notice that bundling your health insurance could allow you to find a cheaper deal.