Bad habits can cost you extra money in the long run. Small purchases here and there can add up over the course of a year or a decade. The good news is, once you realize what your bad habits are, you can make changes to your lifestyle and start saving money. Here are some bad habits that are costing you money.
Buying Coffee at a Cafe
A $5 latte every morning will add up to $1825 a year and you need an afternoon pick-me-up that’s another $5 daily, a total of $3650 a year. If you make your own coffee at home or even buy a high-end espresso machine for your office, you can cut your coffee costs by at least 50%, giving you more money to invest, save, or spend on other necessities.
Smoking Cigarettes
A pack of cigarettes can cost up to $12. A pack a day for a year will cost you $4380. Multiply that by five years and you will have spent $21,900, enough for a brand new car or a down payment on a home. Cigarette smoking is a bad habit that is detrimental to both your health and your bank account. Spending money on a copay and make a doctor’s appointment to help you quit. This will save you thousands of dollars in the long run and even add years to your life.
Eating Take-out Food
Take-out food is neither healthy for your body nor your wallet. For the price of convenience, you are subjecting your body to a high-sodium, high-fat, and low-nutrition diet that can lead health issues in the long run. Take-out food also dramatically increases the amount you spend on food compared to grocery shopping and cooking at home. If you spend $10 on take-out daily that adds up to $3650 a year. If you eat take-out for lunch and dinner, that will doubles your take-out spending to $7300 a year. Imagine the trips you could take or the stock market returns you could make with the money you wasted on take-out food. This is a bad habit that can cost you your money and your health.
Not Paying Off Your Credit Card Every Month
Credit cards are an excellent tool to raise your credit score and earn rewards. There are sign-up bonuses, offering hundreds of dollars in rewards. Travel bonuses can earn you free plane tickets. It may be tempting to just pay the minimum every month; however credit card interest rates are higher than any other kind of debt. This is equivalent of taking out a loan with 25% interest. Compare that with mortgage loans which range from 3-5% on average and student loans which average 10% on the higher end. Borrowing money from credit cards is not a good deal. Pay off your credit cards entirely each month; this can save you thousands of dollars in the long run.
Not Going to the Doctor
We all know that health care in the United States is expensive. An X-ray that costs $25 in Italy might cost you $1000 out-of-pocket in the U.S. It is tempting to skip your yearly visit to the doctor if everything seems fine. But ignoring warning signs about your health may cost you more in the long run. A $50 copay will seem like chump change compared to the five root canals and teeth extractions that you have to do because your one cavity became infected and spread. Knowing how much medical care can cost, it is important to keep your health in top shape. The first step is to pay for comprehensive health insurance, even if you may not think you will need it. The second step is to go to your scheduled check-ups. In the long run, you will save tens, if not hundreds, of thousands of dollars.
Overpaying for Rent
In major cities, a small studio apartment in a fifth floor walk-up can cost $2000 with utilities. Getting a roommate can cut your costs by half. For the price of privacy and having an apartment all to yourself, you can be spending tens of thousands more in housing costs each year. If you get into the habit of doing whatever it takes to keep you rent costs down, whether it means living with roommates or even moving back home with your parents, you can get a head start in your retirement fund, travel fund, engagement ring fund, or whatever it is that requires long-term saving. Spending 60% of your paycheck on rent is a bad habit that will cost you lots of money.
Not Paying Taxes
It is tempting to not report all the money you earned to the IRS to save on taxes. However, if you get audited, you will end up paying much more in fines or even end up in jail for tax evasion. Not paying your taxes dutifully will cost you money and your reputation in the long run.
