If you are one of the millions of Americans living paycheck to paycheck building a savings or even paying down your debt can seem like a pipe dream. For many Americans you may even find yourself going in the wrong direction and even adding more debt to your life which as we know can make things much more difficult in the long run. You may not even realize how it’s possible that you are gaining debt every month but odds are it just a few simple things that can really add up.
1. Eating Out
Eating can be fun and tasty but can also be extremely expensive. A recent study found that the average American family spends about $3000 a year at restaurants. That’s $250 a month that could be used for gas, utilities, credit card payments, or building a savings.
2. Being The Big Shot
Have you ever been out with a group a friends and uttered the words “The Next Round Is On Me”? While that is a nice a certainly generous thing to do, can you really afford it? If not then you are setting yourself up for failure. While it may not be fun and you may not be the life of the party if you are constantly racking up debt every month then it is just not worth it.
3. Buying Deals You Don’t Need
We have all seen sites like Groupon and Living Social offer amazing deals to a variety of places but just because you get a deal doesn’t mean it is a smart decision to buy one. A staggering amount of Groupon deals that are sold are never actually used before the expiration date. That is because most people buy deals in the off chance that they will use it down the road and end up forgetting about it until it is too late. When you see a deal from one of these sites the first thing you should as yourself “is this something I really need or want right now” if not then hold off on buying it. Spending no money saves a lot more than spending money at a discount.
4. Lottery Tickets
We have all had the dream of our numbers being called and becoming the newest “instant millionaire”, winning the kind of money where we can walk into work the next day and give a big “I QUIT” to our boss. Unfortunately, the odds of winning a lottery are less than getting struck by lightning. Frankly put it is an absolute miracle if you win and definitely not something to bank on. The smarter option is to save and invest the money you would normally spend on the lottery. Overtime you will see real results that will greatly impact your finances.
5. Not Having a Budget
This is the biggest mistake people make when they are getting into debt. How can you know what you should be spending when you go out if you don’t have an accurate idea of what you are bringing home and what bills you have. If you have a budget written down on paper or on spreadsheet on the computer you are 80% more likely to spend within your means every month. I like those odds. If creating a budget seems difficult or time consuming have no fear, there are several great apps now you can use right on your smart phone to keep track of your money.
If you are guilty of any of these things and truth be told most of are at some point then hopefully you can use this a guide to get your finances in order, avoid debt, and save for the future.