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5 Money Habits That Sound Good (But May Hurt Your Wallet)

April 25, 2012

What can you do to save money? Developing good habits is key! Keep organized, keep your goals (spending and saving) in mind, and don’t fall for typical consumer ploys. Here are 5 money habits that sound good, but may hurt your wallet:

1. Only Buying What You Need, When You Need It

It seems logical, to only buy what you need it when you run out. But if you do only buy items when you need them, chances are you’ll be paying full price or slightly less. The best use of your money is to purchase items you will use/need when it’s at its lowest price. Toilet paper may be on sale for $1 per roll when you run out, but if you can stock up when it’s 65 cents a roll, you’ll have a significant difference in your bank account! Be careful what you stock up on – you don’t want anything that may spoil or may just be a fad. Try keeping a notebook or journal of items you tend to buy often – and at what prices. Knowing what’s a low price for an item may help you plan for the future!

2. Looking For Sale Signs

You’ll save money if you browse the clearance rack and look for those yellow or red sale signs throughout the store, right? Not if you’re buying an item just because it’s on sale. Sticking to a list and choosing an item on sale is a smart use of money, but buying a pair of pajamas or a hairbrush just because it’s a steal can dig into your bank account. Try to avoid looking for good prices unless that particular item is on your “I need” list to avoid impulse shopping.

3. Cashing In On Every Deal

While most “deals” are, in fact, deals, you can actually hurt your wallet more if you buy as many deals as possible. Within the last month, there was a deal at Walgreens that resulted in free chapstick – plus the price of sales tax. So every tube of lip balm ended up costing anywhere from 5 cents to 8 cents – which is a great deal. Some “extreme couponers” bought up hundreds of these tubes – and ended up with $50 in taxes paid on these “free” chapsticks (most likely an unbudgeted expense). Keep in mind, it’s not how much you save, but how much you spend that counts in your bank account!

4. Buying The Cheapest, Regardless Of Source

Not everything is created equal. While some brand names may unnecessarily charge more for an item while another “unknown” may charge less, there are some that you get what you pay for. Stores and online sites are the same. Evaluate your larger purchases (and even some of your smaller ones), and determine the risk factor if you don’t from a store or buy a brand that is tested and rated by other consumers.  Learn or write down return policies, customer service numbers, or customer representative addresses and leave a review for others once you have a chance to determine your satisfaction level. Maintenance and additional products to help make your more expensive investments (car, furniture, house) last longer can also be important expenses to consider. Your priorities (having something that will last a long time, an interim product, an unbreakable item, an imitation to get the look without the price) will help you determine whether you should buy the cheapest product available.

5. Not Being Generous (aka Not Giving Away Your Money)

There are many good reasons to give away your money. Sound ironic? Look at the benefits: a) tax writeoff. b) helps boost & maintain the economy when you spend it locally. c) non-profits and charities can often gain more items for the less fortunate with a monetary amount than the average individual can get with the same amount of money. d) some occupations (haircuts, food service, taxi service, delivery workers) depend on tips as a part of their income, resulting in a lower cost for your items rather than if the price was built in across the board at the highest tip. e) tithing and promoting goodwill can gain you goodwill as well!

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