Many believe the big bills, mortgage payments and paying off a car loan use up all of their money. Actually, the little every day purchases use up quite a bit of your monthly income. You do not realize what you have spent when it is only a few dollars here and there.
Paying for taxis, mocha lattes and sports cable packages contribute to over spending. Others who rein in pricey habits are seeing the savings gobbled up by gas prices or mounting debt. However, even among the relatively comfortable, rising prices are upending habits they have long known were costing too much anyway.
Cutting back does not have to mean a joyless existence, however. Simple measures like using cash instead of credit cards can make people more conscious of how much they spend. Taking a few hours to scan cell phone and cable bills for unnecessary charges can save, too. Shopping around for better deals when contracts run out is another good idea.
Most people are not even conscious of how much they spend. Celebrity Ed McMahon is a perfect example. The one word that is turning the former television announcer from the “big time” to beggar: Plastic.Published reports suggest that Pamela, Ed's wife of 16 years, is literally spending him onto the street. They say that she is completely "oblivious" to their cash troubles and shops as if their life depended on it. Her AmEx bill is legendary -- the couple reportedly owes them nearly $750K. That is an issue for Ed's friends, who have mixed feelings about bailing him out. They do not want to see their 85-year-old friend foreclosed on, but they are also not thrilled about supporting Pamela's passion for Prada.
In some cases, as with McMahon, the cost of a person's habits can add up to more than basics like rent and transportation. That's not to say the little habits will always determine your financial fate but that do have a big impact. Other factors — mortgages, bad interest rates, credit card debt — are likely the bigger drains on your budget. However, when times are tight, it is a chance to review all spending, big and small.
Giving up pricey routines does not have to stop you from enjoying life. Make your own coffee drink at home rather than spend $5.00 at Starbucks. Instead of buying pre-packaged Lunchables at around $4 apiece, make your own using deli meats and cookie cutouts; your kids will not know the difference.
To save money on gym memberships, take the family on bike rides. There may be no more trips to Chuck E. Cheese, but you can have even more fun taking picnics to the park.
Keep these tips in mind and consider some of your own, keeping in mind that those little expenses eventually may bite you in the checkbook.
Friday, June 20, 2008
Subscribe to:
Posts (Atom)
