4 ‘Normal’ Financial Habits That Are Actually Making You Lose Money
Recent surveys have shown almost half of all Americans aren’t saving enoughmoney to sustain them long-term.
That’s not difficult to believe if you’ve ever looked at your bank account balance at the end of the month, and wondered where all your money went.
It sometimes feels as if there’s a leak in your bank account, and no matter how diligent you are with budgeting, expenses crop up and seem to siphon your extra cash.
Many of us want to save more.
We have financial goals we’d like to reach.
But between paying the bills, putting food on the table and putting money away for retirement, we can’t seem to find extra wiggle room in the budget for savings.
But the truth is, most of us have a few bad money habits we can change, to free up some of that cash we work so hard to earn for savings.
Do you have any of these bad money habits?
1. Inflating your lifestyle
Think back to the last time you got a raise.
What did you do with that money?
Most people use their extra income for what financial experts call “lifestyle inflation.”
Lifestyle inflation happens when, instead of saving the extra money you make, you put it toward something to improve your lifestyle.
This is a bad financial habit that will end up costing you big-time in the long run.
For example, let’s say you received a raise of a dollar an hour each year.
If you work full-time, you work, on average, 2,000 hours per year.
So your annual increase would be $2,000.
If you received a dollar per hour raise every year for five years, you’d earn $4,000 more at the end of the second year, and $6,000 more at the end of the third.
Instead of buying a new vehicle with that money or freeing up room in your budget to visit the spa more often, start saving it.
If you were to invest that money, it would be working even harder for you.
Can you imagine how much money you’d have to pad your savings accounts if you simply saved your extra money each year?