It happens to the best of us.
That you are broke today when you can swear that it was just yesterday that you were at the ATM.
In an article on Yahoo Finance, Farnoosh Torabi analyses 5 things that many of us do and that contribute significantly to that deep, dark abyss of brokeness. Below are some excerpts from that article.
1. Food: One messy money mistake is filling up our grocery carts with way too much. Researchers at Harvard Business School have found that we tend to go overboard on groceries, especially at warehouse clubs, where we think we’re saving money by buying in bulk, but not always, especially considering how much excess food goes straight into the trash. To save, map out your meals so that you go to the grocery store knowing exactly what you need for the week and stick to your list, and avoid buying too many perishables in bulk. Also, take advantage of your freezer. It’s not just for ice or frozen waffles. Everything from meat to bread to fresh vegetables can stay preserved here for a later time.
2. Premium Fuel or “V-Power” or whatever fancy name your petrol station may call it: Buying premium gas when all you really need is regular is a financial no-no. The experts at Consumer Reports say most engines are designed to take regular gas, with an octane rating of about 87. Filling up with premium – when your car doesn’t require it – doesn’t improve performance, either.
And you could save that KES 10 or so that your regular petrol station prices their “extra super premium” fuel brand above the regular fuel. For a 40 litre car, that translates to a saving of KES 400 per filling.
3. New Technology: It might make you the cool kid on the block, but it’ll cost you a pretty penny. Many companies charge up a fat premium for first edition gadgets, but prices often drop substantially after a few months, and most certainly by the following year.
Consider waiting until at least the second generation has emerged when all the bugs have been fixed and prices have sunk. Or, opt for refurbished electronics. Many still offer a manufacturer’s warranty and you can save you at least 10 percent.
4. Gym Membership: Do you really maximize your gym membership? According to the Stanford University Graduate School of Business, 80 percent of gym members with an unlimited monthly plan overestimated how often they would actually hit the treadmill and were better off paying for a pay-as-you-go plan. Some tips to get the most bang out of your fitness buck include working out with a friend. Researchers at Oxford University have found that by exercising with a friend, you’re more likely to put those running shoes on – and enjoy the workout more!
5. Music downloads: And finally, for music lovers, downloading tunes for $2 a pop is sort of wasteful spending since you can get most of your favorite hits for a lot less through monthly music plans on sites available at Spotify.com and Napster.com. For example, if you download an average two to three songs-per-week, a $10 unlimited monthly plan gets you more music and puts more than $100 back in your wallet by year’s end.
What do you think? Are you falling for these money mistakes?