3 Money-Wasting Habits You Need to Ditch Immediately

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Certain habits of yours may be harming your finances. Read on to learn more. [[{“value”:”

As of late 2023, a whopping 63% of Americans did not have ample cash reserves to cover an unplanned $500 expense, according to SecureSave. If your savings are in a similar boat, perhaps you’ve fallen into certain habits that are harming your finances. Here are three habits that could be causing you to waste money rather than bank it or use it to meet your financial goals.

1. Impulse spending

The potential for impulse spending exists everywhere. You could walk into the grocery store for milk and eggs and come out with a half-full shopping cart. Or you could run into Target for a package of underwear and a birthday card but emerge with a $150 credit card tab.

You can’t exactly control the fact that certain items tempt you. If you’re someone who loves clothing, and you walk into a store that sells clothing, you may be tempted to walk away with a new shirt, sweater, or pair of lounge pants.

But while you can’t control your brain’s desire to have something, you can control the actual purchase of the item in question. So the next time you’re shopping and you’re tempted to buy something on a whim, ask yourself, “What will I have to give up to purchase this item?”

The $40 sweater you’re eyeing might force you to give up a night out with friends. The $20 extra in snacks you threw into your supermarket cart might result in interest on your credit card, and too much of that could force you to have to cut your spending in another area.

Also, think about impulse buys in terms of your time. Spending an extra $40 on a whim to buy a couple of couch pillows for your apartment might seem fairly innocent. But if you earn $20 an hour, those pillows just cost you two hours of your time. When you think about it that way, they may not be worth it.

Finally, if you’re shopping online, force yourself to follow the 24-hour rule for unplanned buys. Basically, you leave the item you want in your shopping cart but don’t checkout, and then you revisit it 24 hours later. If, by then, you’re still convinced you want or need it, it’s less of an impulse buy and more of a thought-out decision.

2. Boredom shopping

It’s not unusual to browse sites like Amazon when you’re up at night struggling to fall asleep or you’re stuck waiting for your friend at a lunch spot who’s running 15 minutes later. But the problem with using shopping as an activity to alleviate boredom is that it could lead you to spend money you’re supposed to be reserving for other purposes.

Going forward, stop shopping simply because you don’t have anything better to do. And instead, find something better to do.

If you’re lying awake at night unable to sleep, go to your desk and pay some bills. That might get you groggy pretty quickly. And if you’re meeting a friend who’s chronically late, bring a book along so you have a way to stay occupied until they arrive.

One of the smartest moves you might make is deleting your credit card details from sites like Amazon so it’s harder to complete transactions. You may be someone who shops out of boredom. But if you’re in bed at midnight trying to sleep and your credit card is downstairs, you may decide to forgo your purchase rather than walk down a flight of stairs when you’re tired.

3. Keeping up with the Joneses

Keeping up with the Joneses is an age-old practice. But these days, social media makes us even more likely to covet our friends’ new cars, vacations, and furniture.

But while it’s easy to see why you’d want your home to look as nice as your neighbor’s, or why you’d love to join your friends on a weekend getaway and blow off steam, the reality is that you have no idea how they’re affording those purchases. And chances are, at least some of your friends aren’t. Rather, they’re putting those expenses on their credit cards and paying exorbitant amounts of interest to lead a more indulgent lifestyle.

Before you spend money to keep up with the people around you, make a list of the top things you might buy that could improve your life. And save up and spend your money on those things — not the things your friends are showing off online.

Wasting money could make it hard to meet your financial objectives. It’s important to recognize the habits of yours that lead to wasted money — and take steps to break them.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon and Target. The Motley Fool has positions in and recommends Amazon and Target. The Motley Fool has a disclosure policy.

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