Spending Consciously

Spending Unconsciously? Wake Up to What It’s Costing You.

Expenses are up. Investments are down. The caca has hit the fan and people are scrambling to figure out where all the money is going. How times have changed.

When everything was rolling along hunky-dory, it was easy to get into the habit of spending money. The full-on cable package with a side order of sports and movies for dessert was an easy buy when money was aplenty. The Extra-Lean Latte a couple of times a day became a must-have. And lunches out a few times a week was a well-deserved reward. Thousands of bucks out the window without a second thought. Unconscious, habitual spending with only a momentary payback.

If you’re buying Starbucks coffee a couple times a day and dropping $4.75 a pop, that’s $2,280 a year. You don’t have to give up your fix completely; switch your caffeine dealer or sip smaller and send the rest to your emergency fund, which likely could use a boost.

Lunches out are another way unconscious spending gobbles up money. A lunch entrée can run to $15. Add in a cold beverage, and a cup of tea with the caramel praline cheesecake and you’re shelling out $30 with tax and tip. Do that three times a week and watch $4,500 a year go down the toilet.
Grocery shopping is a completely different experience than it was when our parents were raising us. We buy cherries off-season for $10 a kilo. We buy mangos, star fruit and avocados in the depths of winter. We buy organic. And we pay a pretty penny for all these choices. How much of what you buy is purchased on impulse? Boy, those hothouse tomatoes smell great, don’t they? If you don’t shop with a list, you’re leaving yourself susceptible to all the contrivances retailers have come up with to separate you from your money. Become conscious of what you’re buying and you can cut your grocery bill by 30 percent. If you’re currently averaging $1200 a month, that’ll save you over $4,300 a year.

Most people spend more on their insurance than they should. Insurance is yucky, after all, and having put it in place it’s easier to just keep paying whatever you agreed to and not think about it too much. Want to save some money? Most insurers offer a multi-vehicle discount, which can add up to ten percent off both cars. 
Switch your home policy to the same insurer and save another five percent. Ask about age, low mileage, anti-theft, occupational and auto club discounts, all of which could save you money. And raise your deductibles to $1,000. Potential overall savings? About 35 percent, which could translate into $1,260 a year.

Are you still paying your mortgage monthly? Really? Where have you been? EVERYONE knows that by simply switching to an accelerated weekly payment you can save buckets of money. On a $300,000 mortgage at 8 percent amortized over 25 years, your savings would be more than $90,000 over the life of the mortgage. Wow! So easy.

Carrying a balance on your credit cards? About half of us do. And, sadly, many of us are unconscious enough not to know what it’s costing us. Time to get those statements out to see what we’re paying. More than 9.9 percent? With your terrific credit history, you should be getting a better deal. Throw your weight around to have your interest rate lowered. Failing that, get a cheaper card and transfer your balance. A $5,000 balance at 18.9 percent costs $945 a year in interest. Get the rate down to 9.9 percent and cut costs by almost half. Better yet, get a teaser rate of 2.5 percent, and save $820 a year. That’s got to be worth a call.

How many hours a day do you spend watching TV? The average is about 4 hours, but most active people with busy lives get to the tube far less frequently. If you’re not a potato-couch, then the $100 a month you’re spending on The Ultimate Cable Package is a waste. Never mind having the whole world at your clicker-tips. Buy only what you watch. Spend half as much and you’ll have another $600 in savings.

When was the last time you looked at your cell phone plan to see if it’s still working for you? If you’re on the road and don’t have the right long-distance package, those long-distance charges can add up fast. Ditto if you go over your limit on minutes. With the cell phone industry in upheaval, and everyone fighting for their piece of the pie, you can negotiate hard to get lots of costs – texting, voice-mail, caller ID – waived completely. Do the kids have phones too? Save $16 a phone on four phones and you just stuck $768 back in your pocket.

Are you still paying per minute for long distance? With kids at university and family all over the world, long distance minutes can add up fast. The latest rage is VOIP – Voice Over Internet – and it can save you a bundle. It’s easy too. Find the right provider and they’ll do all the work for you.

Smoking a pack a day eats up $3,650 a year. Sipping three bottles of moderately priced wine a week swallows $2,500. Ordering in pizza a couple of times a week so you don’t have to cook after you finally get home from hockey or dance or karate with the kids will eat $1,700 of your income. It’s easy to spend money on the conveniences and pleasures of life without giving it a second thought. But it’s also very expensive. As we watch all the essentials of life go up in price, it may be time to take a second look at the conveniences we take for granted to see if they’re still worth the money. If they aren’t, break your old habits and save some money.

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