One of the hardest aspects of getting a hold of your finances can be getting rid of that little voice inside your head that’s wasting your money. You know the one, the one seeing the big house your friend just bought or the fancy new car your neighbor is driving and saying, “we need that too”. We are constantly bombarded by social media (a whole other aspect of your life you should change) with post after post of vacations, concerts, restaurants and everything in between making it nearly impossible not to compare ourselves with others. What we can do however is question this little voice. Really ask it, “Do I need a big house?”, “Do I need that fancy car?”. The answer is simply a resounding “no”, because you can’t afford it, and more than likely neither can they. Too many people waste too much of their money trying to look successful when all they are really doing is sabotaging any chance they have at it.
Big house, big bills: One of the biggest mistakes people make is buying too much house or more often, a house that is too expensive. Besides the overall prices, there are many other costs that come with a bigger\more expensive house. More than likely your property taxes will be higher and it’s pretty hard to reduce them. Heating\cooling the house becomes that much more expensive and with that comes bigger furnaces\HVAC units, meaning more money when it comes time to replace them. Can’t have an empty room in your house, so now it’s costing even more to furnish (potentially unused) rooms. There are dozens more way the big house can cost big bucks not just at the initial purchase, but in ongoing maintenance too.
Fancy car, same result: Cars (especially buying a brand new one) are another huge waste of money. For one, there is nothing wrong with buying a used car, in most cases, they are still in very good, if not better, condition and they are a fraction of the cost. Luxury cars (or even luxury models of more affordable cars) are in a league all their own. Yes, all the bells and whistles are nice to have, but that’s all they are, nice to have. That and a drain on your wallet. You don’t need the heated seated, built in GPS, sunroof, or any other fancy accessory. With or without the accessories or fancy hood ornament, they all serve the same purpose and get you from point A to point B. One just costs hundreds more a month than the other.
Pay for experiences, not locations: Vacations are always a big contest. You went to Disney; we’ll go to Paris! They went of a 5-day cruise, we’ll do 10! Not only this, but everyone wants to stay at the biggest, fanciest hotels, the place you shouldn’t be at unless you’re sleeping. What you should really focus on are the experiences you get to have. Do you want to go somewhere where you’ll remember stand in long lines in the sun in order to get a 45 second ride or would you rather remember the morning you got up and hiked up a mountain and relaxed with your family?
Eating a hole in your wallet: Eating out less is one of the easiest ways to save money. Cutting back on one or two meals out a week could make a big difference. A meal out for a party of two could easily cost anywhere from $50-$100, and if really like having a full course meal, apps, drinks and dessert the savings could be even more. For $100, you could feed a family of four for a few days, not just one meal. Cooking is easy to learn, hard to master, but that’s the beauty of it, you don’t need to be a master. Learn to cook a few basic dishes and then add from there. Your wallet and your waistline with thank you later.
Alexa, find me the top wastes of my money: Don’t get me wrong, I love technology, it’s awesome at making our everyday lives a bit easier. However, technology isn’t worthwhile if it’s not solving a problem or serving a purpose. What I mean is, if the tech you own is sitting around because its only used for a very specific reason or it seemed cool to have, then that was wasted money. A new programmable coffee brewer is useful, but an $500 drone is just an expensive toy. I’m not saying we don’t need tech toys but find ones you’ll use often enough and won’t break the bank.
Wearing Nike doesn’t make you an athlete and Gucci won’t make you a celebrity: Just like with cars, fancy clothes don’t mean a thing. Look at some of the richest people in the world and you’ll find them wearing jeans and a t-shirt. Do you know why? You guessed it; fancy clothes are a waste of money. Wearing the latest Air Jordan’s won’t give you the ability to dunk, although it might be easier with a lighter wallet. Wearing a designer dress won’t get you invited to the Oscars either. There are plenty of affordable brands that will give you the same results as the high-end ones.
While we’re on the topic of clothes, go through your closest and pick out anything you haven’t worn in a year and get ready to be amazed with yourself. These are all unneeded purchases and is the same as throwing money away.
The point of all this is, most people are simply trying to keep up with others around them, but should we be? More than likely the family with the big house and fancy car is up to their eyeballs in debt and no house, car or vacation is worth it. Wouldn’t you rather let go of the need to appear successful, in order to actually be successful? Once you do, you have just taken the first step to getting a hold of your finances and really being able to live the life you want to live.
Jeff is a fan of all things finance. When he’s not out there changing the world with his blog, you can find him on a run, a Mets game, playing video games, or just playing around with his kids.