How Your Daily Habits Affect Your Paycheck

Big or small, some financial habits can zap a solid financial plan and leave smart savers with empty wallets. To avoid buyer’s remorse and similar guilt about neglecting your finances, you need to be informed about which habits might be costing you extra. That’s why I spoke to business leaders and financial pros about the habits that are having the biggest negative impact on your wallet.

Not sure where to cut your spending? These are the habits where you could save money instead of letting them cost you.

Last updated: Jan. 15, 2020

Not Cutting the Cord

“Despite loving all the content streaming services out there, so many people still waste money on cable and satellite services,” said Steve Gickling, founder and CEO of ETLrobot. “Now, many people just have both and are afraid to cut the cord because of local news and sports. In reality, they can get new types of antennae services and a wide array of content, including sports and local content, without cable or satellite, saving a significant amount of money each month.”

Leasing Your Car

A 2019 cost-comparison report by car cost site Edmunds found that the overall cost of leasing a compact SUV can be over $5,000 more than the cost of buying a similar car used, and it is about $7,000 more than buying the same car new when you take equity into consideration.

Drop the lease and invest the difference, and you can boost your overall financial scenario.

Your App Addiction

On the list of things to waste money on, smartphone apps are a big one. Those $1.99 purchases seem inexpensive enough, but they can snowball — especially if you have kids who are adding to the overall purchase price or frequency.

Consider free app downloads exclusively or cap yourself and your family with a monthly app budget.

Overbuying Perishable Foods

“Many people spend too much money on buying groceries that they end up not using,” said Jon Bradshaw, former CTO of Appointment. “That perishable food goes to waste because meals and food purchases were not planned effectively in advance each week to make the most of what was purchased. This behavior contributes to food waste and also further impacts the amount of money they could be saving.”

Using Paper Towels To Dry Your Hands

This might seem like an insignificant habit, but the cost of this behavior can really add up over time. Evan Sutherland, co-founder of Budgeting Couple, said that using paper towels to dry your clean hands in the kitchen is costing you hundreds every year.

“Designate a hand-drying dish towel in your kitchen,” he said. “You’ll save money and the environment. Win-win!”

Shopping Without a List

People who shop without a list can easily fall prey to shopping “creep,” the phenomenon that happens when you add “just one more thing” to your cart several times per trip. Having a list keeps you from running afoul of your spending plan and spending more than anticipated.

“[I sometimes go] to Costco for some paper towels, and I somehow leave with $200 of goods — has this ever happened to you? We live in a world filled with tactics to upsell or entice consumers to buy now,” said Joe Martin, vice president of marketing for CloudApp. “That, combined with mobile pay, has created a financial web that can quickly ensnare consumers.”

Your Brand Loyalty

Brand-loyal customers often get the first crack at coupons and special deals, but they’re also more likely to spend on things they don’t truly need. People who shop exclusively for a particular brand are at risk of sabotaging a financial plan, said Tai McNeely, co-founder and financial educator at His and Her Money.

“I know someone that loves Apple products so much that every time a new product comes out, he has to get it,” she said. Buying an expensive product you don’t need just because it’s newly available is a surefire way to overspend.

And for some products, it’s simply a waste of money to buy a brand name over a generic brand.

“Entire advertising and influencer campaigns are built around subtly hinting to consumers that particular brands offer better-tasting or performing products,” said Ben Huber, co-founder of DollarSprout. “In reality, they’re made with the exact same ingredients or components as their generic counterpart wrapped in less visually-appealing packaging. The markup on everyday products can range from 20% to 100%, so one can save over $1,000 per year across a diverse range of products [by opting for the generic version].”

Having Wine With Dinner

Buying wine with dinner is a pricey proposition. Restaurateurs routinely mark up bottles by about three times the wholesale price — sometimes more. Consider a BYOB-friendly restaurant instead or skip the wine altogether when dining out.

Keeping Your Gym Membership

Your unused gym membership — even one you managed to save on — is not a good deal if you’re not actually using it. Attracting members who won’t actually come work out is a strategic move by many gym owners, according to NPR’s Planet Money.

Most Planet Fitness gyms, for example, can hold about 300 people, but the average location has 6,000 members, the show reported. The reason this business model works is because only a small fraction of members use the facilities on more than a semiregular basis.

The secret is to know yourself. If you’re not going to work out, don’t sign up to make gym payments.

Shopping at Convenience Stores

“Almost everything is more expensive when you buy it at a convenience store because they’re charging you for, well, the convenience,” said Leslie Tayne, financial attorney and author of “Life & Debt.” “For example, a bottle of water may be as much as $3 at a convenience store when you can buy a whole case at the grocery store for $10. While sometimes it can’t be avoided, being cognizant of whether you need to buy something from a convenience store can help you save money.”

Fix Your Finances: The Ultimate Financial Planning Guide

Wasting Time on Your Phone

Not only can apps be a waste of money, but they can also be a waste of valuable time.

“The average person wastes three hours, 15 minutes per day on their phone,” said Stephen Dalby, founder of Gabb Wireless. “This amounts to millions in unproductive time that could be used to make money, cultivate better friendships or spend more time with family. Your phone is stealing your time.”

Neglecting Maintenance

Any solid spending plan should budget for home and auto maintenance costs. Worn weather stripping, a poorly maintained HVAC unit or a clogged fan belt can create a bigger financial burden later on than the immediate cost of routine maintenance.

Not Keeping Your Paycheck Deductions in Check

Some companies give their employees access to in-office conveniences, such as swiping their ID at an on-site cafe, and then the employees will have these expenses automatically deducted from their paychecks. You might not realize how much you’re really spending since this money never even makes it into your checking account.

“It’s a terrible habit to get into,” said Amy Beardsley, freelance writer and founder of EarlyMorningMoney.com. “It’s quick and easy at the moment, but your long-term financial security can be put in jeopardy by spending more than you think at the company cafe. Unless you’re keeping track, there’s no way to know how much you spent. Your resulting paycheck might not be enough to cover your living expenses, which can tempt you to break out your credit card and create a downward spiral into debt.”

Shopping at High-End Grocery Stores

“One daily habit that can significantly affect your finances is where you shop for groceries,” said Andrew Herrig, owner of Wealthy Nickel. “We used to live within walking distance of a very nice high-end grocery store, and would often pick up food for dinner or a few days’ worths of groceries. Now we try to only shop at a more affordable grocery store like Aldi, where you can often get the same quality for much cheaper.”

Drinking Fancy Coffee

David Bach’s famous “Latte Factor” concept made Americans aware of what their coffee habits are doing to their bottom lines. A $4 cup of joe per day comes out to almost $240,000 when compounded at 6% for 40 years.

Not Checking Your Credit Report

People with top-tier credit ratings qualify for the lowest finance rates when car or home shopping. Over a 30-year term, a quarter of a percentage point can add up to thousands of dollars.

Check your credit history regularly and clean up any problems as soon as they arise.

Going To Happy Hour

It’s easy to get in the habit of relying on food and drink to decompress after a long day at work. “I’d grab a drink with friends more often than I realized,” said Jim Wang, founder of Wallet Hacks. “Spending $20 for a bunch of cocktails with friends isn’t a big deal until you do it half a dozen times in a month and you wonder where that money disappeared to.”

Ignoring a 401(k) Match

Roughly one-third of employees don’t save enough to receive the full 401(k) match provided by their employer, according to a 2019 report by Vanguard. That’s like telling your boss you didn’t want a pay raise this year.

It’s recommended to max out your 401(k) contributions, but at the very least you should contribute enough to get your employer’s match.

Not Using a Budget

It’s easy to spend extra money when you don’t have a plan for each of your dollars. A budget can be boring, sure, but it can also net you a beachside retirement 10 years early if implemented correctly. And once you start budgeting for things that matter, you won’t be wasting money on things that don’t.

“We live in a society where it seems like more is more, rather than less is more, when it comes to our personal belongings and how we eat,” said John Occhipinti, CEO of Naturebox. “To live a more mindful and purposeful life we need to spend less and focus our attention on a few things we cherish.”

Going Out for Lunch

There’s no need to waste money on lunches out when a brown bag lunch is cheaper and, if packed correctly, can be more nutritious.

“I’ve found that bringing my lunch to work every day has had a profound impact on my family’s finances,” said Mike Collins, founder of DadSense.co. “I used to be lazy and I bought lunch at work every day. At an average cost of $10 per day, I was dropping $200 a month on cheeseburgers and chicken wraps. When I smartened up and realized I could cook just a little extra each night and bring leftovers for work, I started using those savings to pay down our debt and invest for our future. Some simple planning and minor adjustments to our meals now save me $2,400 per year!”

To make sure you stick to this habit, try packing your lunch the night before.

“By preparing most of your essentials the night before a fresh workday, you buy yourself time in the morning and reduce the likelihood you will rush out the door without being prepared,” said Tom Blake, blogger at the personal finance blog This Online World. “Ultimately, this reduces the likelihood you’ll have to eat out, leaving more money in your wallet.”

Using Store Credit Cards

Retail stores are notorious for offering a discount on an initial purchase if you sign up for the store card. Although that 10% or 20% discount might sound sweet when you’re standing at the checkout line, signing up is not always a good idea.

The store isn’t offering the discount with sign-up just to be nice, said Daniel Zajac, a certified financial planner and partner with Simone Zajac Wealth Management Group in Exton, Pennsylvania. “They know that most of their customers will not pay off the card and they will make up the discount and more in interest payments,” he said. Instead, Zajac suggests shoppers bypass the discount and start to track expenses and debt.

Overdrawing Your Account

Are you wasting money on overdraft fees? America’s largest banks raked in $11.45 billion in overdraft fees and nonsufficient funds fees in 2017, according to data from the Federal Deposit Insurance Corp. Stop lining the pockets of bank presidents and set up overdraft protection. Or, monitor your accounts to make sure funds for any outstanding checks are covered.

Not Having Health Insurance

“Young people, especially men, often think that they’re invincible and don’t need health insurance,” said Steven Fox, a San Diego-based financial planner with Next Gen Financial Planning. “However, unexpected tragedies like a car accident or bad sports injury could result in significant financial setbacks on top of the other problems.”

College-age students can remain on their parents’ health insurance plans until age 26, sign up for their school’s health program or buy low-cost catastrophic coverage from commercial carriers, he added.

Regardless of age, not having health insurance can be costly. Not only will you have to pay out of pocket if you do need medical attention, but you can be hit with a tax penalty if you’re not covered.

Ditching Your Change

For people who still use cash when out and about, the amount of change received on a daily basis can add up. Don’t just disregard your coins. Instead, save them in a jar and periodically bring them to your bank for sorting and deposit. You’ll be surprised at how much you save over time.

Get Organized: How To Create a Budget You Can Live With

Not Checking In With Your Partner

Couples who don’t make a plan to check in with each other about spending choices run the risk of ruining a financial plan. Elle Martinez, the founder of Couple Money, suggests checking in for purchases over a certain dollar amount (she likes $100).

“Double-dipping into the joint account can quickly drain things, so keeping one another in the loop is essential,” she said.

Smoking Cigarettes

As many as 34.2 million Americans smoke cigarettes, according to the Centers for Disease Control and Prevention.

“I can’t believe people still smoke in 2020 with not only the health [problems] tobacco can cause, but the financial strain as well,” said Brittany Kline, personal finance expert and co-owner of the blog The Savvy Couple. “With the average [cost] ranging from $10 to $15 a pack, those who smoke a pack a day are spending close to $300 a month — $3,600 a year!”

Give up this habit and save your money — and your health.

Signing Up for a Premium Auto Loan

“Being approved for a $20,000 auto loan doesn’t mean that your budget for a car is $20,000,” Fox said. That money needs to be repaid, he added, and young people pay a very high cost to borrow at an early stage in life. “Spending should be determined by a well-thought-out budget, not by the size of a line of credit,” he said.

Falling For a Bait-and-Switch

Ever bring a sale item to the cash register only to find it’s not actually on sale? Ever take a cab and get hit with a fare that’s higher than expected? Avoid the bait-and-switch by saying “no” to items that don’t turn out to be on sale and by asking cab drivers for a fare estimate upfront.

Making Impulse Purchases

Adding a pack of gum to your shopping cart at the grocery store checkout might not seem like a big deal, but habitual impulse shopping is. Online retailers, for example, have added new tricks to entice you to return your abandoned digital shopping cart — such as by emailing you reminders and promotional offers — and making it easier than ever to make purchases, like offering in-store pickup.

“Now, online retailers hit you up with special savings beyond Black Friday and Cyber Monday,” said Chalmers Brown, CTO of Due. “It’s easy to spend lunch breaks on your phone, clicking and buying these deals for things you don’t really need. Also, retailers are sending text message deals and promotions while you are in stores or passing by, driving up that impulse to buy more often.”

Those unplanned expenses can easily ruin a well-planned budget if not kept in check.

“The habit that has had the biggest impact on my finances is simply waiting [to make] purchases,” said Marc Andre, personal finance blogger at VitalDollar.com. “When I want to buy something, unless it’s a necessity that I need right away, I wait 24 hours before buying. Most of the time, during the next 24 hours I’ll decide that I really don’t want that item enough to justify the cost. If I do feel like it would be a good purchase after 24 hours, I can get it with confidence that I won’t have buyer’s remorse.”

Carrying Credit Card Debt

Double-digit credit card interest rates are the norm, which means that people who carry a balance are taking a serious hit to their wealth. “By making the minimum suggested payments, you’ll continue to pay that high-interest rate for many years,” Zajac said. “I encourage clients to get their debt paid off as quickly as possible. Once that is complete, direct that money into another savings or investment vehicle and start amassing real wealth.”

Paying Yourself Last

“I’ve been guilty of this, which is why I preach about it all the time,” said Amanda Abella, business coach for millennials and author of “Make Money Your Honey.” “If I don’t give myself money first for savings, personal bills or investing, then I notice I tend to spend more on business expenses within the month because I feel like I have the money to do so.”

Not Keeping an Emergency Fund

Without an emergency safety net in place, it’s easy to break out the credit cards and ruin a well-thought-out budget if the car breaks down or the roof leaks. Having an emergency cushion of three to six months’ worth of expenses can keep your plan in place when unexpected events occur.

Not Tracking 'Invisible' Expenses

“It’s easy to scrutinize your tangible expenses, like groceries and gas,” said Paula Pant, founder of the Afford Anything blog. “But many people let money leak from their ‘invisible’ bills, like insurance premiums and mortgage interest.”

Pant suggested consumers take one day per year to shop for competing insurance plans and mortgage rates. “These expenses can move the needle far more than shaving 10 cents at the pump ever could,” she said.

Letting FOMO Get the Better of You

Fear of missing out — aka FOMO — can cause you to spend money unnecessarily. “You need to turn off social media sometimes so that you don’t always cave to FOMO,” said Martin Dasko, author of “Next Round’s On Me, How to Achieve Financial Freedom in Your 20s” and the Studenomics blog.

“This dangerous habit convinces you that you’re always missing out and that you need to participate in everything,” Dasko said. “It’s OK to stay in. It’s OK to do your own thing. You’re not always going to miss out.”

Paying For Monthly Subscription Services

Online streaming services, monthly subscription boxes and other subscriptions can easily add up, especially if you don’t take the time to monitor how many monthly fees you’re racking up.

“Subscription services seem convenient and valuable at first. However, over time, they do actually start eating into money that you could be saving,” said John Rampton, co-founder and CEO of Calendar. “Worst of all is when those subscription services go unused because you get distracted, forget you have them or have too many of them to use them effectively. Monitor what actually gets used and get rid of the rest.”

Splitting Lunch With a Friend

“It might be a bit easier, simpler and faster to divide the bill evenly — but doing so has cost me more,” financial wellness expert Jason Vitug said. “There was a time I was in a very tight budget but still wanted to eat with friends,” he said, adding that his bill would have totaled $10 with tip and tax. When he was asked to split the bill and pay $25 — which would have covered the meals and drinks of his friends — he objected. “The jokes followed, but I managed to break the social dining habit and help my finances,” he said.

Not Automating Your Payments

One of the cornerstones to savvy money management is in savings and payment automation. “I automate retirement, savings, credit card payments and more,” Abella said. “If someone isn’t automating, then they are just more likely to miss financial goals or miss payments.”

Keeping Up With the Joneses

Trying to keep up with appearances and match the financial spending patterns of people around you is a recipe for disaster. “People generally think they spend less than they actually do,” said Chad Smith, CFP with Financial Symmetry in Raleigh, North Carolina. “Buying bigger houses, cars and other toys can easily blow past spending targets originally assumed in financial plans.”

Accepting Bad Checks

One fee levied by banks is a bounced-check fee applied to the person who tries to cash or deposit the check. That’s right — some banks assess a fee against recipients of checks from people whose accounts have insufficient funds.

The solution? Make sure anyone writing you a check has sufficient funds in the account it’s coming from — if you can.

Increasing Your Standard of Living

“Too often, once people learn they are getting a raise, mental planning begins of how they can finally buy the next thing,” Smith said. If they saved most or all of the raise instead of buying a new iPhone, he suggested, many people could reach financial independence much sooner than expected.

Window-Shopping

There is some real wisdom to the line of thought that if you don’t see it, you won’t want it. “Avoid window-shopping and you’ll spend less,” said Roger P. Whitney, CPF with WWK Wealth Advisors in Fort Worth, Texas. “It’s amazing how ‘need to have’ pops into my head when I’m shopping.”

If you simply remove or avoid temptation, you’re much more likely to spend less.

Assuming Life Will Always Be Like It Is Today

Not planning for future downfalls is one of the worst habits that can sabotage a financial plan, said debt freedom expert Jackie Beck. It’s easy to assume life will always be as rosy as it is today but, for some people, that won’t be the case. If you don’t plan for life’s downside, “you don’t leave room for error, unexpected events or emergencies — and that can wreak havoc on your budget,” she said.

Not Keeping Track of Your Cash Flow

“Not everyone is into budgeting, but at the very least you need to understand where you’re spending your money,” Martinez said. “Free services like Mint and Personal Capital make it simple to set things up so you get updates on your balances and spending.”

Not Asking For a Raise

“If you are being underpaid or are underemployed, your focus should be on getting a raise, finding a side hustle or looking for a new job,” said Kelly Whalen, founder of The Centsible Life. “You should always be looking for ways to earn more to help you increase your savings and reach your financial goals,” she said.

Using an Out-of-Network ATM

ATMs can charge up to several dollars per withdrawal, and those fees can sneak up on you. Even if the ATM is in a highly convenient location, consider that $3 per week can add up to $156 for the year, the cost of a fancy dinner out with a loved one or an extra deposit into an individual retirement account.

Not Planning Ahead for Expected Needs

“A lot of spending is due to last-minute decisions,” said Carey Ransom, senior advisor at Aspiration. He offered these examples: “You’re going somewhere, and you forget to bring water or a snack. You forget your umbrella and get stuck in the rain. You are late getting somewhere and have to park in a premium spot.”

Add those kinds of unexpected purchases up, and you might just blow your budget, he added.

Not Allowing Yourself Some Wiggle Room

“If you try too hard to stick to a budget or plan, it can backfire,” said Valerie Rind, author of “Gold Diggers and Deadbeat Dads.” Instead, know that your plan is a roadmap. If you veer off track, accept and keep moving forward. If you don’t beat yourself up, you’re more likely to get back on track right away.

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Gabrielle Olya and Alaina Tweddale contributed to the reporting for this article.

This article originally appeared on GOBankingRates.com: How Your Daily Habits Affect Your Paycheck