You may think you're the master of your finances, but why do you come up short on cash every month? Unless someone else is pilfering money from your checking account, you might be a victim of "lifestyle creep."
An all-too-common conundrum, "lifestyle creep" happens when you gradually start spending a little more than you should, before suddenly realizing your habits have spiraled way out of control. "It tends to happen slowly and in small increments, so we don't notice it," certified financial planner Ross Anderson told Mic by email. "Your regular bottle of wine might move from $5 to $9, or you might frequent the coffee shop a few more times a week. On the surface it never feels like enough to derail your finances, but it adds up when left unchecked."
How can you put a stop to creep behavior? One way is to treat saving as a priority, like a bill you have to pay, Anderson suggested. You should also keep an eye out for these typical offenders:
1. Living like a celebrity when you get a raise
Remember the saying, "more money, more problems"? Making more money is great, but it can lead to more problems if you spend all those extra funds. "The big mistake I see young people make is assuming they can save for the future later," certified financial planner Carolyn McClanahan told CNBC in November. "But before you know it, you're 50 and you don't have that much time to save for your future."
Of course you should treat yourself after a well-earned raise, but once you've scored that trophy, roll that additional money into an investment account. By investing extra money while you're young, you won't have to scramble when you're older, McClanahan advised.
2. Paying unnecessary late fees
One fee you can definitely avoid is a late payment charge on a credit card. Late fees can cost up to $27 the first time and up to $35 for each additional late payment, NerdWallet reported. Credit card companies can be forgiving if it's your first time missing the payment cutoff, so long as you call and ask to have the fee waived.
But don't forget to be polite when asking for a fee waiver. "Probably the biggest thing aside from your history is being nice to the card rep on the line," Michael Moeser, director of payments, retail and small business at Javelin Strategy & Research, told Creditcards.com. "He or she usually has some leeway, and if you're a rude, you're much less likely to get help."
And next time, opt for automatic payments so you can set it and forget it.
3. Paying out-of-network ATM fees
You need cash fast and the closest ATM is owned by another bank. Eh, why not? They only charge $3 to use it. While paying $3 doesn't seem like a big deal, you might not realize your bank can impose its own fee for using that out-of-network ATM, Bankrate found, which could put you closer to $5 per ATM trip — an amount that can really add up if you make it a habit.
So, what's the best way to get cash? Aside from using an in-network ATM, you can usually grab extra cash during a point of sale transaction at many retailers for no extra cost.
4. Going out to lunch every day
Unless your company is footing the bill for lunch, going out every day to grab a burger can cost you $20 or more a week, USA Today reported — or more than $1,000 a year, which doesn't take into account the occasions on which you buy a coworker lunch or treat your team to a round of drinks at happy hour. If you don't want to go cold turkey, start slow by cutting restaurant lunches to two or three times per week, or only going out when you have something to celebrate.
5. Keeping memberships and subscriptions you don't use
It may sound like a pain to make the effort to cancel subscriptions or memberships you no longer use, but eliminating wasted expenses could save you a pretty penny. For example, a gym membership costs roughly $60 a month, USA Today reported, but 67% of such memberships aren't used regularly. Unless you're a gym rat, you could save around $720 a year by cutting it out. If you find yourself losing interest in a monthly wine or makeup subscription, re-evaluate to make sure it's something you want or cancel and find something else you'll use.
6. Engaging in retail therapy
"Retail therapy" can buoy your emotions when you're celebrating or soothe your woes when you're down in the dumps — but while buying the occasional small trinket probably won't hurt you, chronic impulse shopping can rise to the level of addiction, according to researchers at Indiana University. In fact, being an emotional shopper can ultimately make you feel worse when the credit card bill arrives or your bank account balance dwindles.
One way to halt your shopping addiction is to ask a friend to hold you accountable. "Having to account to someone else for what you spent, what you bought, etc. is sobering," Dr. Gretchen Kubacky told GoBankingRates. "Choose someone you trust, of course." If you feel as though you cannot curb this behavior easily, talk to a therapist.
Another trick: Recognize when you're feeling too emotional and stay out of the mall — and away from Amazon! — until you feel calm.
7. Stealing from your emergency fund
It starts innocently enough: You see a hot pair of boots but you're short about $50, so why not just "borrow" a bit from your emergency fund and eventually pay it back? The problem with this scenario is that while you intend to put back the money, it's unlikely you will. The next thing you know, you've dipped into the account so many times that your savings are practically depleted.
Avoid taking money from your emergency fund by moving it to an interest-bearing savings or money market account that's not so easy to access. If a true emergency ever arises, you'll be happy you did.
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