Business | Your Money

Six habits that will bust your wallet

Every Tom, Dick and even the budget-conscious Harry has a financial black hole that seems to drain the cash away from their pockets

  • By Claire Bradley, Bloomberg
  • Published: 00:00 December 4, 2010
  • Gulf News

bad habits
  • Image Credit: Supplied
  • We all feel the pinch in this tougher economy, especially when buying groceries. Clipping coupons is downright trendy today — but is it really a good habit?

It's still a week until pay day, but your chequing account is almost empty already. Where did all your money go?

We all have our black holes, those money pits that seem to magically make our cash disappear.

Here are six bad habits that will make you broke, and how to break them:

1. Window shopping

It can be fun to browse the aisles and see what's out there. We all have our weak spots, like home goods, electronics or clothes — even if you don't like to go to the mall. You don't even have to leave the house to window shop anymore; those catalogs, the internet and commercials advertising the latest sale can be just as tempting.

Window shopping is a bad financial habit that takes some discipline to break. Staying away from your favourite retailers and not requesting catalogs or e-mail updates from your favourite stores is a good place to start.

Before buying that latest item you pine for, ask yourself two questions: Do I need it, and can I pay cash for it? If your answer to either or both is no, walk away.

2. Carrying lots of cash

You know that paying with plastic is bad, but carrying lots of cash can be a bad habit too.

Cash can give you the feeling of having extra — fun money that's just sitting there.

Carry only enough cash for what you need, and leave the rest at home. Avoiding plastic is great, but budgeting is just as important when choosing to pay cash.

If you like the green, try budgeting your cash with envelopes: one for groceries, one for entertainment, etc.

3. Clipping coupons you don't need

We all feel the pinch in this tougher economy, especially when buying groceries. Clipping coupons is downright trendy today — but is it really a good habit?

Sure, getting 50 cents off that package of cookies or that brand-name detergent is a discount, but you may be surprised to find that your grocery bill isn't going down despite all your clipping.

The truth is that buying generic brands that are just as tasty is often cheaper; coupons can make us buy things we didn't plan for.

Start with a grocery list for the week, and then look at your clipped coupons.

If you can use one, great, but try supermarket brands too for the best bottom line.

4. Saving your info with vendors

Those online shopping sites are so considerate to save your address and credit card information — some even have one-click ordering buttons, so you can buy something in just a second. It's very easy and very dangerous. Not only does this easy shopping make you broke if you're prone to impulse shopping, it also eliminates the feeling of spending money, because all you do is click.

Don't allow vendors to store your credit card information. Avoid signing up for e-mails and catalogs if those tempt you to shop when you really shouldn't. It can be great to know about a sale, but if you didn't need anything, it's just another temptation.

5. Shopping with your emotions

It was a rough week, or a good one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget, that big pie — it was on sale, too. Letting your mood dictate your buying decisions is the quickest way to go broke.

Sober up before shopping. Do you need these items, and can you afford them? Be honest with yourself. Reward yourself by doing something that doesn't cost, like taking a nice bath, or spending time with loved ones.

6. Not planning ahead

It's Tuesday, you're tired, and you have no idea what you'll make for dinner. A great night for takeout, right? Using data from the Bureau of Labour Statistics, it's estimated that the average family of four spends more than $4,000 (Dh14,688) per year on eating out — a very expensive habit that will make you broke in a hurry.

When you make your grocery list, make a menu for the week at the same time, so you always have ingredients for a meal. If your week is hectic, try cooking on (Saturday) and freezing meals for the week. Plan for lunches the same way; not only will you save money, you'll eat healthier by avoiding fatty restaurant food.

The bottom line

It takes some discipline to break these bad habits. With some planning, restraint, and avoiding tempting situations, you can break these habits — and maybe even find you have a little extra cash at the end of the month.

Have your say

Are you disciplined when it comes to managing your money? Which bad habit would you break? Do you have any unique tips for saving money? Share them with us at readers@gulfnews.com

Comments (3)

  1. Added 15:00 December 4, 2010

    First of all, big thanks to Gulf News for publishing such an article. Living in times when we need to exercise restraint in our expenses, this article does open our eyes to many things we overlook in our daily lives. It pays greatly to be wary of the many traps we are likely to fall into while we go shopping. A little restraint & planning will do wonders

    Shamla Fazal, Dubai, United Arab Emirates

  2. Added 14:25 December 4, 2010

    as far as i have seen people have become wise and have cut of various expenses you'll hardly spot any individual purchasing from malls. the cost of living has increased dramatically the in UAE in the past few years. people consider 10 times before buying something after taking the global recession into account which struck 2 years back.

    Mikhail, Dubai, United Arab Emirates

  3. Added 11:19 December 4, 2010

    Great tips but for most of us following them practically is a big problem and requires a lot of sacrifice. what i have noticed out here is that people spent too much on things that they don't want and don't need. there is no control on what they are spending their money on. If even if you have enough cash, or very little cash or use plastic money it all depends on how you utilize and spent it. some of us want to buy the whole world to show 10 million people how rich we are. and once we start others copy. If you keep a track on a daily basis we would know where the money is going. I stay with my parents and although i pay my car loan, petrol and support my parents at times i tend to spent money on clothes and accessories. i have a craze of buying brand news formal clothes for my office wear due to this at the end i find it hard to support my self but i certainly know where the money is going. So if we keep spending lavishly we keep wasting. n these hard times when recession and economic downfall are household issues, planning and sticking to a budget is a skill every person needs to learn. Somehow, however, saving money and staying within a specific budget is never as effortless as it sounds. Every trip to the supermarket costs a little more than planned, every holiday demands a little more than we can afford and schooling and housing is not as inexpensive as we had hoped. Not to mention that it becomes dreary to plan, control and budget all the time.

    Mathew Litty, Dubai, United Arab Emirates

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