10. You don't share.
However off-putting the Care Bears may have been, they got a few things right. Sharing is the way to go, regardless of what it is. Roommates take the edge off of housing costs. Family cell phone plans are way cheaper than individual ones. Even upsizing a combo and buying an extra sandwich at a fast food place is a good way to save a little money. Not much, sure, but as often as people eat out, it makes a big difference.
9. Credit cards let you ignore your financial realities.
There’s an old Steinbeck quote about how socialism never took root in America because we see ourselves not as exploited proletariat, but as temporarily embarrassed millionaires. Looking at the way we spend money, he may be right. For every thinkpiece on how millennials are rejecting credit cards, there are statistics about how national credit card debt is rising. Not only are you kicking Future You in the pants with that interest rate, you’ve also given yourself a way to avoid facing your financial situation, which means you won’t change your spending habits.
8. You don’t put anything away.
Bank of America's “keep the change” thing is brilliant. Some people feel slighted signing up for a program that basically says “you’re not adult enough to put money into savings by yourself,” but golly, it adds up over time. If you can make the decision once to set up an automatic withdrawal from checking into savings, you’re going to be ahead of the curve.
7. You don’t invest.
Keeping your money in a savings account is better than keeping it in checking, or in a coffee can under your bed, or buried under the X in the old coal mine down the road. But it’s still not as good as investing it. That whole thing about spending money to make money? This is what they’re talking about. Look into stocks, bonds, retirement funds, and other investments to get your money working for you.
6. You don’t invest well.
A lot of people may dip their toes into the financial water with one kind of thing. Maybe you only like municipal bonds, or penny stocks, or money market funds. But a healthy stock portfolio is a diverse one, that incorporates a good mix of risk and return.
5. You rent your home.
As Kendrick Lamar and The Lonely Island said, “renting’s for suckers right now.” The housing market is starting to slowly recover, but it’s not there yet. When you buy a home, you’re taking your single best expense, and you’re turning it into equity instead of money down the drain. When you’re ready to move, you have something of value instead of having to cross your fingers that you’ll get your safety deposit back.
4. You spend more than you should buying new.
Everyone needs work clothes. Most everyone in America needs a car, unless you live in a city with an actual infrastructure, in which case, congratulations. This isn’t about you. But you know what’s cheaper than buying a new car? A used car. Same with clothes. Thrift shops are where it’s at. You can buy a whole wardrobe for the cost of a single outfit, and if you really look, you can find a lot of the same brands you’d be buying anyway.
3. You spend less than you should buying low-quality.
Didn’t the last side say to be frugal? Yes. Yes, it did. But there’s also a time when you get what you pay for. Buying low-end shoes means buying shoes a lot more often. You don’t want to buy a brand new car, but if you spend three figures on a beater, you’re going to put more money into keeping it running than you would have buying a real car. Do research, and know when to scrimp and when to spend.
2. You don’t have a budget.
There is no shortage of places to download budget templates, and no shortage of reasons to do so. We’ve talked before about what the ideal budget should look like, but regardless of where you choose to allocate funds, you should at least do so confidently instead of through a blindfold. Thinking about money can be anxiety-inducing, but it’s less anxiety-inducing than living hand-to-mouth because you don’t have a plan.
1. You don’t know where your money is going.
A big part of trimming expenses is knowing what you’re spending money on. In an era where you can sign up for automatic withdrawals for everything, you can be grossly overpaying for utilities, cable, or insurance, and not even realize it. Pay your bills by hand, so you have to think about that money going out every month. At the very least, keep tabs on your bank account.