Once you’re in your 30s, people will expect you to have smarter shopping habits. Not only is it wiser to spend your money responsibly, but once you hit the big three-oh, you will need to focus your savings efforts towards retirement and buying a home.
Ditch these five bad shopping habits before you leave your 20s, and you will find that it is much easier to save money and hit your financial goals later in life.
1. You Buy What You Want
As an adult, it is time to realize that there are going to be many things that you want to buy. However, it is important to buy things you trulyneed rather than everything on your wish list. For example, you need groceries — but you do not need that tray of sushi or bottle of cold-pressed juice. Cutting out frivolous spending on whims and splurges will drastically change your finances.
This is not to say there is never room for splurges. Instead, budget a set amount of money each month that can be spent however you wish.
2. You Use Credit Cards Wrong
Credit cards can be helpful in your finances. However, if you are just pulling out your credit card every time you make a purchase, you are more likely to overspend and put yourself in a situation where you’re living paycheck to paycheck. Using credit cards wisely is the key.
A smart way to use your credit card is to write down all of your purchases as if you were balancing a checkbook. For example, if you want to use your credit card for groceries, utilities, gas, and dining out, then set a budget for each one. Then you add all those budgets together, and every time you swipe your card, you deduct the cost from your total budget — either in a small notebook or on your phone’s notepad. It might look like this:
-$75 for electric bill (2/19)
-$5.50 for fast food (2/23)
Once you reach $0, stop using your credit card and pay off your balance. This allows you to benefit from the convenience of a credit card, without going into debt.
Also if you plan on using a credit card for majority of your spending, then you need to get a card that will give you a decent amount of return. Consider using a credit card that comes with an annual fee, because those cards usually come with better rewards.
3. You Don’t Pay Attention to Your Budget
Financial experts are quick to push the idea of budgeting on others as a simple way to be in control of your finances. The truth is that budgeting is harder to stick with than it sounds. To stay committed to your budget, try establishing budget ranges rather than a set number. For example, budgeting $350–$425 per month on groceries allows for natural fluctuations, such as a good sale or having guests over for dinner.
4. You Emotional Shop
Feeling sad? Go shopping. Excited about a new job offer? Go shopping. Have nothing else to do on a Saturday? That’s right, go shopping. As silly as this sounds, many people allow their feelings and mood to dictate when they go shopping. Shopping when you are stressed, bored, excited, or depressed are all easy ways to overspend and buy items you do not need and will not use.
This is where it is important to stick with a budget, and to evaluate what you are buying. Perhaps you are in Target, and you see a really cute dress. Before putting it in your cart, ask yourself if it is in your budget. Do you really need it? Do you have anything else like it at home? Realize when emotions are dictating your shopping habits and overrule them with logic. The best trick to try is walking away from a purchase for a day or two. If you still want the item later and it fits in your budget and needs, then go buy it.
5. You Don’t Shop With the Future in Mind
As you enter your 30s, you should consider the future for each major purchase. For example, if you are planning on having children in the next two to three years, perhaps a small car is not the wisest decision. The same principle goes for buying houses, furniture, and more.
You should even consider the future with minor purchases. It can be as simple as paper towels going on a sale. Since it is predictable that you will use paper towels in the near and distant future, you should buy several months’ worth rather than just one package. Remember to exercise balance when it comes to bulk buying, though. You will need paper towels for the rest of your life, but that does not mean you should buy a whole a year’s worth!
Which shopping habit do you think is the most important to leave behind once you hit your 30s?
This is a syndicated post, which originally appeared at Wise Bread. View original post.