10 Things You Are Overspending Without Knowing
Are the habit of spending more than what Canadians can afford the main reason of high consumer debt levels? Statistics show that in the mid-quarter of 2016, for a dollar of disposable earnings Canadians owe a $1.67. Most of these debts are concerning home equity and a huge portion goes to credit card debts and other lines of credit. Canadians might be cautious towards spending and staying on budget; however, there are several instances when you’re overspending without being aware of it. Acknowledging these instances and shifting to a strick budgeting plan can help you control your finances.
10 Things You’re Unaware of Overspending
Below are the 10 things or occurrences that you may be unaware of overspending.
Weekly Grocery Shopping or Bulk Shopping
Some may find bulk shopping a means to save more on promotions and discounts. However, in most cases, buying too much might just go to waste especially when we’re buying things that we don’t necessarily need daily. The best thing you can do is to design a preplanned meal and shop every 3 days. This way, you can ensure that the food will not go to waste and can even focus more on your shopping.
Driving a Car
Most may think that driving a car is much cheaper. This is because looking at the expenses on a small scale does not give you a larger view of how much you are spending in a year. Taking into consideration the continued improvement in technology including in automotive, a car is deemed to be a depreciating asset. In fact, according to the Canadian Automobile Association (CAA) and Globe Drive research, the total cost per year that you acquire to own and operate a vehicle amounts to $10,456. This value is based on a Toyota Camry, 2013 edition with 18,000 km a year. Moreover, when you own a car, your expenses include regular maintenance, fuel, and repair.
Doing Errands at the Mall
Doing your grocery in the mall can trigger you to buy things that you actually don’t need. Most of which is a result of impulse buys. So, it is better to itemize and write down the things that you need to buy and make sure you stick on your list.
Shopping as Recreation
Most of us are going on shopping to relieve ourselves of stress. However, not realizing that the more we shop and buy things which we can’t afford the more stressful we will be when facing our bills. To those individuals who are working hard, shopping might be an excuse to reward yourself. This is not a bad notion though for as long as you learn how to spend wisely and spend on things that you can afford.
Shopping without a List
One way to prevent buying the things that are not necessary is to create a list before you do your shopping. Whatever the items you aim to buy, it is a must that you have everything listed and prepared. This will give you an idea to stick to the items on your list and avoid buying other things that you don’t necessarily need.
Using Credit Card
Credit cards give you the utmost purchasing power, however, if you are not using it wisely, it might drag you to indebtedness. In fact, according to the study, you are likely to spend less when using cash than your credit card. Though credit card rewards and bonus points seemed to be enticing, you shouldn’t fall for this trap. The bottom line is, you just need to make sure that your living on a budget and do not abuse your liberty to swipe now and then. Also, when making any purchased like an overpriced extended warranty, you have to find out whether it’s a wise decision or not.
Too Much Stuff
If you are fond of buying stuff, it will just create turmoil and will make you less organized. Hoarding and buying things that you don’t need is an additional expense. Moreover, instead of focusing on the stuff that you want, you should put more focus on buying the things that you need.
Under-utilizing Your Health Benefits.
Instead of traveling to other places for relaxation, going on a dinner date or others, there are several activities that you can do which will help get the relaxation that you need plus shun you from spending any penny. These are your health benefits such as acupuncture, massage therapy, and holistic appointments.
Having the Wrong Friends.
As they say, birds of the same feathers flock together. It is not being discriminatory to choose friends who have better finances than you rather than those who have less. The point is if your friend influences you in a good way that most likely you’ll be better as well in managing your finances. Sometimes a person pushes himself or herself towards financial freedom when being inspired by the success stories of others.
Using Too Many Coupons
It’s great to get a good deal, but if you’re spending more of your precious time matching coupons on your grocery shopping, it’s just a waste. This is true for someone who has been paid hourly, instead of putting much time to work, you put more of your time in dealing with too many coupons. Organizing this stuff is simple, all you need is to create a list and see if any of your needed items are on sale through tracking it on your app when available.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.