Americans Still Splurging on Purchases: Are You One of Them?
Completely overhauling poor financial habits and going cold turkey on your favorite purchases is no easy feat, but in your infinite wisdom you may likely realize that making significant financial changes is important to your future. Despite this recognition, studies show that many people are not only falling into a worsening financial situation, but also refusing to do anything about it.
A recent study from Accounting Principals discovered that on average Americans are taking home $130 less each month due to the Payroll Tax increase.
The loss has made it more challenging for people to meet their goals, but a surprising 22 percent said they have not made any effort to cut back on their spending. In fact, small purchases, such as lunch and coffee, remain high on the list of consumers’ most costly expenditures. Approximately 82 percent of respondents said they buy coffee regularly, averaging over $21 a week. Another 89 percent spend money on lunch during the week, averaging more than $36. And it doesn’t stop here. Five percent of study participants said their most costly expenditures include Happy Hour outings after work, and another 8 percent admit to overspending on shopping during the work day.
If these trends sound familiar, it might be time to face the truth and examine the potential damage you might be doing to your financial health. While it may be hard to face, it’s time to look at your receipts, bank and credit card statements for a dose of reality on how your daily lattes and garden burgers are affecting your ability to pay off your credit card debt or save money for the future. After you’ve done the math, it’s time to sit down and make some decisions about how you plan to proceed.
First step: cut yourself off. Whether it’s your coffee addiction, love of long lunches or shoe obsession, it’s time to find alternatives that satisfy your cravings without endangering your bank account. Small habits, such as making coffee at home, bringing leftovers to the office and limiting yourself to one small purchase a month, can not only save you money, but help you realize that you don’t “need” certain items as much as you initially thought. In addition, it can help you realize how simple changes can go a long way and prompt you to examine other spending categories worth changing.