Lifestyle Financial Habits to Avoid

Hopefully the title has caught your attention. This article is focused on poor habits (that by the way is subjective) that can contribute to the financial ruination of the middle-class (as well as the lower middle-class). We all have lifestyle habits that impact finances, and many of them are cherished. However, some of them are financially destructive. If you are particularly well off, the destruction is immaterial and can be ignored. However, if you are in the broadly sensed middle-class, but especially if you are in the lower end of the middle-class, some of these lifestyle choices can significantly adversely impact your financial situation. Some of course may be conscious choices made by you where you are willing to sustain the economic impact because it’s part of a lifestyle you want. However, at least you should be aware of the financial impact of those lifestyle choices. Let’s take a brief look at some of those lifestyle choices that add to your cost of living and where some of them, especially cumulatively, can make a big difference in what’s left in your pocket at the end of the day.

Food delivery – our society has become fixated on food delivery services (Door Dash, Instacart, Uber Eats, etc.). Compare that to a home-cooked meal – and the reality is, there is no comparison. Depending on how often you use these food delivery services, you can easily be spending $100 or $200 per week extra (above and beyond what the cost of the food would be in your own kitchen) every week, on this type of lifestyle choice. We’re talking here, depending on how immersed you are in this, easily $5,000 to $10,000 per year.

Restaurants – far be it for me to naysay the use of restaurants – I love them myself. However, my point here is, the difference between a good, local food restaurant, perhaps family style, whatever – compared to the so-called upscale, or fancy, or big-name restaurant. If for various social and communal reasons expensive restaurants are your choice or a necessity, so be it. But recognize the difference for essentially the same food, just with a different presentation and ambiance, can amount to easily say $20 to $40 per person, per meal, at any time. Depending on how immersed you are in this type of choice, once again, we’re talking several thousands of dollars a year.

Cars – I’ve “preached” this issue before. If you are the type that trades in a car every few years because you like the smell of a new car, recognize that choice probably is costing you between $10,000 and $20,000 (more?) every 3 years or so. 

Starbucks Addiction – I’m picking on Starbucks because of its prominent name. However, this could apply to almost any of the named fast-food or similar type operations. You can buy coffee at the local mart for under $10 per pound (making approximately 20 - 25 cups); a cup of coffee at a QuickChek or similar for $3.00+, versus the same thing at an allegedly upscale emporium that would run you maybe $5 or $6 a cup. And then, that doesn’t even get close to if you change it from a plain coffee to a latte or something else. Depending on how often that is part of your habit, you can easily be spending $50 or more per week extra for that luxury. That’s another few thousand dollars a year.

Automatic Renewals (Subscriptions) – this is one of those often minor, but they add up, banes to modern lifestyle with everything getting charged to your credit card. How many subscriptions do you have – whether it be magazines, newsletters, food of the week club, etc. Many of these you may not need or want, don’t use, are a waste. I personally have an issue with these automatic renewals when I, for instance, subscribe to a magazine and in small print they say when your subscription is over in one year, we will automatically renew you at the current rate. Since I’m often purchasing these subscriptions at a discounted or introductory type price, this automatic renewal is often at 2 or even 3 times the price I am paying now.

Credit Card Interest – this is another big one and is a plague on the lives of many. Your typical credit card charges interest on balances in the vicinity of 20% - 25%. If you get in the habit of carrying a balance, of not paying off that card in full every month, you could easily run (let’s assume for the moment with a few cards) a balance of $10,000. If we use an almost bargain interest rate of 20%, that means you are paying $2,000 in interest every year on these balances.

Gas Station Fill-Ups – this one is very minor; I’m just adding it for a lighter touch. Many gas stations add typically around 10 cents a gallon if you charge the fill up as contrasted with paying in cash. I am not oblivious to the fact that many credit cards also carry points – so paying an extra 10 cents a gallon is not a total waste of money.  Let’s put that into a financial perspective. The average driver probably puts in around 12,000 miles a year. If we assume 25 miles per gallon, that would be 480 gallons a year. At an extra 10 cents per gallon for the convenience of the use of a credit card, that amounts to $48 a year. If you have one of those cards that gives back let’s say 2%, considering that 10 cents a gallon on the current rate is about an extra 4%, it’s really only costing you half of that extra 10 cents – in other words, about 5 cents a gallon or in this hypothetical about $24 a year. Hardly enough to really make an issue of it – but I wanted to throw that in just for fun. 

My point about all this is that we all need to be conscious of the lifestyle choices we’ve made where for convenience or other reasons, we’re paying more for something than need be paid. In some cases, it may well be worth it, and it is just simply the cost of living. Or you might be in a financial position where you really don’t care. On the other hand, with the buzzword of the year being “affordability”, and with even middle-class families having difficulties making ends meet, this is kind of low hanging fruit, and with modest effort, will pay off handsomely.