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7 Questions About Money – New Year

  1. What are your financial goals this year?
    A new year often means new goals and milestones in your life, and your financial plan needs to change to keep up with those.

Maybe last year you were saving for a trip abroad, but this year you are saving for a down payment on a house. Or maybe you’re edging closer to retirement and need to start saving more aggressively.

Don’t be vague when identifying these goals. A concrete milestone, such as “I want to add $6,000 to my emergency fund” is going to keep you motivated a lot longer than a vague one like, “I want to save money.” Once you know what your financial goals are, you’ll be able to come up with a spending and budgeting plan for how to reach them.

  1. What are your personal priorities for 2016?
    Factors other than financial goals should influence your budget, too. Is it important to you to spend time with friends on a weekly basis? Add a “fun” line in your budget for activities like eating out, movies, and weekend activities. Do you want to support the arts in your community? Set aside money for a seasonal subscription to a local theatre or orchestra. Do you have specific causes that you care about? Budget a monthly allowance for donations or charity.

When it comes to finances, it’s easy to fall into the trap of letting your financial goals determine your spending. But life is more than just retirement and mortgages. Give yourself permission to let your personal priorities influence your spending decisions, too. You’ll be happier, more satisfied with your financial life, and better able to stick to the budget you set.

  1. Where did you slip last year?
    The new year is an excellent time to take stock of what did and didn’t work in the past year — that includes where you didn’t quite follow your budget. Did you eat out more than you should have in 2015? Not save as much for retirement as you wanted? Impulse shop too frequently?

You can’t improve in 2016 until you know where you went wrong the year before. Take some time to look at your spending from the last twelve months and identify the area where you slipped up. The make a plan for how to avoid those mistakes this year.

You may need to automate the money that goes into your savings and retirement accounts. You may need to exercise a little more restraint in your spending. Whatever the solution, it will be easier to put into practice once you know what the problems are.

  1. What are your mandatory expenses?
    Once you know your goals, priorities, and weak spots, it’s time to begin setting up your budget. Start by identifying the living expenses that you must pay every month. These will include your rent or mortgage, insurance bills, utilities, and any debt payments. Budget for these expenses first, subtracting their total from your monthly income after taxes. Whatever is leftover is what you have available for variable expenses.
  2. How much can you save each month?
    Once you’ve determined how much to set aside for mandatory expenses, it’s time to look at savings. Savings can include long-term goals, like retirement, or short term goals, like a vacation. Identify everything that you want to save for this year, then order them in terms of urgency.

Some goals, like retirement, you should save for every month. Other things, like travel or large expenses, can be saved for one at a time. Once you’ve met one savings goal, you can move on to the next one.

When you decide what you’d like to contribute to each goal, the best way to stay on track is to make saving non-optional. Set up an automatic transfer, either from your paycheck or your checking account, to put the money directly into savings as soon as it lands in your bank account. You won’t risk spending it accidentally, and you will ensure that you make monthly contributions towards your savings.

  1. What are your spending triggers?
    A lot of financial management is about cutting spending — reducing your insurance bill, avoiding credit card interest, eating out less. But all the small cuts in the world won’t help if you don’t know your spending triggers.

Spending triggers are those moments or circumstances that make you pull out your credit card and break the rules of your budget, even when you have the best of intentions. If you want to cut your spending, take some time to identify these triggers and come up with a plan to eliminate them.

If you can’t resist a coupon code when it shows up in your inbox, then you should unsubscribe from promotional emails. If you always want to eat out when you’re stressed, create a new, free routine for unwinding after a hard day at the office. Do you always spend more when you go shopping with a certain friend? Come up with other activities the two of you can do together and leave your credit card at home when you go out.

Once you’ve identified your spending triggers and come up with ways to avoid them, you’ll have a much easier time sticking to your budget.

  1. Where does your budget have wiggle room?
    Managing your finances is awesome, and cutting down your spending to save more is a great goal. But if you are on a strict budget all the time, with no room for any lapses or fun purchases, you risk getting “budget burnout” and slipping back into old, bad habits.

To avoid that, identify the places where you can cut yourself some slack. Maybe you’re giving up eating out but can still treat yourself to a latte once or twice a week. Maybe you’re giving up cable, but you and your roommate can split a Netflix subscription. Allow yourself a few inexpensive extras and sticking to your larger financial goals will feel much less stifling.

Finally, wiggle room also means planning for the unexpected. It may seem smart to put every extra penny into savings and retirement, but what happens when your car breaks down and you don’t have any money for the repair? Leave a little wiggle room for surprise expenses, and you won’t just start a budget, you’ll stick with it.

The beginning of a new year is the perfect time to get your finances in order. Be honest and realistic with yourself as you put together your plan for 2016, and you’ll find yourself on your way to sustainable financial success.

Katharine Paljug, the author if this article for GoGirl Finance, is a freelance lifestyle and health writer who specializes in online copy.


Retirement at Age 75 – Is This the New Normal?

For the vast majority of Americans, the career “finish line” is hitting a retirement number and being able to retire on their own terms. In reality, though, hitting the finish line is getting increasingly tough. Instead of the road to retirement being a straight line from Point A to B, it’s often filled with twists and turns.

Unexpected expenses and other rising costs are making the trek to retirement quite the challenge, according to NerdWallet’s 2015 New Grad Retirement Report. Based on three key findings, the graduating class of 2015 faces the very real possibility that they may not retire until the age of 75. By comparison, the average retirement age today is 62.

How Retiring at 75 Could Become a Reality

What’s pushing Millennials to work until the ripe age of 75?

The first big issue is the growing amount of student debt today’s graduates are dealing with. Average student debt these days is $35,051, up from $29,400 just three years prior, while starting wages are up only around $1,200 since 2012. With college becoming more of a requirement than an exception to land a job where economic advancement is possible, college tuitions have been rising at a pace that’s vastly outpacing wage growth and inflation. The result is more than $1.2 trillion in cumulative student loan debt.

According to NerdWallet, the average student loan repayment plan was 10 years, amounting to $4,239 being repaid annually (including interest payments). All told, NerdWallet suggests that repaying student loans could reduce 2015 grads’ nest eggs by nearly a third, reducing their lifetime investment-earning potential by more than $684,000 over a 50-year period. Since 2012 the amount in lost retirement savings has jumped by almost $124,000. In other words, instead of investing their savings and compounding their gains over time, grads will instead be diverting their money early in their working years (where it can be of the biggest benefit over the long run) to paying back student debt.

The second big issue is that rents are rising across the nation at a much quicker pace than wages. NerdWallet notes that rent prices across the U.S. are up 11% since 2012. Rising rent prices mean recent grads need to apportion an ever-greater amount of their salaries to covering basic expenses. This leaves less money for investing, and it means a potentially longer wait to retire.

Lastly, NerdWallet pinpoints a lack of trust in Wall Street and skittishness toward investing as a reason why this year’s grads may have to wait until age 75 to retire. The effects of the Great Recession still ring true with today’s Millennials, meaning many are holding far more in cash than they should be. The result is that average annual investment returns are expected to be down, and it could take extra years for investors with a more conservative approach to reach their retirement number.

NerdWallet estimates suggest that today’s grads may still be able to retire at 62, but they’d need to save 20% of their income annually and invest it as opposed to the roughly 6% that they’re saving and investing today.

Change What We Can Control

Let’s face it, we can’t change what we can’t control. College costs aren’t likely to drop anytime soon with the importance of a college education growing, and rent prices may strengthen further as interest rates rise and potential homebuyers back away from paying higher mortgage rates. Some costs are simply beyond the control of today’s grads. However, there are steps to be taken that could save grads money and help them do more with what they save.

NerdWallet has a couple of great suggestions, including living at home for as long as is reasonable in order to save on rent costs, as well as maximizing a 401(k) match through your employer. You certainly don’t want to leave free money on the table, and should almost always consider contributing at least up to the donation match in your employer-sponsored retirement plan.

But there are plenty of other suggestions that could prove valuable.

For instance, how you save can make a big difference come retirement. Investing in a traditional brokerage account can expose you to taxes each and every time you sell a stock, option, or mutual fund. Although long-term capital gains taxes can be 0% for low-income individuals, you’re more likely to wind up paying 15% or 20% in long-term capital gains taxes when selling long-term assets in your brokerage account.

You can completely eliminate taxes by opening up and contributing to a Roth IRA. A Roth IRA allows your money to grow tax-free over your lifetime, there are no required minimum distributions beginning in the year you turn 70 1/2 like its counterpart the Traditional IRA, and there’s no point at which you are no longer allowed to contribute to a Roth IRA — unlike a Traditional IRA, where you’re no longer allowed to contribute past age 70. Not having to pay any taxes could save the theoretical investors in NerdWallet’s report between $200,000 and $400,000 over a lifetime.

Another important question is what to invest in. On top of keeping your money from winding up in the government’s hands, new investors have to be able to trust the stock market once more. Stocks have returned an average of 8% historically, and there will certainly be periods, such as the Great Recession, where things get a bit bumpy and uncomfortable. However, the data doesn’t lie. While past performance is no guarantee of future results, all 33 stock market corrections of 10% or more in the S&P 500 between 1950 and 2014 were eventually erased by bull markets. Patience has historically paid off for long-term investors who pick out high-quality companies and hold them over the long run.

It’s also not a bad idea for younger investors to consider a more aggressive investment approach that focuses on growth stocks because they have such a long period of time to correct any investment mistakes. Allowing winners to run for decades at a time is a powerful tool that can eliminate quite a few bad stock selections.

Budgeting is another important tool that today’s grads are going to want to get themselves accustomed to. Far too few people have a good grasp on their cash flow, and if you don’t understand how your expenses weigh on your income, then you’ll have a very difficult time saving for your future. Developing a monthly budget should help boost your saving efficiency, and it’ll still give you the ability to play around with the numbers to ensure you continue to live a fun life, even while budgeting for your future.

Lastly, consider monetizing your hobbies. Today’s Millennials really value their free time — and their free time could actually be worth a boatload of money. Teaching guitar lessons, couponing to save at the grocery store, buying items at a garage sale then reselling them online, and pet sitting are all examples of personal hobbies that could turn into lucrative side businesses for today’s grads. Plus, doing what you love certainly doesn’t seem like work! Adding this extra cash to your monthly income stream could be the boost you need to move your retirement date forward.

Article By: Sean Williams, The Motley Fool as seen in USA Today

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.


Know The Rules for 0% Offers

Great article I came across from the folks at CardHub…it’s worth the read.  Be careful this Holiday Season…

Suppose, for example, that you’re interested in opening a new credit card account to finance a couple of big-ticket items from your child’s Christmas list. Let’s say they cost a total of $800, and you believe you can repay that amount within six months in the absence of interest. But things happen and it ends up taking you seven months instead. With a normal credit card, you’d end up paying around $2 in interest (assuming a 20% regular APR). With a deferred interest credit card, however, you’d pay roughly 27.5 times more (i.e. $55 in interest), easily eradicating any Black Friday deals that you may score.

In order to help consumers avoid such an unfortunate financial surprise in a supposedly merry time of year, CardHub evaluated the financing options available through 49 large retailers. Specifically, we identified which retailers offer deferred interest plans, and if so, how transparent their websites are in presenting key information about the terms of such plans. Our analysis reveals that many retailers offering deferred interest financing are less than up-front about the true potential costs of these plans.

  • 73% of major retailers offer a financing option. Of the major retailers that provide financing, 47% currently offer a deferred interest plan.
  • Some big-name retailers – including Apple, Macy’s and TrueValue – are among the least transparent about their use of deferred interest financing.
  • Disclosures are improving, evidenced by the average CardHub Transparency Score increasing from 6.9 in 2013 to 7.8 in 2015.
  • 35% of the deferred interest credit cards are issued by Citi and 29% are issued by Synchrony Bank.
  • Despite not having a deferred interest plan themselves, several retailers allow consumers to make payments through PayPal, whose “Bill Me Later” option has deferred interest.
  • 29% of the retailers that offer deferred interest provide consumers with an alternative, whereby they can take advantage of a first-purchase discount rather than special financing. The average discount is 16%.

Applying for a credit card does not automatically sign you up for a deferred interest plan, but rather one will be offered to you based on creditworthiness and active promotions. Depending on the retailer, you may be able to use the plan just in store or for both online and in-store purchases.

Article from CardHub – by Alina Comoreanu, Research Analyst

Are You Living Within Your Means?

One in five Americans spent more than what they earned in the last 12 months, according to a Federal Reserve Board survey released in May. Some might be relying on credit or dipping into savings to cover their spending because they are having trouble making ends meet. And, some are simply living beyond their means.

Regardless of the reason your spending exceeds your income, “overspending is harmful because it could be a sign you’re out of control with your finances,” said Leslie H. Tayne, an attorney who concentrates in debt resolution solutions and author of “Life & Debt.” Your overspending might be making it hard to pay bills, have money for emergencies and save for the future. It could lead to serious consequences, such as bankruptcy.

Here are five warning signs that indicate you are spending too much, how your overspending can hurt you and how to get your spending under control:

  1. You max out your credit cards and pay only the minimum.

If you’re maxing out your credit cards and can’t pay off your balances every month, it’s a sign that you’re relying on credit to supplement your income, Tayne said. “This is a hard cycle to break, especially if you can only afford to make the minimum payments each month,” she said. Not only can this hurt your credit score, but it can also leave you in debt longer than necessary.

If a high percentage of your available credit is used — in other words, most of your cards are maxed out — the credit scoring agencies consider this to be a sign that you are overextended and will likely lower your credit score. A lower score will make it harder for you to get additional credit and might force you to pay higher rates on that credit.

Paying the minimum on your credit card won’t necessarily hurt your score, but it could take you a long time to pay off your debt and cost you extra money in interest. For example, if you had a $1,000 balance on a card with a 16.00% APR and made a minimum monthly payment of $25 on your balance, it would take nearly five years to pay off your debt. And, you’d pay about $440 in interest, according to Capital One’s credit card calculator.

  1. You pay bills late.

About one out of 20 people with a credit file are at least 30 days late on a credit card or a non-mortgage account payment, according to an Urban Institute report.

Paying bills late because you don’t have the cash to cover them is a sign that you’re overspending, Tayne said. And it sends a red flag to your credit issuers, which could hike your interest rates or lower your credit limit, according to the National Foundation for Credit Counseling. You’ll also be hit with fees — which can add up quickly — and several late payments will hurt your credit score.

If you’re more than 180 days late on a payment, your debt typically is assigned to a collection agency or debt collector. Having debt in collections can lower your credit score and will remain on your credit report for seven years, according to myFICO.com. What’s worse is that your creditors or debt collectors can sue you and be allowed to garnish you wages to pay the debt you owe.

  1. You raid your retirement account.

You might think there’s no harm borrowing from your retirement account because it’s your money. About 20 percent of 401(k) plan participants have taken a loan from their account, according to the Pencil Research Council Working Paper. You can borrow up to half of your 401(k) balance, up to a maximum of $50,000, but Tayne said rarely is this a good idea. “Borrowing from your future is a risky move,” she said.

If you borrow from your retirement account, you will have to pay yourself back with interest — which can be lower than the rate of return you would’ve gotten if you had left the money in the account. So really, you’re just shortchanging your retirement savings.

  1. You use payday loans.

Although these short-term loans that typically have to be paid back in 14 days might be seen as a way to cover the cost of an unexpected expense, most people who get payday loans use them to cover everyday expenses, according to a report by The Pew Charitable Trusts. It’s certainly a sign that you’re overspending if you have to rely on payday loans, Tayne said.

There is a high cost to these loans. They come with extraordinarily high annual interest rates — APRs of 391% to 521%. And payday lenders will let you rollover the balance of a loan for a fee if you can’t repay the full amount when it’s due. If you roll over a typical payday loan of $325 eight times, you’ll owe more than $460 in interest and have to repay a total of nearly $800, according to the Center for Responsible Lending.

  1. You borrow from friends and family.

If you have to turn to friends and family for money, it’s a sign that your overspending has left you financially strapped, Tayne said. You might think it’s a good way to get an interest-free loan, but “being unable to pay back the loan can lead to tension and can ruin your relationship,” Tayne said.

How to Stop the Overspending Habit

If you’ve realized that you have an overspending problem, rest assured — there are different ways you can get your spending under control and create healthy spending habits.

  1. Create a budget.

The first step to getting your spending under control is to create a budget, Tayne said. Take a close look at what you’re spending money on and look for ways to cut back.

  1. Rely on cash.

By living on a cash- or debit-only budget, you can curb the impulse to overspend, Tayne said. She suggested setting a budget for each shopping trip and only bringing that much cash with you to avoid making impulse purchases.

  1. Get help.

If you’re buried in debt and can’t curb your spending, your best option might be to get professional help. The National Foundation for Credit Counseling member agencies provide free and affordable debt counseling and other money management services. You can find an agency in your area through NFCC.org.

Or better yet, consider your Credit Union for Financial Guidance. 

Credit Worthiness Matters – Impact on Car Insurance

You probably figure that if you’re a bad driver and collect some fender-benders or speeding tickets on your DMV record, your insurance company is going to charge you accordingly.  But what you might not have expected is that insurers also might slap you with penalties — sometimes hefty ones — if you’ve blown off paying a bill here or there.

Car insurance companies in all but three states — California, Hawaii and Massachusetts, where it’s illegal — use a driver’s credit history in the secret sauce of their underwriting formulas.  People with bad credit are considered higher-risk customers, so insurers often charge them more, explains Jill Gonzalez, an expert at WalletHub, a personal finance site that just published a study showing what insurance companies in what states penalize drivers the most for poor credit.

WalletHub asked the five biggest car insurance companies in the country for quotes for two imaginary drivers who were identical except that one test case had excellent credit and the other had no credit history.

“There is a strong correlation between one’s credit characteristics and insurance losses,” Gonzalez says. “The insurance companies usually look at the the credit history to see how the insured can manage his or her risk exposure.”

Across the board, the difference between quotes given to the “great credit” versus the “no credit” driver varied by 49%, but some fluctuations were much, much greater.

Credit obviously isn’t the only factor insurers look at to determine premiums, and different companies assign varying degrees of importance to this characteristic.  WalletHub’s study finds that Farmers Insurance seems to place the most weight on driver credit data, with a 62% difference between quotes given to WalletHub’s two hypothetical drivers.  Even Geico, the insurer WalletHub says “seems to rely on credit data the least,” has a 32% fluctuation between the two driver scenarios.

The results also vary widely by state; in Connecticut, the impact of great credit versus no credit only contributes to a 15% fluctuation in premiums.  In Michigan, however, it’s another story: WalletHub finds that credit status contributes to a 115% fluctuation in rates.

Gonzalez says the biggest issue consumers face is that a lot of companies aren’t up-front about their use of credit data in underwriting.  “The problem we discovered is that not all of the companies are transparent in letting their customers know that credit scores impact insurance premiums to a significant extent,” she says.

WalletHub looked at the websites of the 10 biggest auto insurers to see how soon, how often and how prominently they advised customers that their credit would be a variable in the eventual premium price they were quoted.  It says Progressive is the most transparent, but Gonzalez points out that a lack of transparency among many carriers means that drivers have to do a lot more homework if they have credit problems.

“Consumers with no credit have to do some serious research before deciding on an insurance company,” she says.


Article from Time Magazine Online – by: Martha C. White

3 Debt Payoff Tactics You Might Reconsider

Source NerdWallet –

Paying off your debt is an admirable goal and a great move for your financial health.  But some ways of doing it might hurt more than they help.  Withdrawing from your 401(k), draining your emergency fund or ignoring your monthly bills in the name of paying off your credit card debt may seem like good ideas in the moment, but they can have adverse consequences in the long run.

Dipping into your 401(k)

There are plenty of reasons not to use your 401(k) to pay off debt, but let’s start with the potential financial ramifications.  If you take money out early — that is, before age 59½ — not only will that money be taxed at your current income tax rate, but you’ll also pay a 10% penalty.

If your 401(k) has a loan provision, it is a more affordable way of paying off your debt. However, 401(k) loans also have downsides.  For one thing, any money you borrow won’t be earning a return until you repay it.  If you quit or lose your job before repaying the loan, the entire balance will come due soon after.  And if you can’t pay it off in full, it will be treated as a distribution — meaning you’ll incur the taxes and penalties of an early withdrawal. It’s a risky move.

Finally, by using your retirement funds to pay off your credit card debt, you’re potentially setting a dangerous precedent.  You’re making tapping into your retirement fund an option for sticky financial situations, which could help you justify withdrawals in the future, even if they aren’t absolutely necessary.  Unless you’ve exhausted all other legal options, try to leave your retirement savings alone for Future You.

Draining your emergency fund

Because of high interest rates on credit cards and low interest on savings accounts, it isn’t wise to keep a large cash reserve while carrying credit card debt from month to month.  However, it’s also not a good idea to drain your cash reserves completely to wipe out your debt.  Emergencies happen, and you need to have some savings in place to deal with them because a credit card isn’t an emergency fund.

The amount of emergency savings you should keep depends on your personal situation. As a starting point, everyone should have $1,000.  Some people — like small business owners, custodial parents or sole breadwinners — may need more, while a single young professional without a mortgage will probably be fine with a small fund.  Any savings greater than what you need for emergencies can be put toward debt, but don’t drain your entire rainy-day fund.

Neglecting your current bills

When you’re anxious to get rid of your debt for good, it may be tempting to cut corners elsewhere to pay it off as soon as possible.  But ignoring your monthly payment obligations to pay down debt isn’t a sound approach.  You’ll likely get hit with fees, and your late payments may be reported to the credit bureaus and remain on your credit reports for seven years.

Instead, pay your bills and minimum debt payments first.  Then, provided you have a small emergency fund already, put the excess toward extra debt payments.

The bottom line

Pay down your credit card debt aggressively, but don’t hurt yourself financially by withdrawing from your 401(k), draining your emergency fund or ignoring your monthly bills.  Instead, aim to bring down your debt by making more or spending less, and allocating the extra funds to your credit card bills.

Erin El Issa is a staff writer covering personal finance for NerdWallet.

40 Ways Your Budget is Full of Holes

Many budgets are like leaky buckets — they are full of holes. Most holes are small and hardly noticeable, but those little drips can add up over time. Well, it’s time to patch up your leaky budget and start saving a greater chunk of your paycheck. Here are 40 ways you’re mindlessly blowing through your hard-earned money every day.

See the 10 reasons you’re still living paycheck to paycheck >>>

1. Paying Too Much on Housing

Since housing is likely your biggest monthly expense, this is where you can really make or break your budget. Personal finance experts recommend spending no more than 30 percent of your income on housing. You can spend even less and save more by getting a roommate or moving to a different neighborhood or a city where it’s easier to save money.

2. Spending Too Much on Car Costs

Aside from housing, transportation is likely your next biggest expense. Buy a reliable and affordable used car, try to live close to where you work and consider taking public transportation to cut down on gas and maintenance costs.

3. Wasting Energy

Utilities can eat up about 7 percent of the average U.S. household’s budget, reports Lifehacker. You can lower that number by conducting an energy audit on your house to find energy leaks such as old windows or water heaters. Even renters can improve their energy efficiency by using insulating curtains and unplugging appliances. Every little bit counts.

4. Buying Movie Theater Popcorn

Movie theaters don’t actually make the bulk of their profits from movie ticket sales — concession sales are the real moneymakers, reports Yahoo Movies. Eat before you head to a show. Or if you’re a little more daring, sneak in your own snacks.

5. Not Planning Meals Ahead of Time

Keep your grocery budget under control by planning out your meals and shopping accordingly. One of my favorite meal-planning apps comes from Food.com. It combines meal planning and money saving all in one app.

6. Grocery Shopping Without a List

Maintain a running list of what you need to pick up at the grocery store to avoid making any unnecessary purchases. You’ll know exactly what needs replacing, and you won’t have to do any guesswork.

Related: 5 Simple Ways to Save Money on Your Next Grocery Run

7. Buying Coffee

America’s love affair with coffee shows no signs of slowing down. A 2012 survey found that the average American worker spends about $1,100 a year on coffee. Break this habit, learn how to make your favorite coffee drink at home and watch your savings soar.

8. Carrying Credit Card Debt

Credit card debt is one of the most expensive types of debt you can carry. Those minimum payments might seem low now, but they can cost you hundreds to thousands of dollars in interest. If you have credit card debt, make a debt reduction plan. For example, try transferring your balance to a low-interest credit card, and commit to paying it off for good.

9. Paying for Cable

Now is a great time to cut the cable cord. There are plenty of online streaming services, like Netflix, Hulu and Amazon, which cost a fraction of the standard cable service price. To save even more money, share a Netflix or Hulu account instead of getting an individual account for each streaming service.

10. Buying Brand-Name Products

Consumers find comfort in using brands they know and love, but oftentimes generic brands work just as well as their brand-name counterparts. Step away from brand names, and try a few generics. For example, you can save money by buying store-brand medications and Kroger breakfast cereal.

Read: 10 Generic Items That Are Exactly Like the Brand Name

11. Running the Thermostat All Year

There’s no reason to keep your thermostat running at the same temperature all year long. Ideally, you’d only turn it up a few degrees in the summer and down a few degrees in the winter. According to the U.S. Department of Energy, turning your thermostat back 10 to 15 degrees for eight hours during the day can save you 5 to 15 percent a year on your heating bill.

12. Ignoring Your Phone Bill

Check your phone bill to make sure you are not getting charged for services you don’t use. You might be paying for things such as unlimited data, texting and other features you don’t really need.

13. Drinking Bottled Water

In 2013, Business Insider reported U.S. consumers were spending on average $1.22 per gallon on bottled water, which was 300 times the cost of tap water (though the number could be even higher). If you’re still drinking bottled water every day, consider buying a water filter to save money.

Related: How Much You Can Save by Skipping Bottled Water

14. Using Regular Light Bulbs

Compact fluorescent lamps (CFLs) might not be the most flattering bulbs out there, but light-emitting diode (LED) light bulbs are surprisingly beautiful. They are also incredibly energy efficient. There are some upfront costs, but LEDs tend to last longer than traditional light bulbs, which can help you save money in the long run.

15. Smoking Cigarettes

This little habit can cost you big bucks. Quitting smoking can save you more than $8,200 a year — just think of what you can do with all that extra cash.

16. Buying Lunch at Work

You’ve heard it before, but buying lunch at work is a huge waste of money. Buddy up with your co-workers, and try “brown bagging” it at work. You can end up saving a good chunk of cash.

17. Eating Out for Dinner

Having dinner at a restaurant is a great luxury, but it can wreak havoc on your finances. Be mindful about how often you eat out. Even something as simple as eating dinner earlier in the evening can help you eat less and save more.

18. Ordering Appetizers

Restaurant portions are huge, so why order an appetizer when the entrée is already going to be more than enough? Eat a light snack about an hour before you eat out, which can help you resist the urge to order a starter.

19. Using Out-of-Network ATMs

When you use an ATM that is outside of your network, your bank and the ATM might charge you a fee. Find a bank that has plenty of ATMs in the places you frequent or a wide network of partners.

20. Requesting Faster Shipping

It’s hard waiting for your online purchases to arrive, but paying extra for expedited shipping is a waste of money. Patience is a virtue, but if you really just want everything now, sign up for a service such as Amazon Prime, which includes free two-day shipping on most items.

Read: 25 Ways to Save Money on Amazon

21. Withdrawing Too Much Money at the ATM

Overdraft fees cost customers $225 a year, according to the Consumer Financial Protection Bureau. Track your finances daily, or consider switching to a bank that doesn’t have any overdraft fees at all. (Yes, those do exist.)

22. Paying Unnecessary Bank Fees

Banks are desperate to get new customers in their doors. Shop around, and compare the offerings — you’ll likely find better and cheaper banking services somewhere else.

23. Collecting Stuff You Don’t Need

Does your baseball card, comic book or Star Wars collection add value to your life, or would you find greater value in cashing out? Even just trimming down a valuable collection can reduce clutter and give your bank account a boost.

24. Spending More Money on Snacks

Nielsen data showed Americans spend more on snacks such as protein bars, chips and beef jerky than they do on real food. If you plan your meals and shop with a grocery list, then you won’t need to fill up on unhealthy and expensive snack foods.

25. Signing Up for a Gym Membership

Once January hits, many of the treadmills at the gym are usually occupied, and the Zumba classes are bumping. But just a few months later, the place looks like a ghost town — what a waste of money. Skip the pricey gym membership, and try joining an exercise club. Or, download a cheap fitness app to get in shape.

26. Throwing Your Child a Huge Birthday Party

Your child will forgive you for not throwing them an expensive birthday bash. Many children don’t need a lavish, over-the-top birthday party. If you’re strapped for cash and still want to plan an unforgettable birthday party for your child, research creative DIY tips on how to build a cake, make party favors and more.

27. Shopping Impulsively

If you are considering making an impulse buy, wait 30 days and ask yourself if you still want or need that item. You might even forget about the item completely, which pretty much answers the question for you.

28. Buying Books

Paper books are definitely something to be cherished, but if you burn through books faster than a California wildfire, consider using a service such as PaperBackSwap.com to cut down on the costs. You’ll get to swap your collection with others online and get new titles mailed to you for free. You’ll just have to pay for postage for the books you send out.

29. Driving With a Dirty Air Filter

Did you know that driving around with a dirty air filter can reduce your gas mileage by 7 percent after 5,000 miles, which can cost you at least $100 a year? That’s according to TheSimpleDollar.com, and it’s recommended that you look at your car’s manual to learn how to clean the air filter yourself.

30. Buying “New” Instead of “Used”

Thanks to the internet, you can find pretty much anything you need in good, used condition at a fraction of the price. Not everything should be purchased used, but pricey items such as sporting equipment and furniture are great used buys.

31. Skipping Breakfast

Eating breakfast gets your day started on the right foot and can keep you from buying a huge, expensive lunch. Try cheap breakfast foods, like oatmeal or eggs, which will likely keep your stomach (and wallet!) full.

32. Paying Multiple Student Loans

Interest rates are still relatively low, so it could be a good time to consolidate your student loans. By consolidating, you might even be able to lower your monthly payments and extend your repayment period.

33. Ignoring Your Credit Reports

A good credit score can help you save money on everything from personal loans to a mortgage. Use a credit monitoring service to keep an eye on your score, and work toward building your credit.

34. Not Using Your Benefits Package

Some employers offer awesome benefits, like discounts on car insurance, free tickets to events, education reimbursement or personal improvement seminars. You work hard, so make sure you are reaping all the benefits you are entitled to.

35. Driving Around With Flat Tires

It’s advised that you read your car’s manual to find the recommended PSI and fill up your tires at your local gas station. The attendant can usually help if you need assistance.

36. Manually Paying Your Bills

A big piece of money-saving advice that many people don’t follow is automating your finances. Put your bills on autopilot to avoid any late fees or dings on your credit report.

37. Hitting the Bars

According to NPR, out of every $100 American consumers spend, about $1 of that goes to alcohol. Most of that money is spent at bars and restaurants, but the number could be far less if you host happy hour at your house instead.

Related: How Much You Can Save by Skipping That Extra Cocktail

38. Throwing Out Leftovers

In 2012, Americans threw out 35 million tons of food, which was nearly three times more than what they discarded in 1960, reports The Washington Post. Keep your food waste to a minimum by learning to use your leftovers. Or better yet, bring them to work for lunch the next day.

39. Buying Basic Items at the Grocery Store

Many warehouse clubs will give you the best bang for your buck on staples such as toilet paper, trash bags, laundry detergent and diapers. Bulk items usually offer better prices per unit — you’ll just have to figure where to store 140 rolls of paper towels.

40. Paying Too Much for Auto Insurance

Auto insurance companies are constantly offering new ways to save on coverage, so do an annual audit of your policy and shop around for better rates. Just like that GEICO commercial always says, “15 minutes could save you 15 percent or more on car insurance.” 

This article originally appeared on GoBankingRates.com: 40 Mindless Ways You’re Burning Through Your Paycheck