No, this isn’t another frugal post about skipping your daily Starbucks!
You already know you should that!
Nor am I going to teach you how to make your own shampoo, or tell you to stop showering 3 days per week to save a buck. …
…what I am going to show you are 17 mistakes you are VERY LIKELY making with your finances without even realizing it. Correct just one of these financial crimes and you’ll put you and your family in a much better financial position!
In my humble opinion, luck has very little to do with financial success.
OF COURSE it plays a role…
…but your personal choices and hard work are the largest factors when it comes to either increasing or depleting your bank account. So let’s take a look to see how you can turn things around!
It pisses me off how many people contact me and say how lucky I am ‘Oh Gary, you’re so lucky’…and I just want to sit there and be like ‘Thanks for thinking I’m lucky, but remember that time when we were 21 and you were at the Jersey shore with hot chicks? I was working my ass off… Gary Vaynerchuk
NOTE: Now if you’re honestly living from paycheck to paycheck with no fat to trim, then something has got to give. You need to reassess your fixed expenses to see what can be done and then find a way to increase your income stat.
…and I will let you into a little secret. I don’t buy that you can’t do it.
There are opportunities out there if you seize them.
We want to go out all the time, live in a great apartment, buy new clothes, drive a new car, and travel any time we want. The truth is, you have to prioritize. My friend Jim once called to tell me that he’d gotten a raise at work. On the same day, he moved into a smaller apartment. Why? Because he doesn’t care very much about where he lives, but he loves spending money on camping and biking. That’s called conscious spending.
Crime: "Buying Life Insurance from Your Home/Auto Agent"
Solution: Use an "Independent" (Agent 10% - 70% Savings)
Do you know the difference between an independent and a captive agent?
…anywhere from 10% to 70% savings.
And NO, that’s not a typo!
(Ok I’m a life insurance agent so let’s get the insurance related financial crime out of the way first!)
A good independent agent can easily save you over 50% on life insurance.
That’s because they’re able to SHOP from multiple companies instead of being bound to one.
If you have a health issue or family history of disease, the savings can be even greater.
In short, if you have life insurance through State Farm, Farmer’s, Geico, AAA, you’re almost certainly paying 50% to 100% too much. Get a quote from an independent agency today!
Crime: "Spending Spree"
Solution: Create a Debt Busting Budget
Stop in the name of savings!
Once you have taken a cold hard look at your circumstances, the most important step is to draft a budget. Always remember there are financial crimes lurking everywhere and it will be easy to get lured right back into their trap.
This is imperative if you intend to save money for your future. A budget will enable you to take charge and stay away from those pesky money draining habits we all have.
It’s a reality check regarding what you make, what you have to spend and what you ultimately want. Quite often there is disparity between these facts and goals.
The idea is – if you don’t have the money (and that does not include access to credit) than you can’t afford it!
If you are serious about budgeting check out Rosemarie Groner at the the Busy Budgeter. She has some of the best advice on the web about how to successfully budget.
Don’t tell me what you value, show me your budget, and I’ll tell you what you value. Joe Biden
Crime: "Waste Not Want Not"
Solution: Take Advantage of 401K Matching
We’re here to serve and protect – so I think it’s time to get into the nitty gritty of saving you some serious cash!
You’re in control of your future and can change your circumstances at any point. If you follow any of these 17 tips I guarantee you will be in a better place this time next year.
Do you have an employer matched 401(k) program? If so, you should redirect as much money as you can into it.
Obviously this depends on how much debt you have and how close you are to the edge.
That being said, the matched funds will likely benefit you more than the interest lost if you continue to carry some debt.
In conclusion, these plans are a true gift and if you are lucky enough to have one, you need to take advantage of it today!
Paying off your credit card debt is important, but investing up to your employer 401(k) match first makes the most sense mathematically. If you want to optimize your finances to the fullest extent — contribute to get the match and pay your credit card debt off aggressively with the remainder of your discretionary income.
Crime: "Overdraft Overdrive"
Solution: Review Your Fees, Slash 'Em, Cut 'Em & Sock the $ in Savings
Paying fees is a criminal act! Man when I think about the fees I’ve blindly paid over the years I get MAD. Yep. Red with rage. What was I thinking????
Well I’m here to tell you, Brenda and I are fee phobics. If you knew how much money you flushed down the toilet over the years through neglect you’d be mad too.
This is the most stealth of all financial crimes.
Sooo what sort of fees am I talking about? Banking fees, credit card fees, late fees, NSF fees, parking tickets and the list goes on. These are all negotiable or altogether avoidable expenditures.
….and the way we just accept them is sad.
Don't Just Allow Your Financial Crimes to Continue - Review Your Circumstances
Take some time to see if your credit card has gone up to 20% – if it has it’s time to apply for a new one. Many lenders offer 0% interest when you transfer a balance! Why not take what you would’ve given to them – and sock it away?
The worst fees of all are ATM fees. They are truly highway robbery! At $4.52 per transaction – these fees have increased 20% over the past 5 years.
This a great example of expenses that go under the radar. Think about it! If you regularly use an ATM outside of your network – let’s say once per week over a year it would cost you about $235.00.
That’s nothing to sneeze at.
The bottom line: When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Warren Buffett
Crime: "Closet Cable & Phone Addiction"
Solution: Toss Services That Aren't a Necessity: Cut the Cable
Do you love Big Little Lies? If so, it means you are paying for HBO (the most charming of thieves)!
Costs like this add up every month. You could toss out TV viewing time altogether or simply cut back on the hit by swapping cable for Netflix.
Streaming HBO costs $15.00 per month while Netflix is $10.00 per month. This may not sound like earth shattering savings but remember what I said – little numbers snowball into large numbers fairly quickly when you change your lifestyle.
How about your cell bill? You don’t need all the bells and whistles – why not cut it down to a very basic plan? Have a landline? Cut the cord. Electric bills sapping you? Be more vigilant about the temperature. Running heat and air conditioning day and night will slam you.
As you can see there are tons of way to cut off and cut back on services to save some extra cash.
As Americans, we have the right to object to these insulting descriptions, and we use that right, as we should! However, the truth is that we (yes, even you) do end up leaving a surprising amount of money on the table in a variety of ways. USA Today, 20 Ways Americans Are Blowing Their Money
Crime: "Impulse Racketeering"
Put Your Financial Stability Ahead of Immediate Gratification
Desire is the root of most crimes 😉
CURB IMPULSE SPENDING. I am going to say it again. Don’t buy what you can’t afford. More times than not that amazing TV that’s on sale for a fantastic “never to be seen again price” is going on your credit card.
No problem….right? WRONG!
It will put you into the cycle of ongoing compound interest.
You’re going to put the TV on credit because you really can’t afford it and now it’s likely you will pay far more for it than it will ever be worth.
Let’s use that TV as an prime example of what is wrong with credit card debt. You will be shocked to see what the true cost of an impulse purchase is:
Acceptance of Compound Interest May Be Your Most Costly Financial Crime
Great investing requires a lot of delayed gratification. Charlie Munger
Consider that $2500 TV – you love it and the price at Costco is a super deal.
…BUT you can only afford the minimum payment on your credit card. Typically the minimum payment is determined by paying off about 2% of your total balance (this varies). This payment goes toward paying off interest and the amount owed.
If you have nothing else on that card your payment may be as little as $50.00. But let’s say you have a credit card with an APR of 18%. Incredibly $38.00 of your $50.00 payment covers the interest and only $13.00 is put towards your purchase.
We know you are strapped for cash so it’s unlikely you will be making more than the minimum payments. If you continue down this road it will take you 28 years to pay for that TV! The total cost to you? A whopping $8397.00 in total.
If this is not a financial crime I don’t know what is!
Makes you think doesn’t it? Click here for the total break down. The Balance does a great job of illustrating the true cost of credit cards.
Crime: "Vice Squad"
Eviscerate Your Vices
Now some gritty talk. Have you been indulging your vices?
Do you smoke, drink or love to have a daily morning latte and muffin from Starbucks?
If the answer is yes to any of the above you’ve got some thinking to do.
There is a steep price tag attached to these purchases. Higher than you want to pay if you would like to put away some money and change your circumstances.
These luxuries can make the difference between saving for your retirement and winging it.
My humble advice is to reassess what these things actually mean to you and trim the fat.
Today NOT tomorrow.
Here’s a rule I recommend: Never practice two vices at once. Tallulah Bankhead
For those of you in doubt, let’s take a look at the hit these indulgences can take over a year:
- If you’re a light smoker, which statistically means you smoke about 10 cigarettes per day (or 3.5 packs per week) you’ll shell out $840.00 per year for this habit! All money that you could’ve socked into savings.
- Do you love wine? Even if you are a light drinker – a small glass of wine every day (give or take) of an average bottle of wine which would cost about $9.00 a pop would drain your account of approximately $432.00 per year! …and if you are honest it will probably cost you more if you are drinking regularly. This doesn’t account for drinks out or sharing with anyone else.
- Love Starbucks? They love you too – or more specifically they love your money. If you buy a $4.00 Grande latte and a $3.00 pumpkin cheese muffin 7 days per week it’s going to cost you a staggering $2352.00 per year.
Combine these habits together and you’re talking about a small fortune 🙂 an eye popping $3624.00
Crime: "Glamorous Gluttony"
Eating Out Will Eat a Hole in Your Wallet
Are you handcuffed to gourmet food?
Restaurants have become part of our daily lives. 30 years ago, it was a treat and now – well…take out is just a phone call away. Who doesn’t love that you can have Indian or Chinese in the same week? Unfortunately, all of this choice comes at a cost.
Cheapism did a great evaluation of having chicken meal at the Cheesecake Factory vs. making chicken at home.
Even after adding 25% to account for having to buy more ingredients to make a home cooked meal – you still pay half as much when you make it yourself.
Let’s say the difference between eating out and and eating at home is $8.00 vs. $16.00. Using those numbers and allowing for a couple of meals out per week, it’s going to cost you $768.00 per year! If you’re a foodie this would be a vastly underestimated figure. As you can see restaurants put a hole in your budget.
I’m against eating at a restaurant when you’re deeply in debt, and you’re trying to get out of debt. About 80–85% of what you pay for a meal in a restaurant has nothing to do with the food cost. It has to do with the experience, the building, the labor, the preparation of the food—the whole thing. Dave Ramsey
Crime: "Mindless Threats to Wealth"
Organize Your Life - Eliminate Waste - Be Mindful
OK I am looking for a confession from you – are you mindful?
This is a very serious question. There is so much going on in our daily lives that it’s all too easy to overlook important details.
Multitasking is an unfortunate consequence of our internet driven world. Social media, phone calls, conversations often happen simultaneously, leaving a lot of room for mistakes and oversight. How many times have you lost something – a ring, phone or keys?
Replacements are costly.
The good news is, with a little attention and organization you can keep your belongings safe and sound. Wake up and think about what it is you are doing. It may take more time upfront – but in the end it will save you time and money!
You can take these savings and put ’em in the bank!
The best way to capture moments is to pay attention. This is how we cultivate mindfulness. Mindfulness means being awake. It means knowing what you are doing. Jon Kabat-Zinn
Crime: "Listless Living"
Always Shop With a List
Does your criminal activity include flying by the seat of your pants when you go shopping?
Brenda and I used to do this. You know the scene – the kids are hungry and the fridge is empty so you dash out to the store to pick up ingredients...no list, no planning.
You grasp around in the dark for the right ingredients. You load up your cart and then you see chips.
Mmmmm chips. Your tummy is growling so you start to impulse shop.
How about some guac and some sour cream? Hey that ice cream would be perfect…annnnnnnd…..! Well you get the point.
Suddenly you bill has gone from an anticipated $30 – $40 bucks to over $50!
Some shoppers head to the grocery store without taking inventory of what they already have at home. Before you buy one too many loaves of bread or gallons of milk, check your refrigerator and pantry. Snap a picture of what you already have or make a list of what you know you’ll need. Nerd Wallet, 12 Ways to Save on Groceries
Sticker shock aside, you get home and find out in fact you missed out on three integral ingredients and have to make a last minute stop at the dreaded overpriced “convenience” store which tacks on another $15 bucks.
Shopping fail! Brenda and I now plan out our dinners one week in advance and even freeze meals for convenience and savings. It’s been a huge financial win for us and you too can trim a lot of fat by shopping with a list!
Crime: "Sale Malfeasance"
Unsubscribe From Advertising Lists
Are you an online offender? Come on – we all go shopping online?
I think it’s something we all do at some point or another. You sign up for an email account to make check out easier and tick the box to be notified of special offers.
So your email box is pinged every time there is a sale.
50% off! 75% off! BUY NOW, HURRY!
It’s pretty tough to resist items that have been slashed for clearance when it’s your favorite store.
Sooooo of course you check it out. You’re just looking after all!
But there it is. The item you have been wanting all year – and NOW it’s manageable – hey that’s what credit cards are for. Emergency expenses, right?
You can’t afford it and the temptation is just too much. So eliminate it. Take yourself off the mailing lists and you won’t have to worry about it ever again.
Identify where you spend money mindlessly. When you know a store too well, especially if you are a “preferred customer” you will feel more comfortable spending money. Stay out of the mall, local department stores, and other places where it feels good to spend. If an online store is courting you via email, unsubscribe. Be More With Less, 10 Ways to Help You Stop Shopping for a While
Crime: "Lavish Offence"
Pare Down to Essentials - Unload the Unnecessary
There’s a wanted poster out – for your wasted belongings!
You may be richer than you know. I kid you not. I dare you to go through your house or apartment with a critical eye. I bet there are a plethora of items that you never even look at anymore.
Brenda and I did this last year. We went through all the clutter that built up over the years and with three young girls – you can imagine there was a lot of surplus items.
Baby clothes, toys, lamps, kitchenware and electronics we had long since abandoned were just some of things we found.
So we gathered everything up and had a garage sale – and can you believe we raked in $1k to unload things that were just gathering dust?
Although planning and running a garage sale takes a lot of time, you get to pocket all the proceeds. And that can add up to some serious cash. According to Statistics Brain, a research group, garage sales generate $4.2 million in weekly revenue. Consumer Reports, 7 Ways to Make the Most Money from Garage Sales
Crime: "Spendthrift Assaualt"
Make Thrifty Purchases & Accept Hand-Me-Downs
Are you perpetrating excessive retail spending?
Did you know as soon as you drive a new car out of the dealership parking lot it plummets in value?
Then you can calculate a loss of 10 – 15% for every year you have it. Buying a slightly used car can save you quite a bit of money and you can get similar savings if you buy other used items.
Brenda and I almost always look for pre-owned solutions before we opt for new. …and the savings have been HUGE. There is a big difference between buying a high chair new and purchasing a slightly used on Craig’s list.
An even better option is inheriting hand me downs from family members. Score! Don’t overlook flea markets, vintage shops, Ebay and Craig’s List. They can really whittle down your costs.
Thrift stores sell gently used clothing at a deep discount. Many stores also have regular sales or a weekly special. A thrift store in my area has a “50 percent off anything with a yellow tag” sale every Wednesday. Just make sure you’re shopping at a true thrift store and not a vintage clothing store. The difference: Vintage clothing stores sell trendier older pieces at a markup. Thrift stores sell older and newer clothes at a discount. Money Talks News, 23 Top Tips to Save Money on Clothing
Crime: "Gambling with Your Future"
Do the Hustle! Side Hustle That Is!
Although debtors prison is long gone – you may still feel trapped by your lifestyle! If you’re broke – get moving!
When I first started my career in life insurance things were TOUGH.
Brenda and I were on the verge of chucking it all in when my site started to generate leads and income. The path of an entrepreneur is rarely straight.
It’s full of peaks and valleys. To find your financial footing – sometimes you have to suck it up and put some extra leg work in.
In order to make ends meet I had to take up a second job to pay the bills.
Focused. I’m a hustler. And my hustle is trying to figure out the best ways to do what I like without having to do much else. Mos Def
Was it fun?
BUT that being said, using time that might have been spent on Netflix to move my family out of debt was really motivating. It’s been ages since I had to have a side hustle – but I STILL concentrate on having multiple streams of income.
It just makes money sense.
Crime: "User Usery"
Still Have a Credit Card? If So Use One With Bonus Points
Credit cards or loan sharks?
Not all lenders are created equally, so if you MUST have a credit card there are some pretty good ones out there.
Bonus points can be used towards travel or purchases – which makes using credit a little more palatable. The key to this “strategy” is to know the rules and monitor your points and cards.
Companies often change their policies and points expire and miles devalue.
So my best advice is to be sure to manage the balance – paying it off in full each and every month if you can and keep an eye on your points and bonuses to make sure you are getting the most bang for your buck!
Credit card sign-up bonuses offer a quick way to earn hundreds of dollars’ worth of rewards by using your card regularly, but the best deals don’t always stick around. The largest bonuses typically come from travel credit cards — airline- and hotel-branded cards especially, but also general travel cards. Click here for Nerd Wallet’s Suggestions, Best Credit Card Sign Up Bonus Offers od 2017
Crime: "Impersonating Royalty"
You may be robbing yo’ self if you’re not couponing!
This goes back to planning your meals and expenses – as you can see there is a common thread running through my advice!
With some foresight you can really save some serious cash.
Yeah I know a lot of people think of couponing as an old fashioned habit – but it’s alive and well! TRUST ME! Money crashers has a great guide to extreme couponing.
Their results have been amazing – saving up to 84% on groceries. WOW! The average American spends between $500 – $1100 on monthly shopping (groceries, toiletries, clothing, pet products and entertainment).
On the high end this is $924.00 savings per month. Ok so you may not achieve this result immediately but you sure can save a lot of cash with some planning.
You know you can make some sacrifices to get from the high-end of that range to the low-end. But can you really reduce or even eliminate some of these costs without giving up on good nutrition and hygiene? You absolutely can! Click here for Money Crashers “Extreme Couponing 101: How to Extreme Coupon and Save 84% on Groceries
Crime: "Identity Theft"
Fake It Til You Make It
Impersonating a happy, successful person may be the best thing for ya’!
If you believe you are broke you will continue to live that reality. No matter how difficult it was during my lean times, I never once referred to myself as down and out.
Nope – NEVER!
Words have a life of their own and your attitude plays a huge role in the way your reality unfolds. When fledgling entrepreneurs come to me for advice I always tell them that they should fake success until they make success a reality.
What I mean by this is to believe in your abilities ESPECIALLY when you fail…and let me tell you we all fail. It’s the ones that believe in themselves and soldier on that make their dreams come true.
People who succeed have momentum. The more they succeed, the more they want to succeed, and the more they find a way to succeed. Similarly, when someone is failing, the tendency is to get on a downward spiral that can even become a self-fulfilling prophecy. Tony Robbins