These Bad Financial Habits Cost Me $4,000 a Year. How Much Are They Costing You?

One spouse uses a laptop at the kitchen table while another prepares food in the background.

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Planning for the future is a good way to stay on track financially.


Key points

  • Identifying places where you can cut back is the first step in resetting your budget.
  • Annual budget and insurance policy reviews are a good way to save money.

When it comes to personal finances, there’s no such thing as perfection. No matter how well we understand the way money works, we’re all a work in progress. For me, the goal is to identify where I’m going wrong and take steps to do better next time. When it comes to bad financial habits, these are the four I’m currently combating.

1.Tossing out food: $2,000

Given the number of people without enough to eat, the amount of food I waste by tossing it out is nothing short of obnoxious. According to the nonprofit organization Feeding America, the average American family of four throws out $1,600 worth of produce each year. If a family of four tosses $1,600 in apples, bananas, and cantaloupe, my husband and I throw out at least $800 of similar produce. And honestly, I suspect that figure is low.

I go into each shopping trip with a grand plan to eat clean. I fill the cart with fresh produce to promote that goal. But on busy days when my energy flags, it’s not a grapefruit I reach for. The guilt is intense as I fill my trash bin with the cucumbers, kale, and other healthy foods I should have used to nourish my body. I not only waste money, but I also waste a precious resource desperately needed by others.

Several weeks ago, in preparation for a move out of state, I decided to gather the food in our pantry and drop it at a local food bank. But first, I needed to check expiration dates. I have a terrible habit of running to the grocery store without checking to see what I already have at home. That habit leads to unnecessary duplicates. As I scanned the dates, I was horrified to see how many were near expiration or had already expired. It reminded me of how much food I waste by not keeping track of what we have.

Add to that how many leftovers we toss from restaurants, and I conservatively estimate that I waste another $100 per month. In total, that puts my annual food waste at $2,000.

To remedy the problem, I’ve adopted a habit I’m not particularly excited about. I’m only buying enough groceries for a few days, including produce. If we haven’t eaten the food in the house, I don’t go back to the grocery store. I’m also making a shopping list before each trip and checking the refrigerator and pantry before leaving. Unless I’m prepping for a blizzard, I’m determined to make quick trips every few days. As someone who loathes shopping, it’s not ideal, but I need to stick with it until I get into the healthy habit of consuming the food I buy.

2. Procrastinating: $300

I frequently write about the importance of annual insurance reviews and know how valuable they can be. I used to be good about reviewing our auto and home insurance policies every year but have allowed the everyday busyness of life to distract me. As I shopped for a homeowners policy for the new house, I realized it had been nearly two years since I pored over the details of our policies. I kept telling myself I would do it “next weekend,” but whenever a weekend rolled around, I found other, more important, things to do.

Last week, I finally reviewed our policies and figured out they no longer meet our needs. For one thing, I’d never signed the umbrella policy adding earthquake coverage. I’d love to blame that on our insurance agent, but if I’d reviewed the policies earlier, I would have noticed.

I also found that the liability coverage included in our homeowners policy is too low for comfort. Say someone comes to our front door to make a delivery. If the delivery person falls off the porch and hits their head or breaks their leg, it’s our insurance that will pay their medical bills. As quickly as medical bills add up, I realized we needed more liability coverage.

I spent time shopping around for new policies, curious to learn if another company could offer a higher level of coverage at a lower price. I ended up switching to Farmers for home and auto coverage, saving $300 in the process.

That’s $300 I probably could have saved last year, too, if I hadn’t procrastinated.

As mentioned, I don’t enjoy shopping. And yet I’m the one in my family who buys everything, from home furnishings to birthday gifts. I typically speed shop to reduce the pain of moving from store to store (or website to website). That means I rarely compare prices. I tell myself I’m saving time, but I need to admit that I’m probably wasting money. I guarantee I waste a minimum of $100 per month rushing to get my shopping done.

4. Allowing expenses to creep back in: $500

A year or so ago, I wrote an article about canceling all my subscriptions. I must admit, I was feeling pretty darn smug. I went over our budget with a fine-tooth comb, realized how many subscriptions we were paying for, and canceled almost all of them.

I can’t tell you how we managed to allow those expenses to creep back in, but we did. As I worked our budget this month, I realized how much we’re paying for Netflix, Amazon, Hulu, Acorn, BritBox, skin care subscriptions, and other items we can live without. Although we can afford the additional $45 per month, it makes no sense to pay for things we wouldn’t miss if I canceled them again.

I won’t kid you: I have no intention of canceling Netflix, Amazon, or my husband’s GQ box, but I will jettison the rest. It’s become clear that I will have to reboot this portion of our budget at least twice a year. Fortunately, it’s easy enough to do.

Despite my bad habits, I’m surprisingly dedicated to saving and investing. It’s that desire to prepare for the future that reminds me how important it is to cut down on wasteful spending.

The $4,000 a year that I’m wasting comes to a little about $333 a month. If I invested it monthly at 7% instead of tossing it away, there would be more than $55,000 extra in our retirement account. In 20 years, it would be nearly $164,000 — all because I reined in waste.

what about you? Are there leaks in your budget that could be plugged? Now may be the time for all of us to turn waste into savings.

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