Have you ever taken the time to look at your monthly bills and analyse the value of what you’re paying for? Sure, there are the payments you have to make for your necessary living expenses. You know you need to pay your bills for utilities and housing.
But what about the expenses you pay for monthly that aren’t strictly required to meet your needs? Are some of your lifestyle habits costing you too much money?
Here’s what to think about when it comes to evaluating the cost of your lifestyle — and what to do about it if it’s too expensive.
Are Your Lifestyle Habits Adding to Your Living Expenses?
Habits including streaming services, daily coffee, lunches bought at work, and more feel innocent enough. After all, they’re just a few bucks here and there. And you deserve a few little luxuries now and then!
But these costs — and that kind of money mindset — can do some damage to your cash flow and ability to save, especially when it comes to automatic payments.
Grabbing a latte every once in awhile is fine. Going out to lunch on a Friday with colleagues probably won’t bust your budget.
But it’s when you start doing these things daily — and adding little habits to your day-to-day activity — that your lifestyle costs starts creeping up and eventually, out of control.
Thankfully, there are a few exercises you can use to take a deeper look at your lifestyle habits and what it ends up costing you.
Use This Exercise to Check Lifestyle Creep
Here’s an example of one exercise you can try to make sure your habits aren’t costing you too much:
I used to be a loyal customer to Foxtel. Between what I was paying when I first subscribed and what I paid toward the end of the contract, the average monthly cost was $110.
$110 per month might not sound too bad, depending on your budget. But consider that I paid $110 per month for Foxtel for 12 months — which meant I spent a total of $1,320.
And guess what? I was a Foxtel customer for for 11 years, which ended up costing me in excess of $14,000!
Looking back at it now, did I ever receive $14,000 worth of value and services from Foxtel? Well, I do like Keeping Up With The Kardashians. But not that much!
Now it’s your turn. Sometimes all it takes is a little bit of math and a little bit of thinking to determine if your habits are truly delivering their monetary value. Just ask yourself:
- How are the habits that are costing me money?
- How much are those habits costing?
- Are they worth the amount I’m paying?
What did you find? Do you have any habits that aren’t delivering much value to you? I’d love to know what you realised wasn’t worth the continued cost — and what you’re thinking about cutting from your budget to make more room for what you actually value.
You can share with me and the entire community in The Savings Squad! Join the group that makes financial progress possible by giving you the tools, knowledge, and community you need to succeed.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances. No representation is given, warranty made or responsibility taken about the accuracy, timeliness or completeness of information.