3 Silent Traps That Hold Back Your Finances

A lot of threats to our finances are external - from rising retail prices, sneaky charges or big red signs(sale!) at the mall.

Some are more internal - something we do to ourselves without realizing it.



Lifestyle Creep


At least this one is a bit famous. You get a raise or a little extra income and you "upgrade" your lifestyle. Worse is when the raise is actually enough to just combat inflation, so now you're actually on the road to debt.

To be fair, there are a lot of cases when "upgrading" your lifestyle is actually needed. Like when you use it to buy better/healthier food. Or be able to take safer public transport rather than walking at night (even for short distances).

Still, it's important to be mindful if the upgrade is really warranted.

Status Quo


So you did the math and somehow getting that smartphone tied with your provider's plan is really cheaper. You've already saved up for it, so it's not a  money drain. Fast forward to two years later, you're still happy with your phone and with your plan.

Same with that credit card. You've gotten some nice perks, and so you're a loyal customer. Same with your cable, internet provider, etc...

Nothing wrong with that. But the market keeps changing and sticking with the status quo may be silently costing you money.

There's no point in obsessing over these things, but every year or two, it's best to check that you're still getting the best deal for you.

Save-n-Splurge


You can make the daily sacrifices: not eating out, not ordering drinks if you do you eat out. You have a working budget and don't have credit card debt.

But then your goals are all buy, buy, buy.

I mean it's an important goal to buy your own house. And if you want a car, so be it. Even a smartphone, if you really want one and save up for it - unless you find yourself spending for it every year or two.

And that's the thing, every year there's this big spending goal. It good that it's structured - you have a goal beforehand and save up for it. But we should be careful that our goals aren't status symbols and fads.


Type your email address and subscribe


Or you can like me on Facebook, circle me on Google+, or follow me Twitter @thePFApprentice. It's free, you won't miss new articles, and you'll also get my free ebook: the Super Savings Guide.



photo credit: cypherone - Taiwan via photopin cc

No comments:

Post a Comment