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5 Things You Shouldn’t Spend Money On but Probably Do

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Good morning Loves.  As I continue on with my savings goals in 2015 I’m thinking about all the things I want to spend money on, but don’t.  This got me thinking about all the ways people waste money on items they don’t really need or don’t bring value to their lives but they buy them anyways.  Do you do this?

When I say waste money I am in no way judging people’s spending habits.  I am about to list five things I think people can avoid buying in order to save money but I myself am guilty of spending money on two of them.  I know I shouldn’t, but I do.  Can you guess which two they are?

Blow Outs

I am a huge fan of feeling pretty.  I like spending the day at a spa or half a day at the salon.  Two years ago I discovered The Dry Bar in NYC and I’m hooked.  I know it’s a colossal waste of money to spend $40 on only a blow out (no cut) but I do it anyways.  Once in a while (like once a year) I give myself a little treat and book an appointment to get my hair blown out by a professional.

A Room With a View

This is one upgrade I never pay for.  I don’t like heights so looking out the window is not on my list of things to do.  The concept of a room with a view is completely lost on me.  I much prefer to see a city by exploring it myself on the ground, not look at it through the window.  But that’s just me.  I know a lot of people pay a premium price for a room on a top floor overlooking something spectacular, but I’m not one of those people.

Bottled Water

Ah the concept of bottled water is a total consumer ploy.  I have seen bottled water sold 4 for $1 and I’ve seen it sold $1.79 per bottle.  I’m not talking about flavored water or Vitamin Water, I’m talking about plain old filtered spring water.  Never ever have I seen a commodity with such a variation in price and you know the crazy thing is people actually but it.

I have a reusable portable Brita bottle which allows me to filter tap water from anywhere at any time.  It’s much more eco-friendly than buying new bottles every time you need a drink.  That being said I do buy bottled water when I’m on vacation because it’s just more convenient than bringing my reusable bottle.

Decorative Light Switches

This is completely crazy to me.  I never understood people who buy decorative light switch covers in their favorite sports team, animal shapes or anything else.  It doesn’t add any function to the lights or to the room and it also doesn’t add any value to the home.

In fact I don’t think there is any benefit to paying $20 for a decorative light switch cover for every room in your home.  When you’re ready to sell the new owners probably won’t have the same taste as you do so you won’t even get your money back.

Bank Fees

My total pet peeve in life is bank fees…and I work at a bank.  I understand people have to pay for services but banks make money so many other ways they really don’t need to collect monthly account fees.

Banks make interest on our credit cards, loans and mortgages and they also make money with our investments so why are they charging for basic services such as monthly bank account fees?

Do you ever spend money on something but know you shouldn’t?

Photo from I’d Pin That

Savings update: I’m changing my habits

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Good morning Loves.  Well it’s the end of the first month in 2015 and you know what that means…time to check in on all the goals I set just 30 days ago.  My two major goals this year are to start saving money and lose 30 pounds.  Remember that?

My 2015 savings goal

I want to save at least $7000 this year and I mean really save.  I don’t want to put money in my savings account and then take it out whenever I “need” (I’m using that term lightly) to buy something.  I want to put money in my savings account every month and have it still all be there in December.  How does that sound?  It sounds pretty good to me.

I love it when people ask me why I don’t have savings, they’re like “But you don’t have debt?”  That is true but I still spend money and can’t save a dollar if my life depended on it.  There is always a bill to pay or always something to buy for the apartment or food to order.  I could rationalize eating out several different ways and yes I know this is a waste of money.

Why I’m choosing to save money this year

Every single January I grab a pen and paper and write out my finances for the year.  Of course they are never the same at the end of the year in December as they were at the beginning of the year in January, but it’s the thought that counts.  Every single year I set financial goals to save more, pay off debt and take a lovely vacation or two.  This year I’ve also added in the goal of buying pretty things for our new apartment.  So what’s the big deal?  Well I’m going to do all those things without using my credit card.  Why?  Because I’ve been in debt and I definitely don’t want to go back.

In my 20s I was over $50k in debt and by my early 30s I was out of it.  No it didn’t happen overnight but it did eventually happen.  It’s really easy to get into debt and it takes much more time to get out of it.  Those were very difficult years for me because I’m the type of person who wants everything done like yesterday.  I just wanted to snap my fingers or open my eyes and have all my statements show a $0 balance, but that’s not how debt works.

My savings in January

I’m proud to say this month I’ve successfully saved $1000.  That definitely puts me on the right track towards saving at least $7000 by January.  How did I do it?  To be honest it wasn’t that hard.  There’s really nothing to do up here in the cold Northeast during the winter so I nowhere to go and nothing to spend money on.

I could have spent the money shopping but I consciously made an effort to avoid the shopping malls and all their after holiday sales.  I ended up spending only $41 on three new pairs of pyjamas, they were already on sale plus an additional 30% off so how could I resist.

I feel like $40 is not so bad, trust me the damage could have been a lot worse.  I controlled my spending this month and it directly helped me save more.  That’s a win-win in my books.

Photo from I’dPinThat

Debt is NOT forever

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At least mine wasn’t.  Good morning Loves.  It’s a New Year and that means we’re all checking our credit card statements and bank accounts to see just how much of an impact the holidays had on our finances.  Did you know that money resolutions are the third most common goal people set in the New  Year, right after getting healthy and organizing their life.  Yes it’s true.

My friend Jackie at The Debt Myth is starting a crusade to help people realize debt doesn’t have to be forever.  When she told me about the idea I was immediately on board because 1. I really like Jackie and 2. I survived my debt so I want to let people know they can too.

Personal confession:  My debt is not forever because I want to use my money to travel more, especially to New York City.

When you’re in debt it seems like you’ll be in debt forever, trust me there were a lot of tears.  If you’re in debt or you’ve ever been in debt you know this is true.  When you have credit card or loan debt it seems like the statements are infinite and there’s just no light at the end of the tunnel.  But that’s just not true.

Do you want to be debt free this year or at least start on the path to becoming debt free?  This is how you can do it.  How do I know? Because this is how I did it.

3 ways to get out of debt this year:

Start making payments.  I know this sounds simple but it’s true.  Complaining and crying about debt doesn’t make it go away.  Cut some expenses (yes you can live without cable for a year and Netflix is cheaper) and put that money towards paying off your debt.  Set up automatic payments to coincide with your paycheck and always pay more than the minimum payments.

Get a second job.  Yes you will have less time to sleep and you will have less time with your friends but you’ll save hundreds, maybe thousands, of dollars on interest costs.  Find a part time job or start a side hustle and use all the income from your second job towards your debt.  It’s that easy.  When you get too tired or fed up just keep telling yourself it’s a temporary situation.

Stop spending.  The definition of crazy is repeating the same behaviour expecting a different outcome.  That was me 7 years ago – I was totally cray-cray!  I set up automatic payments onto my three credit cards and I got a part time job working at Victoria’s Secret but my debt wasn’t going down.  Why?  Because I was still spending.  After about six months of torturing myself I realized that my money mentality and spending habits had to change along with my behavior.  I quit spending money on anything that wasn’t necessary to live and it sucked, but it helped me become debt free.

The feeling of being debt free is like no other – it’s the ultimate high of satisfaction and accomplishment.  I still cried but this time they were tears of happiness not defeat.  Are you in debt?  If so I’d love to hear how you’re getting out of it.  Always remember #debtisnotforever

If you’re debt free how did you feel on the day you made your last payment?

Photo from Flickr

I’m finally getting an online bank

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As 2014 comes to an end and the New Year quickly approaches you may be setting a list of all the things you want to accomplish, places you want to go and new experiences you want to try in 2015.  I want to go to NYC and California next year and I want to save $5000.  Actually I would like to only save $2500 and have the wonderful benefit of compound interest do the rest – but that’s probably not possible.

This is a goal I set for myself each and every January and by this time in December do you know how much money I have saved?  $300.  Yep that’s it.  Between travelling, conferences and buying pretty things for my new apartment I managed to save absolutely nothing this year.  I know what you’re thinking – that’s pathetic.  Trust me I agree!

If money is there I’ll spend it

So next year I’m going to do it big a.k.a. I’m going to treat my money completely different than I did in 2014.  One way I’m going to do this is enrol with an online bank.  I currently bank with TD Bank and I absolutely LOVE them, but with a chequing and savings account attached to my debit card – Debit Visa no less – the temptation to spend is always there.  Gosh how I love the Debit Visa feature.

I’ve decided in the next couple of weeks I’m going to open an account with an online bank and start saving money in a place where I can’t touch it.  What better place to do that than with an online bank account that has no affiliation with my everyday expenses and can only be accessed within 48 hours.

Making a change in my money habits

I’ve never had an online bank before because I thought it was really inconvenient to transfer money between different institutions when I could just do it all at the same bank – but now I see the benefit.  Now that I’m 34 years old I’ve decided to get an online bank and get serious with my money.

In true Libra fashion I of course couldn’t decide if it was a good idea to keep my savings in a completely different institution or if I should just act like a responsible adult and stop spending money.  So I decided to turn to my friend Andrew from Money Crashers.  I picked his brain about online banks and here’s how the conversation went:

ME: What’s the main advantage of having accounts with an online bank?

ANDREW:  “(You) can save time over having to make trips to a traditional bank, there’s easier access to your accounts, and you might be able to find better interest rates as well.”

ME: Are there any downsides to using an online bank as opposed to a traditional bank?

ANDREW: You won’t have any face-to-face interactions with staff members – that’s important to a lot of folks. And if you are paid with traditional checks or in cash, that can make using an online bank quite difficult.

ME:  Why do you think people hesitate when it comes to online banking and using virtual banks?

ANDREW: I think some people just don’t trust the Internet, or aren’t comfortable with trusting their money or sensitive information to a website rather than an actual business – they might be concerned with security breaches. Others simply prefer the peace of mind of depositing their paycheck and managing their money through a traditional bank.

Do you have an online bank? Where should I open my account?

Photo from Flickr