You do some things out of habit. You take the same route to work. You brush your teeth at the same time every morning. You sit in the same pew in church.

Most of the time, habits make life easier. They free up your mind to make more important decisions. But sometimes, habits can hinder you from reaching your goals. In fact, your spending routines could postpone your dream retirement.

Budgets and Bad Money Habits

When my wife and I first started tackling debt, we began by creating a budget. At that point, we didn’t have kids yet and we were both making decent money, so we hadn’t been too worried about where our money was going. When we sat down together and looked at our bank statements to get an idea of how much we should budget in each category, I was shocked when I realized that we had been spending $1,200 on food every month! Immediately, we saw an area where our spending habits were draining our bank account . . . and our retirement fund. Now, we spend about $750 a month as a family of five—including three growing boys!

Investigating Your Spending

Seeing how much money we could save in that one area motivated us to look at other areas where we were spending out of habit instead of need. We realized that we could make some major progress on eliminating debt and saving for retirement by taking a hard look at where our money was going.

Your grocery budget isn’t the only area where your spending habits may be working against you. Here are some other areas to look at:

1. Insurance

To take advantage of discounts, you may pay some insurance premiums on a quarterly or annual basis. Since you don’t see that money leave your wallet very often, it’s easy to pay the bill without thinking about it. Check rates at least once a year instead of keeping the same insurance out of routine.

2. Gifts

When those special events come around, you probably feel societal pressure to give something. You don’t want to come across as uncaring, right? I get it! But don’t make it a habit to spend money for a gift just because you got an announcement in the mail. Don’t give in to others’ expectations.

3. Utilities

The amount you pay for gas, electricity, and water and sewer can creep up so slowly that it takes several months for you to realize what’s happening. It’s easy to pay the bill out of routine. Instead, look at the usage from month to month and year over year. You may discover that your kids need to take shorter showers!

4. Wireless bill

You may have a cell phone plan with lots of coverage, but you’re paying too much if the data goes unused. Don’t pay the bill out of habit. Take the time to see how much you’re using across several months, and change plans if you’re not using up your data. It could make a big difference in your budget.

When it comes to your money, you can’t go on autopilot. Paying bills out of habit could be costing you hundreds of dollars a month. By slowing down and thinking about how and why you’re spending, you make better decisions. And that means extra cash in your pocket—and in your retirement account.

How much should you be saving to reach your retirement goals? Find out with the free RI:Q tool!

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