# Financial Bad Habits?



## crazyjackcsa (Aug 8, 2010)

We all have them, whether we admit them or not is another thing.

What bad habits do you have?

For instance, I have a "lunch date" day with a friend at work. Every Monday we go out to lunch, nothing fancy, just a Sub from subway or something. 

Total cost, $7 a week.

The reason I ask, is because I just spent quite a bit on a completely frivolous expense.

On a whim I dropped $2,000 on a car I don't need, but wanted. It also means our family has 4 cars, but only 2 drivers.

Obviously the most responsible thing would be to save that money and invest it or put it on the mortgage, but I didn't.

I don't mean to rationalize it, but I have a budget, and I stick to it. It's a monthly budget that isn't hard and fast on what I spend, as long as total spending is below a certain number.
Anybody else have a bad habit like lunch out, or a large expense that wasn't needed?


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## 72camaross (Apr 26, 2010)

Some days or maybe an entire week I get too lazy to make my lunch so I have to buy it at work. It's not a cheap place to eat and there's no other option. If I was to eat everyday at work it would probably be around 75$/week.

I hate my life when I get into that rut! haha


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## the-royal-mail (Dec 11, 2009)

I don't have many. At one time I was pretty clueless, but the journey of life, and the fine posters of CMF have taught me a lot about proper money management. Any bad habits have been identified and eliminated. About the worst thing I do now is waste my pocket money, causing me to have to withdraw more from the bank every week. Assuming you consider takeout food, groceries, car washes and Blockbuster video rentals to be wasteful. I consider them normal life expenses, so I don't address that issue.

Although I question the rationality of your car purchase, I don't see it as a financial bad habit.


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## slacker (Mar 8, 2010)

It's not morally wrong to spend money. If you are sticking to your budget, and are inline to achieve your financial goals, then I don't see anything wrong.

Now, if you are unhappy about how that money is spent, then maybe you need to rebudget. (i.e. put that $7/week money in a separate account when you receive your paycheque) Use the "pay yourself first" method so that you won't have free cash sitting around your bank account. And of course never keep a balance on your credit card.

My financial goals are simple:

1. max out RRSP
2. save 30% of after tax income for house down payment
2. 20% (family expense)
3. save 5% for medium term "fun" like vacation, or toys
4. allocate 2% for charitable donations
5. save 4% for "auto repair fund" (irregular response like repairs are hard to deal with in a budget)

As long as my financial goals are met, then I don't stress about how I spend my money. I never carry a balance on my credit card, so if at the end of the month, I have less money in my chequeing account than I started with, I know I need to modify my spending habits.


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## ashby corner (Jun 15, 2009)

I eat lunch out probably once a week. Anything from subway to a pub, and probably average 15/week. Shouldn't be doing that.

on 'bigger' ticket items, I buy (on average) an expensive instrument once every 12-18 months. I do NOT need them. I have a fleet of expensive guitars. I often sell them off, but rarely do I make a profit.

It has now been 12 months since my last purchase...hopefully I can make it at least another 12 (or more!)


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## crazyjackcsa (Aug 8, 2010)

slacker said:


> It's not morally wrong to spend money. If you are sticking to your budget, and are inline to achieve your financial goals, then I don't see anything wrong.
> 
> Now, if you are unhappy about how that money is spent, then maybe you need to rebudget. (i.e. put that $7/week money in a separate account when you receive your paycheque) Use the "pay yourself first" method so that you won't have free cash sitting around your bank account. And of course never keep a balance on your credit card.
> 
> ...


I've met my goals, and have a plan, so this money isn't earmarked for the plan, but it could put the plan ahead even further.

I guess my point is, we aren't all really financial saints, even if we do have a plan, there are things we do that fly in the face of what the gurus say we should do. 

I didn't say the car is going to add to debt, it won't, and there is money for a weekly fast food lunch, but while it doesn't put me behind, I don't end up ahead.


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## jamiechese (Jul 13, 2010)

Hey Jack
I was and or am about to do the same thing you have done. Now I dont know whether I am justified in selling my car and buying another but it will most likely wind me up spending a grand or two. Which WILL eat into some of my savings. Now...I am only 18 and the money I spend will be regained before winters end although the question I keep asking myself is it really worth it. I will only have the car until next September when I go to school.

I wanted to get rid of the car because its a 2000 Honda CRV and the repairs are starting to cost a lot. Just recently 450$ to repair some fuel system part. Was pretty stupid.

I just cant decide whether its worth dumping more money into the car or spend more money upfront for a newer car.

Note: I had my eye on a dodge charger, it was cheap and only thing wrong with it was it had gotten keyed. Although it may not be a good choice because my insurance would go up.

Now, I could go both ways because I love cars and love nice looking cars although at the same time I love saving money. So I am at a crossroads atm . Although I definitely know the more rational choice but I dont know the more enjoyable choice .


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## Dana (Nov 17, 2009)

Some would argue that I spoil my kids. They have a pretty good inventory of books and toys. I don't give them things for no reason, but birthdays and Christmas are pretty lucrative for them. 

Also, and maybe this is because I spend a lot of time here, home comfort is very important to me and I can easily convince myself that a modern convenience/upgrade/home improvement is a need instead of a want. It doesn't help that my husband is a DIY hobbyist and my quest for up to date, contemporary improvements feeds his desire for home projects to do.


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## jamesbe (May 8, 2010)

If you live to not spend money, what a sad life you will live indeed.

Money is for spending, yes saving money is good but don't obsess about it. Seriously $7 a week on subway, who cares that's nothing really (unless you only make $7 an hour ).

As long as you meet your goals that are realistic you still need to enjoy life.

I spend all my extra money on cars, but it is my expensive hobby. Bought a car for the wife on a whim, we have 3 cars, 2 drivers are well, two of them barely ever move. But when I think of getting rid of them, I think that my life would suck since I use one for racing and the other to tow the race car. 

So have fun, just keep that end goal in sight.


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## andrewf (Mar 1, 2010)

I use my work cafeteria, even though I could bring lunches from home. I rationalize that it is only $3.40 for a generous sandwich with a side of veggies seems reasonable if it means I don't have to have the same sandwich every day made from home.


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## kcowan (Jul 1, 2010)

The secret is to maintain a balance. Going through life with a tight budget can be a pain. So there needs to be a plan. You say you have a plan to save. Yet it sounds like your plan is not tight enough.

We budget for meals at expensive restaurants. It is because we eat well at home and need to reward ourselves when we go out with a better meal than we eat at home. We don't question these expenses. Similarly we budget for TV, telecom and cell phones. Much of this expense would be considered extravagant. But then we save a lot of money on cars


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## Square Root (Jan 30, 2010)

I think the only financial bad habit is not having a plan. if you have a spending and savings plan that you can stick to who cares what you chose to spend on?


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## K-133 (Apr 30, 2010)

I agree - there has to be balance - at least for me.

I think all of the focus on savings really takes away from the real foundation of financial stability and prosperity, which is cash flow. Savings is a risk mitigation effort to further stabalize cash flow. And I think that the constant barrage of slapping people's hands about savings dilutes the message of financial stability through cash flow.


I live to enjoy life. And to do that best, I need to spend responsibly. This includes budgeting my meals, while also recognizing that having a fantastic night out every couple of weeks is a great reward for keeping things on track - not to mention nurturing my marriage.

I enjoy things like movies, food, boating (wind powered), and mostly, just relaxing with my family. Other priorities are to develop my wife's art into a business. We save for the business, and spend on what we enjoy. One day, the savings will be spent as the business will require capital to grow and the cycle will continue.

And yes, we have savings aside to mitigate the risks to our future cash flow.

Overall, I think it has been our willingness to indulge in what life provides in a responsible manner, which has nurtured further personal growth. If we would have focused too much on savings and adopted an impoverished mentality, that likely would have held us back from our current degree of satisfaction in life and confidence in our future stability.


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## K-133 (Apr 30, 2010)

Square Root said:


> I think the only financial bad habit is not having a plan. if you have a spending and savings plan that you can stick to who cares what you chose to spend on?


Well put.


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## slacker (Mar 8, 2010)

@crazyjack: I don't understand why some people frame the question of spending money as "good" or "bad". This isn't a game, and you don't win a prize when you die if you have more money. And you can't take it to the grave.

Spending money (or not spending money) is a morally neutral activity.

If you want to move retirement up by a year and give up the weekly lunch, than set that goal, and adjust budget accordingly. On the other hand, if the enjoyment of that weekly eat out with friends outweights earlier retirement, that's fine too.

What we can do is to be informed about our choices, and their consequences.


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## Eclectic12 (Oct 20, 2010)

the-royal-mail said:


> ... About the worst thing I do now is waste my pocket money, causing me to have to withdraw more from the bank every week. Assuming you consider takeout food, groceries, car washes and Blockbuster video rentals to be wasteful. I consider them normal life expenses, so I don't address that issue.
> 
> Although I question the rationality of your car purchase, I don't see it as a financial bad habit.


Hmmm ... IMHO, it's not the categories (ex. takeout food, videos or groceries ) but how the amounts and use all add up. 

Take the Blockbuster video rentals - if it fits your budget and you enjoy it, fine. If you are like some of my friends, they spend a lot to rent videos that they watch few of - what's the point?

Same thing with takeout - if I've working tons of overtime and don't have time to cook as much, naturally the takeout goes up as has my income. When it's simply laziness - then I know it's time to cutback.

Or perhaps the best example is from my mom - does it really make sense to drive twenty minutes out of her way to "save" two cents on five cans?


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## Eclectic12 (Oct 20, 2010)

Square Root:
I think the only financial bad habit is not having a plan. if you have a spending and savings plan that you can stick to who cares what you chose to spend on?

K-133: Well put.


Hmmm ... perhaps there are some unwritten assumptions you are not including?

Or it is a financial "good habit" to plan to spend 98% of income on dinners, vacations, parties etc. and 2% on savings. I know I could stick with that plan .... *grin*


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## crazyjackcsa (Aug 8, 2010)

slacker said:


> @crazyjack: I don't understand why some people frame the question of spending money as "good" or "bad". This isn't a game, and you don't win a prize when you die if you have more money. And you can't take it to the grave.
> 
> Spending money (or not spending money) is a morally neutral activity.
> 
> ...


I'm not framing it as a moral issue, I'm framing it in a habit issue. Biting you findgernails is a bad habit. Leaving dishes on the coffee table is a bad habit.

There is a lot of "patting ourselves on the back" on the board, and sometimes it's nice to step back and realize that we all have little things that are bad habits.


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## kcowan (Jul 1, 2010)

crazyjackcsa said:


> There is a lot of "patting ourselves on the back" on the board, and sometimes it's nice to step back and realize that we all have little things that are bad habits.


I think the general feeling on this board is that you need a plan. And you need to follow the plan. There is no attempt to assess goodness or badness to the habits of people. Except if they moan about an outcome without a plan.


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## Four Pillars (Apr 5, 2009)

crazyjackcsa said:


> I've met my goals, and have a plan, so this money isn't earmarked for the plan, but it could put the plan ahead even further.
> 
> I guess my point is, we aren't all really financial saints, even if we do have a plan, there are things we do that fly in the face of what the gurus say we should do.
> 
> I didn't say the car is going to add to debt, it won't, and there is money for a weekly fast food lunch, but while it doesn't put me behind, I don't end up ahead.


I'm a bit late to the discussion...

Just wanted to add that everyone spends money they don't "need" to spend. Hobbies/vacations/restaurant meals etc are all non-essentials.

It sounds like cars are your hobby. Is that a waste of money? For me it is, but for you it might be a source of joy/entertainment/speed rush which makes it worthwhile.

Lunches out? So what? I eat out once or twice a week and it's a social thing. Nothing wrong with that. I also like expensive beer (Steam Whistle). 

As others have said, if you have a good financial plan and stick to it - then ALL your spending is "perfect".


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## michika (Apr 20, 2009)

Tipping - I'm an over generous tipper, like usually in the 30+% range. It bothers me financially because I always spend a lot on meals, but I'm ok with it because I have a lot of friends who work/ed in food services and know that the base pay isn't great.


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## Jungle (Feb 17, 2010)

After tracking every penny in the last year, I can't believe the money we spend on things like grooming, cleaning and office supplies. Might as well add transportation into that too.

/vent off.


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## Gandharva (Jul 14, 2010)

crazyjackcsa said:


> We all have them, whether we admit them or not is another thing.
> 
> What bad habits do you have?


I like to swallow pennies for good luck. 

Just kidding.


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## Racer (Feb 3, 2010)

For me, it's tipping, as well as random gifts for friends, family, strangers.

It's a thrill and it's irrational - I think "because it's not for me, then it's not a bad habit". Ya, right.


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## dogcom (May 23, 2009)

I didn't want to start a new thread so I decided to put it here because it isn't a bad habit but an oversight.

I made a mistake this week after I bought a used 2009 Yaris to run around in the city. I went close to closing time away from Richmond where asians drive up the car prices to get a good deal. I managed to drive the price down almost 5 thousand dollars because I was going to walk out which was good. The problem is I temporarily financed there so I could drive it away and I would pay off the loan within a couple of weeks.

The problem was I was really tired after work and missed a 500 dollar broker fee for the loan which I picked up on right away when I got the papers in the mail. Anyway I did get a really good deal even with the 500 dollar payment but it still really bugged me that I missed that.


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## kcowan (Jul 1, 2010)

Dog
I guess I would rationalize it by asking whether the deal was still good at $4500 less? The broker fee might have helped sweeten the deal for them.


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## Jon_Snow (May 20, 2009)

Yes indeed, my wife and I have some bad spending habits. But for the most part they are kept in check by the simplicity of our plan. Basically, we force ourselves to put a minimum of 4k in our savings every month. Some months, when our purchases are less, it might end up being 4.5k... I think we've saved 5k a few times.

So, if the end of the month is nearing and we want to buy something that prevents us from saving our 4k target we don't buy it... it gets pushed to the next month. This strategy has worked great for us so far...


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## warp (Sep 4, 2010)

What makes me laugh is where I read that its now "in" to be frugal.


Ive been frugal ever since I can remember...although there is a difference between being frugal , and being cheap.

I have owned cars that I lusted after including several brand spanking new Corvettes, in my 20's and 30's.

I now drive an 18 year old car. ( although it is a Lexus)

Basically, there has to be a balance between spending and saving.
But you absolutelyou have to save first...and hopefully invest wisely to let the miracle of compounding to work for you.

These days I can buy just about any car etc, I want...but would rather pass any assets I have along to my son and my nephews/nieces.

It gives me infinitely more pleasure to be able to help them starting out in life, , and teach them what I have learned about money, than to blow it on myself, especially on some frivilous expense to impress people.

That being said I do pamper myself occasionally. In fact Im off to the caribbean for the weekend..just fro fun.

I have what I have, ( particulary financial security)...from some hard work, and from SAVING . not consuming unneccessarily.

Then again , that worked for me....others are different...and so I wish good luck to all.


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## plen (Nov 18, 2010)

warp said:


> I now drive an 18 year old car. ( although it is a Lexus)


Not to derail the thread but that's pretty funny, I own a 1992 ES 300 myself. Still working marvelous at 250k km


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## warp (Sep 4, 2010)

PLEN:

That is funny,,,because I also drive a 1992 ES 300!!

I had to trade in my 1988 Corvette when my son was born....and so needed more than 2 seats.

Its been a great car although lately as it ages, things are staring to go.
Fowever it still drives good....and I do like it.

Im thinking my next car will have to get better mpg though, with gas now over $1.10+ per litre, ( thanks to our tax happy govts)....

I can remember when I was going to university, driving a 1968 Dodge Dart,( I paid $950 for it, certified!), and paying about 50 cents a GALLON for gas!
Thats about 12 cents a litre!

See...you have to save and invest or the ravages of time and inflation will kill you.


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## dogcom (May 23, 2009)

Kcowan said "Dog
I guess I would rationalize it by asking whether the deal was still good at $4500 less? The broker fee might have helped sweeten the deal for them."

It was still a much better deal then I would have got if I waited for a nicer time of the year and earlier in the day. But still it did give them something back by me paying the brokerage fee.


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