so grab some popcorn and a pen and paper one paying for unused services one of the wonderful aspects of technological advancements is that we now have access to enough services to keep us occupied and entertained indefinitely yet managing all of these services can be costly at times and it’s possible that the price will be higher than you think in fact according to a 2018 report uk people waste 553 million pounds every month on services they don’t use or may even forget about with 40 percent of consumers continuing to pay for services they don’t use according to another survey 72 percent of respondents admit to paying for a subscription they rarely use for three months or more implying that the typical person spends more than 250 pounds per year on services they don’t use gym memberships were at the top of the list for the most under-utilized subscriptions with 50 of the 2213 persons pulled confessing to only going once or twice a year tv and music streaming services as well as hobby and magazine or newspaper subscriptions were among the most underutilized offerings some 29 percent of respondents claim they forgot they were paying for the service and a similar percentage say they continue to pay for something they don’t use because they might need it in the future another 28 of those polled said cancelling a subscription was too difficult so they didn’t bother what’s worse many customers continued to pay for these unneeded services even as their monthly expenses increased one in every four consumers keeps paying for a subscription despite discovering the price has gone up and 46 failed to cancel after a free trial period four percent of people have inadvertently continued to pay for an ex partner’s membership obviously the statistics on squandered subscription money are dismal but the question we must address is why does this happen the basic answer is that many people do not conduct regular financial audits they could have calculated how much money they were wasting on unused subscriptions every month if they had studied their monthly credit card statements and made the appropriate modifications to save rather than waste that money if they had reviewed their monthly credit card statements so if you think you’re paying for services you don’t use very often take a look at your spending at the end of the month and see how much money you could be saving 2.
not investing it’s often the acts we don’t do that cost us the most money and this is especially true in the case of investing taking advantage of the stock market strength has shown to be a terrific way to grow your money for over a century but millions of americans still fail to invest in fact as of april 2019 45 percent of americans said they were not invested in any kind of equity including individual stocks mutual funds and 401k or ira accounts it’s understandable that some people might be apprehensive to invest with the 2000 bust in the 2008 recession we’ve seen two significant market crashes in the last decades with many individuals losing their life savings and their houses nonetheless consistent investing has been shown to be successful in growing wealth and every day you do not invest is a day you are losing money to be honest there is no greater anecdote to exemplify this point than steve and jeff’s in the story jeff started investing when he was 25 years old he invested 10 000 a year for 10 years before retiring at the age of 35. with just 10 years of contributions jeff had amassed almost 1 million dollars with his initial 100 000 sitting in the market earning the historical 7 return steve only began investing in his mid-30s and because time was not on his side as much as it was for jeff he had to invest eleven thousand dollars per year from the age of 35 to 65 in order to have the same lump sum at the end as jeff to put it another way steve had to spend an extra 230 000 throughout the course of his investment career to get the same place as jeff the point is every day that you put off investing you’re basically losing two hundred and thirty thousand dollars three ignoring opportunity cost life is one big game of decision making whether you recognize it or not we make decisions about what to dress who we spend our time with which schools we attend and how we spend our money all of these choices have an opportunity cost attached to them when attempting to reduce the amount of money you lose every day you must consider opportunity cost which is described as the loss of potential benefit from other choices when one alternative is chosen the cost of going to college versus going straight into the workforce after high school is an example of opportunity cost that will connect with many people the most common expenditures associated with attending college or tuition books and housing however this does not include all the costs associated with this decision one significant cost that many people overlook is
the income lost as a result of seeking this degree rather than working let’s say you could find a job paying forty thousand dollars a year right out of high school if you went to college for four years and did not obtain any raises you would lose a hundred and sixty thousand dollars in salary not to mention the fact that you probably paid thirty five thousand dollars per year in tuition books and housing making the true cost of this decision three hundred thousand dollars rather than the one hundred and forty thousand dollars you’ll be handing over when evaluating how you spend your time the same opportunity cost notion can be applied what’s the cost of spending four hours a night viewing netflix for example if you add another source of income you might have to forego some of it which is then added to the cost of your tv watching decision most people will say that they have no other way of earning money than their 9 to 5 work thus their daily downtime is free but i believe that everyone has the ability to master a skill that will help them earn more money and drastically improve their financial situation 4. not paying strategically there’s no denying that spending money results in a loss but some people make matters worse by paying incorrectly you might be wondering what he means when he says paid incorrectly as you may be aware there are a variety of ways to pay for products you can pay with cash credit or debit which has been increasingly popular in recent years two of these three payment methods on the other hand will cause you to lose money every day while the third will allow you to gain money while also providing you with several benefits while cash and debit have their uses particularly when it comes to monetary control paying with credit is the only method to alleviate the strain of making purchases credit card incentives support this and these rewards can be highly lucrative unfortunately credit cards like everything else in life have downsides and they may be costly if you aren’t attentive to begin if you pay an annual fee for a premium credit card make sure you’re getting more value for your money than your spending second if you can’t make the payments and are charged interest your credit card will transition from a money-making instrument to a money-
sucking component of your life as a result if you want to avoid losing money you should begin paying more strategically 5. working below your true rate working at an undervalued rate is another way you’re losing money every day let’s face it the majority of people work a 9 to 5 job to make money and unfortunately a big portion of that group is paid less than they deserve for example many college graduates end up working in retail or grocery stores because the employment market is either too competitive or there’s no need for the skills they learned in high school others on the other hand keep decent positions and produce excellent results while still being underpaid there are two primary causes for this the first is that they work for a profit driven firm and the company’s primary goal is to keep expenses down in order to increase profits because they want to cut costs as much as possible they’ll aim to pay you as little as possible many employees on the other hand are too afraid to ask for a raise and instead accept whatever meager pay they’re offered rather than presenting a case for a permanent boost both situations will force you to labor for less than you deserve ultimately leading to leaving money on the table 6. losing money at work if you know anything about business you know that money is always exchanged for more money if you’re saving or making money for the company you deserve a raise deliver peak performance for at least 30 days prior to asking for a promotion ideally go to your manager at the end of a successful project and always back up your case with facts highlight the statistics whether you brought in three clients or work twelve hour days although most raises are between two percent and three percent you can increase your compensation by as much as 10 by changing positions or divisions the fix is pretty easy yes the current economic situation makes you feel fortunate to have a job but it doesn’t imply you should labor like a mouse 7. avoiding
negotiation negotiation is another money-sucking factor that may not have been high on your list on this side of the world many market vendors rarely give true prices for their wares most of the time you’re expected to haggle and lower the rates even further this guideline of negotiations holds true in the professional sector as well when you apply for a new job you should anticipate negotiating your compensation rather than accepting the first offer according to a harvard business school study women are more inclined to accept the first offer made to them resulting in a loss of money and professional advancement opportunities it’s past time for a paradigm shift how do you fix this well it’s pretty simple when it comes to saving money weighing different possibilities and knowing what rates other merchants are giving will go a long way knowing what other employees make before starting a new job is also important this is also true of online retailers when shopping for a new phone scout for a few online and physical places to compare prices and avoid getting overcharged always keep in mind that refusing to negotiate has a cost eight thinking budgets are evil the vast majority of us regard them as a constraint we can’t say we blame you they’re not exactly entertaining you’ll feel better and more focused once you’ve identified the empty calories in your budget saving for the long run is nearly impossible if you don’t know what you spend each month for three months keep track of every single expense from parking meters to rent only over a 90-day period can spending habits be observed it’s akin to a litmus test for good or poor habits once you’ve identified the money sucking holes make the necessary adjustments the ultimate fix to your little or not so little budgeting problem change to a more positive mindset think of budgets as the money version of a healthy diet well thank you guys so much for watching if you enjoyed the video give it a thumbs up and subscribe if you’re new with that said have a good one and i’ll see you all in the next one