Some expenses seem small at the moment, but over time drain an astonishing sum of money from your future funds. Stop or cut back, and the results can be dramatic by the time you retire.
Some Americans enjoy sipping on a $6 designer coffee in the morning. Others hate the planning, shopping and cooking associated with eating at home so they opt to dine out instead. And still others like to deal with life’s everyday stressors by lighting up a cigarette for a quick nicotine fix.
Sound familiar? Those are some of life’s guilty pleasures.
Am I going to tell you that you should stop those habits? Of course not. But if you keep reading, you may decide to stop — or at least cut back– on your own.
It’s no secret that eating out, getting your morning caffeine fix at a coffee shop and smoking your way through a pack of cigarettes a day are expensive habits. But those guilty pleasures can cost you even more later in life if they prevent you from saving for retirement.
It can be difficult — though not impossible — to cut back some on life’s guilty pleasures. But once you see how much money you’re losing in potential retirement savings by continuing with these money-sucking habits, you may be convinced to cut back or give it up for good.
CNN Money says these three habits are draining your wallet and could be to blame for your lack of savings:
- Daily coffee purchases: Do you make daily trips to Starbucks or another coffee shop for your morning java fix? You might start brewing your coffee at home once you hear this: If you cut back to once a week buying your favorite coffee drink, and put the rest of the money you typically spend on coffee each week into a savings account, you could end up $79,085 ahead once you retire, according to CNN Money.
- Dining out: Eating out is fun, convenient and easy, but if you’re eating out too often, it can get really spendy. The average American blows $252 each month dining out, according to information from the Bureau of Labor Statistics. If you can eat at home just two more meals a month, CNN Money estimates you’ll save $63. Although that doesn’t seem like much now, if you’re in your 20s and you reduce the number of times you eat out each month by two meals, the payoff is huge. By CNN calculations, if you save that money — and it earns an interest rate of 7.8 percent each year — you should have an extra $207,598 in your account at retirement.
- Smoking: You’ve been told smoking cigarettes is bad for your physical health, but it’s also bad for your financial health. If you go through a pack of smokes a day, you’re spending roughly $176 a month on cigarettes. If you go cold turkey in your 20s, and save that cigarette money instead of letting it go up in smoke, you’ll have an extra $579,957 when you retire, CNN calculates. You read that correctly. That’s more than a half a million dollars you could save!
Check out “7 Reasons You Will Retire Poor.”
Do you have any of the expensive guilty pleasures listed above? Sound off below or on our Facebook page.