7 Daily Money Traps and How to Overcome Them

7 Daily Money Traps and How to Overcome Them | IncomeProtection.SG
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Your alarm goes off at 6.30am to wake you up to get ready for work. From that moment, the world is out to make your wallet thinner and maximise your credit card limit. Think about it: How many times a day do you find yourself innocently handing over a few bucks without even thinking twice? At any given time of day, there’s a temptation ready to snag you, making you say, “I really didn’t need to spend money on that!”

But once the cash has changed hands or your credit card is charged, it’s too late to take it back. And it’s not just extraneous spending that can impact your finances. There are also ways in which you’re wasting money on a day-to-day basis that fly under your radar, chipping away at your budget, whether you realise it or not.

“People often perceive themselves as overspending at the end of the month, but you’ve actually been overspending the whole month,” says Matt Wallaert, a behavioural psychologist who specialises in judgment and decision-making. “We’re highly illogical when it comes to purchasing behaviour, and the first step [to fixing that] is recognising we’re irrational.”

To help you nip some of these irrational (and often pervasive) bad money decisions in the bud, we’ve mapped out the most common overspending traps that tend to trip up people throughout the course of the day — and then offered tips for subverting them.

So what are you waiting for? The clock is ticking!

Morning Money Traps

7 Daily Money Traps and How to Overcome Them | IncomeProtection.SG

Cover Photo Credit: FreeDigitalPhotos.NET by bplanet

7 Daily Money Traps and How to Overcome Them | IncomeProtection.SG

Photo Credit: FreeDigitalPhotos.NET by Gualberto107

6.30am – The “Late For Work” trap: You press the snooze button on your iPhone. Once, twice, thrice. The first rays of sunrise hits your eyes. Oh no, you’re late for work! Looking at your phone, you’ve overslept for 30 minutes and you need to be in office before 8am! You silently pray that your boss will be late as well. Comes the mad rush to shower and put on your office attire the fastest you can.

Good job, you took only 15 minutes to prepare! But you know you won’t reach on time if you take the MRT. You frantically fire up all the cab booking apps; GrabTaxi, EasyTaxi, Uber, Hailo. Aha! There’s an available taxi and your booking is confirmed. Once it arrives, you tell the taxi uncle to speed and take the fastest route, which means going through CTE with 3 ERP gantries (Bradell, PIE, Havelock).

You end up with a $21.50 cab fare due to the peak hour surcharge (25%) plus booking fee ($3.30). Even if you wake up late only once a week, it adds up to $86 ($21.50 x 4) a month. The same amount of $86 in your EZ-Link card can last you almost the whole month for your daily commute on public transport!

How to subvert it: To put it simply, wake up on time and be prepared early for work!

  1. Take public transport instead of cabbing.
  2. Make sure you disable the snooze function when setting the alarm on your phone. The best way is to set a few back to back alarms on your different electronic devices and place it in different parts of your room so you’ll be frustrated enough to actually wake up and get out of bed to turn them off!Also make sure the night before you have prepared your clothes and the things you need to bring to the office, so you can just grab and go instead of wasting time doing all that in the morning itself.

7 Daily Money Traps and How to Overcome Them | IncomeProtection.SG

Photo Credit: FreeDigitalPhotos.NET by vudhikrai

9.30am – The caffeine trap: You’re beginning to feel the effects of staying up late the night before. Or you’re the kind who needs caffeine to kickstart the day before any work can be done. You head down to the cafe downstairs to get your caffeine fix and grab a cappuccino. If you’re like the average Singaporean, you’re spending more than $30 a week on your daily caffeine fix, which adds up to more than $1500 per year.

How to subvert it:  There’s no way you can do cold turkey, so it’s best to find a job that has a well stocked Nespresso machine in the office pantry. Or pester your boss to get one in order to increase staff productivity. You can also downgrade from cappuccino to kopi si, spending only $1.20 instead of $4.00 daily. It will save you $1022 yearly! The Social Media Trap | 7 Daily Money Traps and How to Overcome Them | IncomeProtection.SGCover Photo Credit: FreeDigitalPhotos.NET by khunaspix

11.30am – The Social Media trap:  As you’re scrolling through your Instagram feed during your morning break, you get a text from Singtel alerting you that you’re about to go over your data bundle for the month, and you’re going to be charged extra for exceeding the limit. This happens almost every month, even though you always promise yourself that you’re going to use your phone less.

How to subvert it: Since deleting Facebook or Instagram will cut you from the world, you can always log on to your company’s WiFi network while in the office. Same with when you’re at home, you can always set your phone to connect to your home WiFi automatically.

If you’re still on the old 3G plan that has 12GB data, don’t upgrade it. It’s still fast enough to scroll through your social network and surfing the net. If you’ve already upgraded to 4G with a minuscule 2GB data and find yourself over the data limit frequently, it’s still cheaper to add on another data plan than to keep paying for excess charges every month.

Afternoon Money Traps

The Afternoon Spending Trap

 Photo Credit: FreeDigitalPhotos.NET by voraorn

Before you know it, it’s already mid-day. Your pocket starts to feel burnt, but you have not even realised it yet. It all begins during lunch hour…

  The Makan Trap 7 Daily Money Traps and How to Overcome Them | IncomeProtection.SG

Photo Credit: Amirul Azam from Blissful Studios SG

12.30pm – The Makan* trap:  You follow your colleagues for lunch and they’re the ones who always dictate where the group eats lunch, usually at a restaurant to escape from the scorching midday heat. You’re paying not only for the food, but also for the service and comfort, with an additional 7% GST and 10% service charge premium. *Makan – means ‘eat’ in Malay Language.

How to subvert it:  Just have your lunch at the nearby hawker centre or coffeeshop! The food tastes just as good or even better than some restaurants, at much cheaper prices. If you can’t bear the heat, just dabao and eat your lunch in the comfort of your office pantry.

The best is to prepare a lunchbox from home, which is healthier and more nutritious. Of course, you can still join your colleagues at their restaurants perhaps only once a week for the sake of team bonding. At the end of the year, you can head to Europe for a holiday with your family while your colleagues can only afford to go Bintan. The Technology Trap

Photo Credit: FreeDigitalPhotos.NET by patrisyu

2.30pm – The Technology trap:  In a staff meeting, your colleague flashes his new iPhone 6. You didn’t care about upgrading before, but now that you’ve held it, you really want one. Turns out that reaction is actually science-driven: According to a study, once consumers handled a product, they were willing to pay more for it As soon as the meeting wraps, you log into your mobile account and check to see if you’re eligible for a phone upgrade, but you still have a few months to go. Even so, you really loved how that phone felt in your hands…

How to subvert it: Pop out of the office for 15 minutes to clear your head and calm “the wanting mind.” It’s the sense of wanting something external, and as soon as you get it, it’s replaced by another desire. The recommendation is to meditate in order to pacify that instant-gratification impulse. Another good tact to try: “gratitude practice,” which is the act of writing down three simple things you’re grateful for in your life. By the time you get back inside, you’ll be thinking more about sharing a home-cooked meal with your family, rather than how much you think you need a new gadget.

Evening Money Traps

The Evening Spending Trap

Photo Credit: Amirul Azam from Blissful Studios SG

Time flies so fast that before you know it, you’re already packing your things and ready to leave the office. The moment you begin packing your things, thoughts start to fill your head. Then, you pick up your phone and start browsing away on the net, or checking your e-mails. Then, something unimaginable happens – you receive an update on a SALE The Flash Sale Trap

Design: Huda Hamid from Noruyo Creations

6.30pm – The FLASH SALE trap:  That FLASH SALE! post on your Facebook newsfeed catches your eye while you’re taking the MRT home. The offer ends in 1 hour, so you want to take full advantage of it and click, click, click. Before you know it, $150 have been debited from your PayPal account.

How to subvert it:  Turns out social media creates a strong spending temptation: Online shopping site Shopify.com says it gets more than two-thirds of its social-media traffic from Facebook, while Instagram drives its second-highest order price. Take the amount that you would have spent on that sale and transfer it to a savings account for a big goal you’ve been eyeing instead. “You can reward yourself for not doing some things, so you have impulse saves instead of impulse spends.” The Takeout Trap

Photo Credit: FreeDigitalPhotos.NET by stockimages

8.30pm – The Takeout trap:  Exhausted from your busy day, you pull out your laptop to order takeout — FoodPanda.sg has been your personal chef as of late. It’s just this one time, you say… almost every day. You don’t realise it, but you’re probably spending in the neighbourhood of $900 a year on delivered food.

How to subvert it:  Take a look at your order history, and add up your receipts for the week. Extrapolate that out to a month, and now you can see what food deliveries has really been costing you. So heat up that leftover pasta and start plotting out a grocery list that will be conducive to easy weekday dinners. That type of preplanning will save you time and energy in the long run because you can cook big batches over the weekend that you can easily reheat throughout the week. End of Day Regret

Photo Credit: FreeDigitalPhotos.NET by stockimages

This article was originally published in the American context on Learnvest.com. It has been edited for the Singapore context and audience.

Cover Photo Credit: FreeDigitalPhotos.NET by bplanet

4 Steps To Reduce Consumer Debts

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