Personal Finance

7 Habits You Didn’t Know Were Derailing Your Finances Every Month

Expertise: Personal Finance, Personal Development, Real Estate Investing Basics, Landlording & Rental Properties
58 Articles Written
Friends watching tv and eating popcorn, rear view.

I can already feel the hate mail coming my way. The “you have to live” talks. The “you’re missing out on the best times of your life” talks.

That’s OK, though. I like those talks. In fact, I love those talks. Each time someone tells me, “You have to live,” it reassures me that I am living like no one else now, such that I can live and give like no one else later.

A couple of years ago, my buddy Scott Trench posted an article about a few seemingly harmless habits that many Americans have. Because I 100 percent agree with Scott—and because I’m a numbers guy—I have taken many of his harmless habits and done my best to attribute a dollar value to show the impact of each of these activities. Think of the dollar values below as a unit of comparison; the actual amount may be more or less for you.

Before we get started, let me preface with a disclaimer that I am no angel. I take part in almost all of these activities and don’t expect you to cut them out of your life either. However, I am keenly aware of the impact of these activities and practice them significantly less than the average American.

Now, it’s your turn to scale back.

This article is typically for younger people in their 20s to mid-30s who are seeking early financial freedom. If you have already joined the "financial freedom club," do whatever you like. You're there! Enjoy it!

For the others, I suggest you keep reading.

1. Watching Television (Netflix, Hulu, Cable): $2,709/mo

Only $8.99 for an unlimited catalog of TV shows, movies, and documentaries. That’s cheap, right? Wrong!

This New York Times article suggests that on average, Americans watch five hours of television every day. To me (and likely most of the readers of this blog), that sounds crazy. Let’s assume that we are better than the typical American and assume that the average reader of this blog consumes three hours of TV each day. That’s 90 hours per month, or $2,700 worth of your time, spent watching TV.

The total there is $2,709. This does not even include the cost of cable, a nice TV setup, and any other miscellaneous items such as snack food, beverages, or whatever other ancillary expenses are associated with watching TV.

Watching TV/movies is something I have totally cut out of my life. The only time I will watch TV or a movie is to spend time with friends or family.

2. Drinking & Bars: $2,220/mo

After looking deeply at the effects of drinking and nightlife, it truly does shock me as to how many people do it consistently—every Friday and Saturday night. I used to be one of these people. In fact, for about six years, I did not miss an opportunity to party with my friends on Friday and Saturday night. Thankfully, I have smartened up.

Let’s have a look at the impact, assuming you go out 2X per week. Over the course of the month, you will spend at least $300 on alcohol, Ubers, “drunchy” food, etc. Not to mention the hours wasted. Between the pre-game (pre-drink for the folks outside the U.S.), the game, and the hangover, let’s say a total of eight hours is wasted per night out. That’s a total of 64 hours per month.

If your time is worth $30 per hour (~$65K per year salary), that’s $1,920 per month! Plus the $300 in direct costs and that’s $2,220 worth of money and time down the drain. This does not even include the health issues and sicknesses to follow.

You keep drinking while the rest of us run circles around you.

3. Social Media: $1,800/mo

We all know that social media is a distraction. Still, the average person spends about two hours each day encapsulated in other people’s lives. That’s 60 hours per month—OR $1,800 worth of your time—each month dedicated to social media.

Get off your phones and start living your own life!

Related: 3 Productivity Books That Changed My Life

4. Listening to Music: $1,560/mo

According to a Nielsen study, the average American listens to 25 hours of music each week. Think about the time spent in the car, cleaning the house, cooking dinner, or doing menial tasks at work.

I am going to assume that many of us (including myself) listen to classical music for concentration purposes. I’ll cut this number in half to 13 hours per week, or 52 hours per month.

This is 52 hours each month that could be spent listening to podcasts, audiobooks, or having conversations with those around us. At $30 an hour, that’s $1,560 per month of time listening to music.

5. Driving a Car: $1,010/mo

When you have to go to the grocery store, a friend’s house, or work, what’s the first thing you do? Many of us jump in our cars and drive there. Think of it this way. Every single time you step on the gas, the brakes, or even turn the engine on, you are opening up a hole in your wallet that your hard-earned cash trickles out of.

Let's break it down further. A new car purchase is $25K. Financed with a six-year loan at 3 percent interest, this equals car payments of ~$350 per month. A new car is said to be worth less than half of its value after the first three years. So, $13K over 36 months is $360 per month in value lost.

Not to mention all of the added costs—gas, insurance, maintenance, etc. Let’s say that’s another $300 per month.

$350 car payment + $360 value lost + $300 in added cost = $1,010 per month

That does not even include the added stress levels brought to you by traffic and the health benefits provided by walking and/or riding a bike.

Stop driving and start riding!

Driving a modern car on the road.

6. Watching Sports & Fantasy Sports: ~$1,000/mo

While this closely aligns with watching television, I like to separate it out, because watching a sporting event is a different experience than watching TV. Typically, it is more of a social event.

Assuming you pay $0 extra to watch sports—you do not have a large HD television, you live in the same area as your favorite sports team, and you do not buy any extra food or drinks because of it—let’s quickly break it down.

Let’s say that the average amount of time spent watching sports is six hours per week. Obviously, this varies depending on the time of the year.

For example, in fall and winter months (September through March), you have the NFL (football) season and March Madness (college basketball), where the hours per week are higher than in the summer months where it is just the MLB (baseball). At six hours per week for four weeks, that is 24 hours per month or $720 per month watching sports.

With the explosion of fantasy sports, this gets even more costly. The average American pays $550 in fantasy sports dues over the course of the year. I presume that’s skewed by the real high rollers, so let’s say $150 per year. Hey, $150 per year won’t kill you.

The real killer here is time. A study shows that the average fantasy football player spends two hours per week or eight hours per month tinkering with their fantasy lineups. At $30 per hour, that’s $240 of time wasted per month on fantasy sports.

Adding these up, $720 watching + $240 of fantasy sports + any other form of dues, you are looking at close to $1,000 a month on sports. Again, this is before any miscellaneous costs.

7. Eating Out: $900/mo

We all do it. We all do it more than we should. Eating out is one of the biggest killers for those in pursuit of early financial freedom. Not only is it expensive, but it’s time consuming AND unhealthy.

Let’s say your average meal out is $20 compared to the $5 it would cost you to buy the groceries and cook your meal. That’s a $15 per meal difference.

According to a study by the Boston Consulting Group, Millennials go out to eat on average 3.4X per week. We’ll round that down to three times per week or 12 times per month. At $15 incremental charge, that’s $180 per month.

Each time you go out to eat is probably on average two hours of your time. This includes commuting to the venue, the restaurant experience, and the food coma we all fall into when we are done. That’s 24 hours per month, or $720 worth of your time.

$180 per month in additional food costs + $720 worth of time = $900 per month eating out

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See you at Safeway!

Related: How to Slash Your Food Bill in Half (AND Support Good Health)

Conclusion

Again, I am no angel, and I do not expect you to be either. With the exception to watching Netflix, I still do all of these activities. I go out with my friends. I listen to music and am frequently on social media. I still take three hours every Sunday to watch the Patriots.

However, after thinking about the impact of each of these activities, I have reduced the negative effects they have on my life.

For example, I go out, but don’t drink. I watch sports, but ONLY my team. I listen to music but have substituted half of the time with podcasts. I am an active user of Facebook, but I gray-scaled my phone so I naturally use it less.

The purpose of this article is NOT for me to tell you to stop doing these things. It is to make you aware of the financial impact each has. It is just to get you to scale back on some of these bad habits. Making small tweaks will allow you to retain similar happiness levels while being on the fast-track to financial freedom.

Cheers!

Do you agree that the above habits are counterproductive? Would you add anything to this list?

Let’s talk below.

Craig Curelop, aka thefiguy, is the author of The House Hacking Strategy and a driven pursuer of financial independence. Sta...
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    Account Closed from Clovis, California
    Replied over 2 years ago
    Thanks for this eye-opener. Unconsciously, even though I limit my shopping spree, the things you’ve listed here became part of my monthly expenses. They’ve been considered a commodity, which after reading your blog, should not have to. Good read!
    Craig Curelop Real Estate Agent from Denver, CO
    Replied about 2 years ago
    Thanks, Erika! I’m glad this article could help
    Bill Gerst
    Replied over 2 years ago
    You must be a lot of fun! lol
    Craig Curelop Real Estate Agent from Denver, CO
    Replied about 2 years ago
    Thanks! I like to think I am pretty fun too!
    Bob Langworthy Accountant from Brunswick, ME
    Replied about 2 years ago
    Great article! Thank you for not including coffee on your list. I don’t need that kind of negativity in my life!
    Max Householder Rental Property Investor from Saint Louis, MO
    Replied almost 2 years ago
    Time spent on leisure is only a “cost” if you’re giving up doing something of value instead. If you get paid $30/hour by an employer to work 40 hours per week, your time outside of work isn’t also worth $30/hour because nobody is offering to pay you during that time. It’s not like your 8 hours of sleep every night is costing you $30/hour. If you wanted to factor a $60,000 annual salary to include leisure time, it’d be more like $7/hour (24 hours x 365 days = 8760 hours, 60,000/8760 = $6.85 per hour annually). Now sure, if you turn off the Netflix and write 3 yellow letters every night and you know those 90 or so letters every month should net you one $3,600 wholesale deal, then choosing to spend those hours on Netflix instead could be considered a $30/hour cost. It does a good job making your point, but aside from the fixed costs of the beer, Ubers, Netflix subscription, etc. there is no 4-figure hourly charge to leisure each month, otherwise your annual”worth” would be like $250k+
    Christopher Connell
    Replied almost 2 years ago
    I like the general idea of this article but as many others have stated in the comment section, The monetary value on time isn’t realistic. I get the time is money deal but I’m not earning 30 an hour when I’m not watching tv or hanging with friends, so I’m definitely not losing money when I am doing those activities besides actual money being spent.
    Mario Dimacias Flipper from Napa, CA
    Replied almost 2 years ago
    Great Stuff, man! Thank you. I call it the new “JOMO! 🙂
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied about 2 months ago
    Wow, this article is quite a gut check!
    A Schwartz
    Replied about 1 month ago
    1. Using public transportation is not an option for most people who live in suburban or rural areas. I live 4 miles from a bus stop, and that bus does not go anywhere I want to go! 2. In addition, this article is fun reducing. You can live like a monk, but then is it worth it?
    Mary White Rental Property Investor from Klamath Falls, OR
    Replied about 1 month ago
    Listening to music clears my head and helps me perform and focus better. I started doing it in high school and college track. I would argue that on this one there is no cost and a significant gain in terms of stress reduction and achievement. Sometimes a clear head is more important than listening to podcast.
    Ruth P. from California
    Replied about 1 month ago
    I agree with Mary. I read in a book that to listen to music was a waste of time and I couldn't believe it! You can easily multi-task while listening to music without lyrics and it puts you in a good mood without distracting you from your work. You could even argue that it gets you in the mood to be productive.
    Ruth P. from California
    Replied about 1 month ago
    P.S. I agree with the article for the most part and I appreciate its effort to help!
    Brett S. Investor from Plainwell, Michigan
    Replied about 1 month ago
    The flaw of this, and many similar studies, is that you assume you have a way to earn $30/hour if you don't do those things instead. I don't know about you, but I'm not an hourly employee so it doesn't work. If I was an hourly employee, you're basically asking people to choose to work every hour they aren't sleeping. Many people are able to have this choice but choose not to, most likely for mental health and family reasons. All that being said, it's a good thought starter article.
    Jason Oberweis from Atlanta
    Replied about 1 month ago
    Good article, except for the music part. If someone is listening to classical music in order to concentrate on some other task, then listening to podcasts instead is not the same thing as you then can't concentrate on the task as well.
    Timothy Vis
    Replied about 1 month ago
    The only critical flaw I see here is in your car valuation, since counting both the payment cost and the decline in value additively is double counting. The money I would lose to the decrease in value is the same money I spend on the principal part of the payments. Put another way, if I spend 35k in payments for a car that goes in value from 30k to zero, I'm only out 35k, not 65k (excluding all of the other expenses).
    Timothy Smith Investor from Buffalo, NY
    Replied about 1 month ago
    Thanks Craig, excellent and thought-provoking. A good way to re-evaluate our own expenses and choices. My wife and I have been talking about how the last few weeks have actually SAVED us money by not taking the kids to the corner bakery on weekends and dropping $30 on toast and coffee, for example. We have slowed down our family life and not felt the pressure to constantly be on-the-go spending money on "enrichment activities", and have really enjoyed spending time in our yard or at local parks without feeling the need to hit the coffee shop first. That being said, everyone has to decide the value of these activities on their own. Listening to music is meditative and adds tremendous value for many people -- ESPECIALLY during this time. As a professional classical musician, your position on that certainly got my dander up! However, I understand that most of what you meant was probably geared towards mindless listening, such as just setting the car stereo to the local classic rock station and tuning out mentally. I have actually been listening to MORE music during this time, as it has given me clarity and enrichment. This benefits me being able to tackle current stressful problems, of which there are plenty!