5 Spending Traps to avoid in 2012

Rounding out the first week of the new year I figured it was a good time to focus some attention on avoiding spending traps of 2011.  I’ve already talked about plugging a few money leaks and, a while ago, why I cancelled my daily deals, but Jean Chatzky recently posted about avoiding last year’s spending traps this year. 

Did any of these trap you in 2011?

• Daily Deal and Flash Sale Addiction (you know my take on daily deals).  How are you avoiding these?  Another thought would be to require any purchase to either be something you actually buy already (like literally a massage at a place where you already get monthly massages and using that massage to replace a regularly-scheduled massage) or to substitute (same but the replacement would be a massage at a new place for that month).
• The Exhaustive Hunt for the Sale.  I disagree with Chatzky a little bit on this.  I do think your time is money, but time you’re just sitting watching Two and a Half men isn’t time where you would normally make money.  So to require the equivalent of your hourly rate for any of that time you spend multitasking on coupon sites isn’t apples to apples.  But I do agree generally that you shouldn’t forget that time is money and gas, wear and tear on cars and other costs exist and should not be completely ignored.
• The Mood of the Day Prevailed.  I like her advice here.  If you’re invested wisely in index funds and don’t need the money for 5 years or more, ignore the crazy news.  It doesn’t matter as much.  Put your only $10,000 in a single stock – no matter what company – and you’ll be stressed out and make bad decisions.
• Big Bank Fees.  I’m not a fan of banks -  but not just because of the fees.  That being said, I bank with a big bank (at least for now).  Hypocrite, I know. 
• A Savings Shortfall.  Seriously just start saving OK?  Set for some small amount to come out of your paycheck every week or month.  Don’t know how much?  Try your age per week.  Then once you realize you can do that up it.  Add $5 per week until you start feeling it.  Don’t worry about where it goes – put it in a savings account even.  I don’t care.  Just start becoming a saver. 

Until recently, I had a bunch of money (percentage wise) in single stocks and it was crazy stressful.  I’ve since simplified into mostly mutual funds and ETFs and am definitely less stressed.  Also, the “exhaustive hunt” trap is relevant here.  I spent hours and hours trying to beat the market, which often resulted in outperforming by a percent to a few percent.  Because I’m not a millionaire the few percent was not a ton of cash.  It just wasn’t worth the time.

So that’s it? What do you think? How many of these do you struggle with?

Until next time, put your credit card down and slowly step away from the mall!

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