Counterintuitive Money Habits that Will Pay Dividends in the Future

Mechanics get a pretty bad rap. Most customers assume they’re getting ripped off when a “basic service” sets them back over $250. But mechanics are highly-skilled workers and, for the most part, are simply doing what it takes to get your car running as well as possible.

Still, it’s difficult to part with such a large sum of cash every 6-12 months. Keeping up a regular servicing schedule with a mechanic you trust, however, is the best way to protect yourself from unexpected costs down the track. If your head gasket is on its way out or the timing belt is nearing its expiration date, your mechanic will likely pick it up during a routine service. Trust me, that’s far better than being skull dragged into the workshop after your car conks out on the side of the freeway.

When you’re looking to upgrade your phone, $60 per month might fit nicely into your budget. Unfortunately, you’ll end up paying a premium for the convenience of spreading your payments over 24 months. Many mobile providers offer an introductory price for the first few months, then hike up their fees once you’re locked in. 

Buying a phone on a contract also takes away a lot of the flexibility that comes with owning a device outright. You’re limited to the plans that particular provider has available, even if they don’t have the best service or offer the best value. In addition, if something happens to your phone – you lose it or go for a swim while it’s still in your pocket – you’re left paying for a phone you don’t even use anymore.

Often, when you take out a loan, car finance or begin accumulating credit card debt, you see the minimum repayment and think “sweet, I can afford that!” If you manage to score a great interest rate, making your regular repayments is enough. It’s when the interest rate creeps into the twenties and thirties, like with a credit card or payday loan, that’s when making only the minimum repayment can really sting in the long run.

For example, if you take out a high-interest loan of $10,000 at 23% p.a. (ouch), you’ll end up paying close to $7,000 in interest over a 5-year period. However, if you can throw an extra $100 at that debt each month, you’ll bring the interest down to just over $3500.*

If you find yourself with a few extra bucks, you might consider paying it off your debt before you're tempted to spend it on something frivolous. But be sure to check with your lender if there are any early repayment fees attached to your loan.

There’s a reason some things cost more. Quality comes at a price. So too does being an ethical shopper. Cheaper goods usually equal cheaper labour, and in the worst cases, unpaid, exploitative labour. Put your money where your morals are and embrace the slow fashion movement – buy less and buy better.

The benefits of going minimal with your wardrobe are manifold. A sturdy pair of boots might set you back a few hundred bucks at first, but if you do your research and choose the right pair, you’ll be kicking around in them for years to come. Otherwise, you’ll be replacing a cheaper pair every six months when the heel comes unstuck or the sole blows out.

Adopting a minimalist wardrobe – a personal uniform, if you will – is also said to free up the mind for more important decisions. The late Steve Jobs was famous for his signature black turtle neck, Dr Dre rocks his Air Force 1’s every day, and even Albert Einstein purchased multiple versions of the same grey suit because he didn’t want to waste brainpower choosing an outfit every morning. Knowing what looks good will also stop you from meandering through the shopping centre buying stuff you probably won’t wear anyway.

$12 for a jar of peanut butter sounds expensive, and buying a literal bucket of hummus (you know the one) sounds like overkill. But when it comes to grocery shopping, bigger is often better. It’s certainly better value, anyway. 

Next time you go food shopping, ignore the biggest number on the price tag. Look at the ‘per 100g’ number, especially when you’re comparing items with a long shelf life like rice and pasta. If you’re going to end up buying another bag of rice next week, save yourself some coin and boot space and grab the bigger one with a lower cost per weight.