A few dollars spent for this and a few more for that. These purchases add up fast and before you know it, you’re wasting money.
Everyone has holes in their budget. There are places where you overspend and could easily reduce without even noticing or feeling deprived.
Some money-saving tips are no-brainers. You can do things like fly coach instead of first-class, eat at home more often than you do out, and be frugal with money. But, there are plenty of other ways to save that aren’t always as clear.
Most people are wasting money in common, yet often overlooked ways. They’re overspending and buying things out of habit that often provides little value.
But, when you stop wasting money, your savings ratio will grow. You’ll have more money to invest which allows you to reach your financial goals faster!
Below are 10 places where you’re wasting money and what you can do to stop.
Money Waster #1 – Groceries
According to Rubicon, the average American family of four throws out $1,500 in food per year! Fruits, vegetables, and grains are the main items that get put in the garbage because they have short expiration dates and often spoil before they’re consumed.
Impulsive buys make many people overspend on groceries, too. They go to the store and get tempted by the new products, sales, and their stomachs. This causes them to purchase more than they need and busts their food budget!
How To Stop Wasting Money on Groceries
Food waste often stems from a lack of planning. Instead, look ahead at the meals you want to eat and make a list of the items you’ll need. Then, go to the store on a full stomach and have the financial discipline to buy only the items on your list!
Also, consider where you go to buy your food. Many brand-name grocery stores are expensive. But, often their lesser-known competitors have the same fresh produce for less. Try shopping at a discount grocery store like Aldi or having a no-spend weekend to eat the food you already have!
Many people find that it’s easier to avoid temptation at the grocery store altogether. They use delivery services and only order the items they need which saves them both time and money!
Money Waster #2 – Bottled Water
Did you know that the average cost of bottled water is 2,000% more expensive than tap? That’s huge and as a percentage, it’s one of the biggest ways you’re wasting money!
Not to mention, plastic water bottles are terrible for the environment. An article on HealthyHumanLife.com estimates that over 80% of them end up in landfills and can take up to 1,000 years to decompose!
How To Stop Wasting Money On Bottled Water
Most people buy bottled water out of convenience or because they believe it has health benefits. But according to a study on WebMD, the health benefits associated with bottled water are non-existent!
Stop wasting money on bottled water. Instead, be a conscious consumer and use a water filter, like one from Brita while you’re at home. When you go out, pack a reusable bottle. It will save you money and benefit the Earth for generations to come!
Money Waster #3 – Lottery Tickets
The odds of hitting a jackpot are about 1 in 290 million. While the odds of getting struck by lightning are much better, roughly 1 in 115,000. I’ll let you do the math!
The same goes for gambling. Sure, you may win and make some money here and there. But, over the long term, the odds are against you and in the end the house always wins! How do you think they’re able to spend billions of dollars building new casinos?
How To Stop Wasting Money On Lottery Tickets
The probability that you’ll win a large amount of money is almost zero. Even if you do happen to win, you’ll be likely keep buying and playing until you lose.
Instead, why not do something that will guarantee you become rich and wealthy? Believe it or not, it’s as simple as living below your means, investing in yourself, and following a plan that ensures you achieve financial success!
Money Waster #4 – Increasing Insurance Premiums
Does your insurance bill ever go down? Mine neither.
The insurance industry is notorious for bill creep. They raise your premiums at each renewal regardless of whether you’ve filed a claim or not. And if you’ve automated your finances, you may not even know it’s happening!
How To Stop Wasting Money On Insurance
The first step is to understand your coverage. Review your current policy and everything that’s included, and then start shopping around. Compare quotes from independent agents using sites like Insurance.com or InsuranceQuotes.com Consider if it’s worth changing your deductibles and coverages for additional savings, too.
Money Waster #5 – Convenience Purchases
As most people run errands and drive around town, they tend to get hungry or thirsty if they’re out longer than they expected. As a result, they stop at a store and buy some snacks to satisfy their cravings.
Convenience goods aren’t one-time big ticket items. Most are less than $10. But, as the habit of running into the store for a few items forms, it can quickly turn into an expense that gets out of control!
How To Stop Wasting Money On Convenience Goods
Take something to eat or drink with you before you leave your home or keep snacks in your vehicle. As soon as the hunger pangs start, now, all you’ll have to do is reach over into the glove compartment and pull out something to satisfy your craving. Not only will you save, but you’ll be more likely to bring something healthy, too!
Money Waster #6 – Cable
Do you spend several hundred dollars per month on cable? Most people that do, have tons of channels, yet they watch only a small fraction of them.
How To Stop Wasting Money On Cable
Cut the cord and stop paying for things you don’t use. Instead, switch to an internet-only package and get an HD antenna. This is a small investment that will pick up local channels for FREE! Pair it with a streaming service or two and you’ll be on your way to full entertainment and serious savings!
Live sports are the main reason most people won’t ditch cable. But, there are many ways you can still watch them. Consider signing up for ESPN+, Paramount Plus, or Peacock TV depending on which sports are most important to you. Then, cancel your subscription once the season’s over so that you aren’t wasting money!
Money Waster #7 – Bank Fees
According to NerdWallet, the average American spends almost $1,000 in bank fees per decade. This figure includes charges for insufficient funds, ATM, and account maintenance fees. You know, those ridiculous charges for using your money too often or not often enough!
How To Stop Wasting Money On Bank Fees
Today, many banks offer free accounts. Two of my favorites are Capital One’s 360 Checking Account which has no minimums and no fees. And Charles Schwab who will reimburse your ATM fees worldwide!
Financial automation can help you avoid paying needless bank fees, too. Set it up so that your bills and credit cards get paid in full and on time. Not only will you stop wasting money on bank charges, but you’ll eliminate the power of compounding on these debts, too!
Money Waster #8 – Investment Fees
As an investor, you pay commissions, administration costs, and management fees. These expenses add up and over time can be tens of thousands of dollars, especially as you create wealth.
For example, the average investor pays their financial advisor between 1 and 2% of their portfolio’s balance to manage their money. So, if you have a $500,000 portfolio, you’d pay between $5,000 and $10,000 in fees per year. These are fees that you pay regardless of their performance and doesn’t account for the hidden costs of investing, either!
How To Stop Wasting Money On Investment Fees
Educate yourself on the investments you own and the fees you’re paying. Then, consider switching to a low or no-cost provider, like Fidelity or Vanguard. If you like the idea of having a Robo-advisor try using M1 Finance or Wealthfront. All these options are cost-effective ways for the DIY investor to grow their nest egg without wasting money on fees!
If you do think you need professional investment advice, try using the X Y Planning Network. They’ll connect you with a fiduciary advisor that will act in your best interest and not charge you an arm and a leg!
Money Waster #9 – Extended Warranties
The cost of an extended warranty can be as high as 30% of the item you’re buying. Never mind that the sales associate will make about half that amount in commissions. No wonder they’re always pressuring you to buy!
Most extended warranties are impulse buys. They’re offered right as you’re getting ready to check out. They claim that for a few extra dollars your item will be covered for years to come. But, they don’t mention the fine print and exclusions which won’t cover the most common problems!
How To Stop Wasting Money On Extended Warranties
Just say no and don’t buy them. In most instances, the manufacturer has a guarantee which covers your purchase.
If you buy the item using a credit card, you may already have additional coverage, too. Many cards offer extended warranties for free. Look at this free guide on NerdWallet to see what your card covers.
Also, if you have concerns about a product breaking, then you may want to reconsider buying it in the first place. You should do additional research, shop the competition, or start a reserve fund for your future repair bills!
Money Waster #10 – Interest
Yes, I’m back on my soapbox because most Americans have consumer debt. They’re making payments on purchases from months and sometimes years ago! This is interest that continues to build and accrue for as long as they have an outstanding balance.
How To Stop Wasting Money On Interest
The easiest way is to never go into debt in the first place! Pay your credit card bills in full each month, learn to save for large purchases, and then pay for them in cash!
If you’re wasting money on interest, think about how you can get debt free. Consider aggressively paying down your loans, refinancing, or completing a 0% Balance Transfer. All these options can help you stop wasting money on interest.
Imagine you took a little bit of the advice from above. You went through your monthly expenses and realized you’re wasting a few hundred dollars each month. If you stopped, plugged the hole, and invested this money instead, you’d be able to reach financial freedom faster!
What’s the biggest expense you’re wasting money on? Comment below.
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