It’s much easier to spend money than it is to earn it. Many of us go through our day-to-day activities without tracking the money that we spend, without realizing that there’s a chance we may actually be wasting some of our hard earned cash.
We’re talking about spending money for the sake of spending it, and things that you buy but never end up using. Here are some of the things that people across the US and other countries tend to waste the most money on.
Streaming Service Subscriptions
With Netflix, Hulu, Disney Plus and a wide variety of other streaming services available, it’s no surprise that many of us spend hundreds or even thousands of dollars on them each year. Sports and entertainment subscriptions are the most popular options people purchase.
This also includes free trials to new streaming services that you use occasionally and then never cancel. When the free trial runs out, some of us keep paying for a subscription that we only use occasionally.
It’s important to make sure you get your money’s worth, and if you don’t find value in the subscription, cancel it ASAP. The monthly savings can stack up quickly if you have a lot of different services you’re signed up to.
Humans loves sales and discounts. You only need to look at Black Friday, which has been lengthened into a whole weekend or more by some retailers, to see just how
And waiting for a sale before making a big purchase that you need for the home isn’t a bad idea. It’s when you end up buying things that you don’t really need that it becomes an issue.
Shopping apps don’t help with this – the experience is designed to encourage you to buy more things, and before you know it, you’ve spent hundreds of dollars on new clothes that aren’t a necessity.
If you have extra money to spend, there’s nothing wrong with treating yourself to a new outfit. Just beware of the seemingly never-ending sales, as your cash can disappear before you know it.
If you’re offered an extended warranty on a new product, many of us leap at the chance, with the perception that this can save us money in the long term. And the truth is that it can for some people, but for most, they’ll never actually end up using the extended warranty that they pay for.
Paying an additional fee for peace of mind if your new car or new iPhone breaks is worth it for some people. However, you could be losing money if you pay for expensive warranties when you don’t necessarily need them.
Personal finance skills and financial literacy are at the heart of wasting money. The most common of these are overdraft fees on your checking account or savings account, which can be expensive. With an average overdraft fee of around $30, it’s easy to see how these charges can stack up over the course of a few years.
Bank fees are one of the most common ways that people lose money unnecessarily. In some cases, you may have no choice but to break into your overdraft to make ends meet.
So, don’t be too hard on yourself – but once you make it out of your overdraft, do everything you can to avoid going back into it, as it’s an easy way to lose your hard earned money.
Credit Card & Loan Interest Fees
It’s not only late fees on your bank account that you need to worry about, but also the interest rates you have across your credit cards too.
Credit card debt is common for most people, and if you can stick with 0% cards, then you can avoid paying interest on what you spend whilst improving your credit score.
It’s when you fall behind paying credit card balances that they can become extremely expensive. With an average interest rate of more than 20% a year, these credit card costs can add up very quickly. And the more money you have on your card, the more it will cost you.
Loan fees are another thing to consider, with monthly service fees being common. You can also consider ATM fees with your credit card too, as often they charge a small fee to withdraw money.
Though it doesn’t seem like much, coffee costs can add up across the course of a year. Even $5 a day can eventually be more than $1200 annually if you pick one up every working day of the week.
Making your own coffee is an easy way to save money without having to make a whole lot of effort. Though for some people, heading to the coffee shop each day is a small pleasure worth paying for.
Another common thing that people end up wasting money on is food, specifically when they go grocery shopping. If you’ve ever been to the store and ended up buying things that never get eaten and get left at the back of the cupboard, you’ll know what I’m talking about.
To combat this, it can be a good idea to make a food shopping list before you leave the house. This will ensure that you buy things that you actually need, and not what’s discounted or reduced in price.
There’s nothing wrong with a gym membership that you actually use and get value out of. However, many people waste money on a membership that they only use very occasionally – in fact, it’s one of the most common things people waste money on.
A good alternative to paying annual gym memberships is to simply invest one time into some home gym equipment. Pick up a yoga mat, a kettlebell and a few other bits, and make your own exercise routine at home. Jog around your local area 3 times a week.
Opting to do this instead of paying for your gym membership could help you save money over the long term.
The vast majority of people are never going to win big in their lifetimes, yet still millions of us choose to play the lottery on a regular basis. Many of us pick them up additionally when we stop at a gas station without even thinking about it.
This obviously isn’t a reliable way to build wealth, and depending on your financial situation, the little money you have can often be better used elsewhere.
Living beyond your means
This can involve a mixture of all the previously mentioned things that people waste money on, and living beyond your means is something that many people struggle with.
It essentially refers to those that need to “one-up” someone else in their life – this could be the next door neighbor, or a member of your circle of friends.
The psychological competition can start from internal feelings of inferiority. Your neighbor buys a BMW, so you need to buy a Mercedes. They buy a small hot tub for the garden, so you go and buy a bigger Jacuzzi to outdo them.
This is one of the most common ways that people waste money and find themselves in credit card debt. Often, the Jacuzzi ends up going unused for the vast majority of the year, and a larger Volvo would have been a much better investment for your family.
In the best case scenario, this can lead to wasteful spending. And in the worst case scenario, it can lead people to become obsessed with material positions and always needing to have more than their neighbor.
Not all of the money you spend is wasted money. You may choose to pick up a coffee every day as a treat for yourself, and if you truly enjoy it, there’s nothing wrong with that.
But if you want to take your financial future seriously, it’s a good idea to keep track of your spending habits. The important thing to do is try and cut costs where you aren’t seeing a massive difference, and when it doesn’t have an impact on the quality of your life.
Once you’ve spent money, there’s no way for you to get it back. So, make sure that you always get your money’s worth, and try to avoid throwing money away on things that don’t really matter.