In economic times like these, I think it’s fair to say we are all looking for ways to save money. With prices continuing to go up on most things, that can certainly be difficult. Today, I thought I would share with you a few different areas where you may be wasting your hard-earned money. I would guess we’re all guilty of at least one or two of these.
1. Unused memberships and subscriptions: In an attempt to actually lower how much we spend, media companies have convinced many Americans to replace their cable subscription with various streaming services like Netflix, Peacock, Disney+ and many others. But how much do you actually use them all? An easy way to lower you monthly expenses is to identify the one or two you use most and cancel the rest. The same applies to things like gym or pool memberships. If you’re like most Americans you’re probably not utilizing these membership as much as you thought you would and, by canceling them, your life probably won’t change much but your bank account might.
2. Credit card interest: One thing I am always amazed by is how willing people are to pay 20% interest on the things they buy. Often, I will speak with someone about their finances and find they have an emergency fund of many thousands of dollars yet have unpaid credit card bills. This makes zero sense and can be costing you a ton of money. Never keep money in savings if you have high interest credit card debt. Pay the debt off, stop using the card, then rebuild your savings quickly.
3. Insurance you don’t need: Please don’t interpret this one as an endorsement to dump your life insurance policy because you don’t think you will die in the near future. Insurance as a whole is a key element of a sound financial plan. Unfortunately, some insurance agents like to sell you things you don’t need to increase their commissions. Life insurance on children, collision coverage on old cars, or damage insurance on your cell phone are things most people simply do not need.
4. Lottery tickets: This one is a no brainer. There’s a reason successful people don’t go near them, and those who are struggling financially buy them in mass. They are a total waste of your hard-earned money. Yet, according to yahoo finance Americans spent 17 billion in 2023 alone on them.
5. Dine-out beverages: Ask any restauranteur about where they make their money and they will tell you it’s on the drinks. Whether it’s premium coffee in the morning or cocktails in the evening, choosing water instead is great way to reduce your overall dining expenses and is healthier too.
6. Sales and deals: I know last week was Amazon Prime Day. I know the item you bought was 25% off its normal price. But if you didn’t need it enough to buy it before, you probably won’t use it now that you got it on sale. This one in particular is a challenge for me. As an avid bargain hunter, I will often buy things simply because they are discounted. This kind of “I’d be a fool not to buy it at this price” thinking has caused me to waste a ton of money over the years.
7. Impressing others. A desire to keep up with the Joneses has been something that marketers have used for decades to convince people to buy things they don’t need. However, in today’s world of social media, the temptation to buy things to impress others is even greater. More often than not however, the things purchased for these reasons are usually a waste.
You may look at this list and say that most of these things don’t cost much and are not the difference between financial success and failure. For the most part I’ll admit that point is true. However, these little things do add up. Even more important is the mindset that comes from eliminating waste from your spending. Intentionality and discipline are the keys to personal finance. The more you focus on being a good steward of your money, the more success you will have.